Why do you need a strategy?

8 May 2006

Lao-tzu said: “A journey of a thousand miles begins with a single step.”

But if after all those steps you end up somewhere you don’t want to be… what then? Pooh and Piglet once spent hours chasing after heffalumps, only to find that they were going around in circles and following their own footsteps. Even large multinational corporations, governments and aid organisations get so caught up in the daily management of their business that they lose sight of what they are doing and why. More often than not, the main reason for continuing to spend money on a project is because it wasn’t thought out clearly in the beginning and so it evolves into a beast that needs continuous maintenance and refinement.

One of the first things I ask in a strategy workshop is “What business are you (really really) in?” Then I ask “Why?”

It only takes a little step back and some reflection to make a significant impact on your business. It might not be necessary to spend thousands (or even millions) on that new marketing campaign. Perhaps you don’t need to hire qualified people; hiring on some other basis might be more beneficial to the company. Is market share really that important? Or perhaps short-term profitability is less of a priority than developing a large customer base that can be tapped into five years down the line.

Bill Birnbaum, a strategy consultant, describes a relatively simple approach to help clearly define your corporate strategy.

Ask yourselves:

  • Where are we today?
  • Where do we want to be, and by when?
  • How do we get there?
  • Getting to where you want to be takes 90% or more of your time, money and effort. Surely, if you are going to walk a thousand miles, you should allow yourself a little time to decide on your destination and to fix on a guiding star? It’s so easy to get distracted – and there is nothing wrong with that, so long as you reflect a little on whether you choose a different destination based on new information or simply a change of heart.

    The planning and actual implementation part of having a strategy tends to make a lot more sense if you understand what you are trying to achieve. It also does wonders for corporate communication and team building. Many companies might say, “We are in business to satisfy our customers and make a profit.”

    Hardly an inspiring mission statement.

    But what if your company was dedicated – in a profitable way – to ensuring that every person on the planet owns a mobile phone and can cheaply communicate with any other person?

    Bill Gates had a preposterous vision more than 20 years ago, do you remember? “To ensure that every household has a computer.”

    Your mission and strategy don’t have to be quite so grandiose, but that will probably only mean that your profits won’t quite reach the same proportion as those of Microsoft.

    Start thinking strategically and your company is far more likely to achieve clarity and success and maintain that elusive competitive advantage.

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    2 Responses to “Why do you need a strategy?”

    1. Callum Says:

      There seems to be some confusion about ‘Vision’, ‘Mission’ & ‘Strategy’
      E.g. Every household having a computer is a ‘vision’ but it is not a mission or a strategy.
      Additionally very few people start with a solid vision and go from there. That would be nice but the reality is that most visions, including Microsofts early one, evolves over time based on people in the company, external events etc. I’m sure Apple didn’t have the vision of millions of white ear plugs when they first started making computers.
      How do you make a vision focused enough to be motivating while flexible enough to change in light of new information?

    2. Valerie Says:

      It seems to me that the means “evolve in light of new information”, not the vision.
      While precisely crafted in one sentence, a vision would be broad enough in intention to be “timeless”, while the means to enact it (whether short-term goals, strategies or else — i.e. computers or i-pods) are multiple & flexible according to contextual change.
      After all, 20 years later Microsoft’s early vision is not outdated and yet to be fulfilled in many markets ; has been the backbone for the development of many related products (the “basic” to which one turns to when one needs to regain focus) and has even been declined into “a Microsoft product for every multinational/SME/small store..” 😉
      Now whether it is a vision or a mission… I am clueless!


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