Strategy

by Doreen Yarnold

What is strategy?

Definition

Strategy is the direction and scope of an organisation over the long term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations.

Strategy should be a catalyst for change within organisations. Strategic analysis is the platform for creating the broad categories of action required to get a team, department or organisation from where it is today to where it wants to be at some point in the future, in pursuit of its vision. It provides direction and common purpose.

Strategy and strategic analysis are applicable to all sorts of organisations. It is a way of thinking about how to bridge the gap between the present and the future. Strategy is about the key choices and manoeuvres that an organisation (or department, team or individual) intends to take in pursuit of its vision, goals and objectives.

Strategy is not planning! Planning is an important part of the strategic process, but it is not strategy. Planning is a distinct and separate activity that should only be undertaken once strategy has been decided. In other words, this is where we are today, and this is where we aspire to be tomorrow. So our strategy for getting there might be a new facility, a new xyz product, an innovative marketing approach of abc and an investment in pqr specialism for the first year of operation. Only once all this is decided can the planning and budgeting activities that underpin this strategy begin.

Example

I’ve been asked to write an outline project plan for how my department will handle the move to new premises we will be occupying in six months’ time. Am I being asked for a strategy?

No, although the key principles are the same. The key difference is that the move to new premises of the whole business is what requires a strategy, which will be driven by whoever owns that particular project. What you are being asked to do is to formulate your department’s part – its implementation plan – within the overall strategy.

A common misconception is that strategy is only for directors and senior managers. Nothing could be further from the truth. Strategy is the remit of all managers. If the overall vision and objectives are cascaded throughout the organisation, then everything that happens at grass roots level should support it.

Strategy and change

Strategic approaches are not just reserved for big events or changes. Any change cannot happen effectively if strategies are not in place to deliver it. If you’re changing the pay structure of, for example, just one team, you’d require a mini-strategy: you’d make some key decisions about what the overall pay structure would be and then put a brief plan together that covered all the key elements.

Big change, however, such as changing the pay structure of the whole business, would require a more comprehensive strategy, because it’s big enough to go badly wrong if not well thought through, planned and executed. It will also have more component parts, considerations and dependencies. When a big change event is being considered, there are many variables that require ‘bigger picture’ thinking to pull all the threads together – a strategy. Change, if handled badly, can have devastating consequences for any organisation; if it is a big change and no strategy has been formulated to see it through, it is liable to fail (see the topic on Change for more detail).