Strategy is strange. It’s one of the most talked-about concepts in business – yet one of the least understood. Corporate titans tout “strategies” of infinite variety every day; never mind that most are not strategies at all. At best, many are simply sets of goals. At worst, they are recipes for disaster or perpetuated mediocrity.
The good news is this: Strategy is an area where small firms and startup entrepreneurs have an opportunity to out-think their big business cousins. And it starts by simply grasping what strategy really is – and is not.
While there’s no official “strategy playbook” or universally-accepted definition, my favorite description of strategy comes from Richard Rumelt, a professor at UCLA Anderson School of Management who is considered one of the world’s top authorities on business strategy. “Unlike a stand-alone decision or a goal,” says Rumelt, “a strategy is a coherent set of analyses, concepts, policies, arguments and actions that respond to a high-stakes challenge.”
High stakes indeed. It’s your business on the line, after all. But if you were to pick just one word to get at the essence of strategy, it would be “action.” Define all the vision, values, goals, customer pain points and revenue opportunities you want. Those are the “what” of the situation. A strategy is your “how,” and that requires action. Successful entrepreneurs understand this because they’ve not only seen a need, they’ve articulated a specific, rationale series of activities to satisfy that need and achieve their goals.
Still, the true nature of strategy remains murky in today’s business world. To help clarify, here are six secrets to avoiding common pitfalls and creating a successful strategy for your small business:
Secret #1: Goals are not strategy. This might sound simple, but some of the best and brightest in business fail to recognize this every day. You might, for example, have specific revenue goals for your business, or a desire to be “biggest” or “best” at whatever you do in your area. But how will you make that happen? You need to know the “pivot points” on which to focus your efforts.
Secret #2: Ya gotta do something different. If your “strategy” is exactly the same as everyone else’s, how do you expect to succeed? The actions that you choose to focus on as part of your strategy must – somehow – involve doing things differently than your competitors. That might involve doing different things; or the same things differently. To beat the competition, you need a sustainable difference.
Secret #3: Strategy also means choosing what not to do. Strategy is about making choices. In short, you can’t do it all, so you need to pick what’s important. Some business owners find it easier to start the strategy-development process by first deciding what types of activities their business will avoid, either because those activities just don’t fit with the vision and goals, or because others already use them.
Secret #4: Good strategies are rarely obvious. Don’t expect strategy to come easily. If it’s obvious, others have probably done it already. You may need to summon all of your creativity, insight and innovation in order to find the best strategic fit for your business. Your differences need not be radical. Even subtle, yet distinctive differences can magnify your actions and lead to success.
Secret #5: Your strategy is an ecosystem. A strategy isn’t one thing or one activity. It’s many activities – some day-to-day, some less frequent – customized to fit into and implement your strategy. And just as in nature’s ecosystems, each part plays an important role in preserving the system (your strategy) as a whole.
Secret #6: Strategy can be lost – and regained. Businesses both large and small lose track of their strategies all the time. It happens slowly, as successful companies lose focus and drift into incremental approaches that were never part of the core. That’s when your business needs to regroup and reexamine its strategy to see if it’s still the right one. You may simply want to renew the original, or find a new one. Either way, it’s all about action.
Bonus Secret: “Good Strategy/Bad Strategy” (Crown Business, 2011) by Richard Rumelt is a terrific read on this topic.
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About the Author: Daniel Kehrer, Founder and Chief Content Officer of BizBest Media, is a senior-level leader in digital media, content development and online marketing with special expertise in startups, SMB, social media and generating traffic, engagement and leads. He holds an MBA from UCLA/Anderson and is a passionate entrepreneur (started 4 businesses), syndicated columnist, blogger, thought leader and author of 7 business and financial books.