Leadership Lesson: Flustered? Learn the many uses of strategy

Published in the Phoenix Business Journal on December 21, 2018

Ahead. We tend to think of strategy in forward planning. That is a perfect place for it. But not the only place. What about using strategic thinking to clean up an unforeseen mess? And, can strategic decision making play a day-to-day role in operating a successful business, sustainably? Yes, yes, and yes.

So, what is strategy? It is often described as optimizing the use of limited resources to win in challenging, uncertain and competitive environments. It evolved out of military usage as early as year 600. But strategy entered the business environment long ago – particularly in the development of annual strategic plans. A limited usage.

“Strategy is about making choices, trade-offs; it's about deliberately choosing to be different.” – Michael Porter, educator, author, strategy expert 

The strategic business plan

The foremost use of strategy. Building a winning strategy for the future of the business. Incorporating and supporting the organization’s vision and purpose, embracing the values and culture, enabling the mission and goals. That is one role of strategy in practical use.

Creating a forward path that oils the opportunity to meet objectives. Enabling the actions (aka, tactics) that will exceed goals – program and project goals. It can work for both startup and existing businesses. Pouring the financial footing for the short-term and long term.

Example: In the 1970’s Toyota began its aggressive lower-cost, higher-quality, successful strategy of marketing in the U.S. Toyota upped their strategy to overcome U.S. tariffs by building their products in the U.S. 

The strategic mop

“We clean up our messes.” One of the values of an early PC networking company. What does this have to do with strategy? 

Rather than a reactive cleanup, why not think it through, first? What would be the best strategy to overcome a failing business? What possible actions could work best – faster and easier? Strategic thinking can wipe up the mess.

Example: Airbnb (online bed and breakfast booking) changed how we travel in a significant way. But their initial effort failed. They had plenty of listings but few bookings. After they posted high-quality photos of the listings, business boomed.

Decide strategically

All decisions can incorporate strategic thinking – a good opportunity to utilize teams for alternate views and inputs.

What needs to be decided and why? How important it is? What are the facts with specific data? What are the options? How would a given decision effect the organization – vision, purpose, values, mission, business strategy and more?

Example: Twitter made an early strategic decision to not Tweet alone. They partnered with Odeon, who made their own strategic decision to abandon podcasting, and go into text messaging. One plus one equaled billions.

Grand strategy, sub-strategies

A recent revelation is the idea of a grand strategy (the “bold stroke”) for the organization, with sub-strategies by function to support the grand pathway. 

Example: Amazon’s grand strategy was build a massive, sophisticated, logistics system to support selling everything possible easily, efficiently via online retailing. But the first sub-strategy was to start selling something familiar, believable, acceptable, inexpensive, trustable. Books.Yet the logistics system was already geared to sell everything. Brilliant.

The bottom lines

Strategy. Not just for a business plan, which is a “home base” strategy. But for ways of thinking, ways of handling crises, ways of making decisions. Learn more about strategy as a centerpiece of the entire business operation (nonprofits, too). A to Z.

Click here to read this article on the Phoenix Business Journal site.