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So What the Hell is Strategy, Anyway?

For a word that has been thrown around so much in business, it’s surprising there’s still massive confusion about what it means.

Strategy.

Let’s explore.

Misconceptions

Some say strategy refers to the long-term – three-to-five years is a standard benchmark. But if your bankers are pointing at the noose, your strategy might well be how to survive the next 90 days. Clearly, strategy isn’t limited to just the long-term.

Others think of strategy as the big picture – positioning your business in light of major trends (such as industry or social trends). Yet big picture trends may be of marginal importance if your limiting factor is simply product reliability. Focusing on the small picture may be what’s required to compete and win.

Still others claim that strategy has to encompass the entire business. And each department and individual must be aligned with the company strategy. But if your make-or-break issue is securing the right distribution channels, then your strategy, rightly, should focus on distribution.

So if strategy isn’t necessarily long-term, big picture, or encompassing of the entire business, then what exactly is it?

Compounding the Confusion

Sadly, Roger Martin, noted thinker and former dean of the Rotman School of Management, adds to the confusion in an HBR article, Stop Distinguishing Between Execution and Strategy.

Martin starts off with the assertion, “It’s impossible to have a good strategy poorly executed.” Really? It can’t be a good strategy unless it’s well executed? But that’s not exactly what Martin means. His explanation, “That’s because execution actually is strategy.” (emphasis mine)

Well, this might come as a surprise to the many leaders who’ve told me of strategies that failed at first but were later successful. Why? Because the lessons learned from failures prompted changes in how they planned or managed execution. Did a poor strategy suddenly become a good strategy? No, the strategy was the same. It was the execution that changed.

Martin asks, “How ‘brilliant’ can your strategy really be if it wasn’t implementable?” Not very, is of course the answer. Yet his question misses the point. I rarely come across strategies that weren’t implementable. But I often come across strategies that weren’t implemented. Again, failures of execution.

Let’s Get Clear on Terminology

It’s important to keep in mind the difference between a strategic plan, an execution plan, and the process of managing execution. The strategic plan reflects broad decisions about what must be achieved and how, rooted in a compelling why. The execution plan translates that into time-linked milestones, resource requirements, detailed actions, and accountabilities. It addresses both the technical side and the cultural side of execution. Managing execution is the process by which the execution plan is tracked, evaluated and recalibrated as needed.

So, again, what exactly is strategy?

Strategy is your critical what – your overarching ambition – and the broad strokes of how. With good strategy, that ambition is grounded in a well-conceived why to ensure it is relevant, desirable and timely. It can be long-term, short-term, big picture, small picture, broad, narrow, and, yes, it is distinct from, and no less important than, execution.

That’s what strategy is.

Make it happen.

Michael

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