Understanding Strategy

Before you start – Understanding strategy Strategy is a word that frightens most new business owners. Assuming you do not understand the meaning of the word or are not quite sure, you would then check the meaning. Here is one definition below: -Strategy refers to a set of long-term plans and actions designed to achieve specific goals or objectives. It involves analysing the current situation, identifying challenges and opportunities, and making decisions about how resources will be allocated to maximize the chances of success. A strategy outlines the direction in which an organisation intends to move and how it plans to navigate its competitive environment to achieve its desired outcomes.

To summarise strategy - Goal Setting, Analysis, Decision Making, Execution, Monitoring and Adaptation.

At this point most people shrug their shoulders and decide to just do it. Believing that they understand what they want to do and how to do it, they ignore this definition due to a general lack of understanding or fear of the unknown. This is most often the beginning of the end. If you have not set a longer-term direction to follow, when will you turn left, turn right, do a u-turn, stop or pull off. When will you slow down and when will you accelerate.

I have seen many potentially great businesses collapse simply because they have no plan, no clear direction. Strategy helps the owner to define the direction they wish to make the business go in. If the business grows and employs staff, how do the staff know where the business is going. How can your staff do the correct thing? They follow the strategy.

If there are multiple shareholders, how do you gain consensus. How do the shareholders get focused on the same goals and targets. We are all different. We all read text, the same words, but we do not necessarily interpret the words in the same way. We are individuals but verbal communication is a lot more complex to ensure alignment than written text.

Strategy is simple and provides a road map for the relevant people to understand where they are going and how they intend to get these. In the past we used maps, and today we use Google Maps to get to our intended destination. The map for business is the strategy.

This is covered in more depth on a later course.