"Flow of actions which aim to achieve set goals"

The word strategy is derived from the Greek word "stratēgia", which means "art of troop leader; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. Experience of great military strategists. like Sun Tzu is still widely used and quoted by business leaders.

According to the logic of the "war of business" soon all companies would be divided into two categories: quick or dead. So modern managers should master the basics of strategic thinking.

There are many definitions of strategy, which can be divided into two groups: traditional and modern. Traditional approach focuses on developing long-term goals and objectives, connecting it existing resources. The modern approach to strategy can be defined as a "flow of actions which aim to achieve set goals"

Modern management doesn't consider the strategy in terms of just competitive advantage, it is more like ways to achieve success in the future.

The future is formed by billions of connected and inter-connected events and actions, so managers, who try to predict future to develop strategy, project their own thoughts and assumptions into it. They also have to find the balance between hard data - research and statistics and "soft" insights form business acumen, psychology and sociology.

Self-assessment: "What are we?"

Experienced business strategists follow Sun Tzu who compared military tactics with water: "Military tactics are like unto water; for water in its natural course runs away from high places and hastens downwards." Nowadays the companies that can avoid competing too hard win.

Modern strategists should master the following set of tools:

  • risk management and statistical research,
  • internal control and knowledge management systems,
  • just-in-time and kaizen,
  • managing supply chains and managing change,
  • Six Sigma and Lean Production,
  • quality management and financial management.

All this should be aligned and be part of the strategy.

Strategy came into the business world from the military, so modern companies use strategy to increase shareholder value. Financial, material and other resources should result in increased market share, and also in fanatical clients and engaged employees.

Napoleon knew every out of 10000 Old Guard soldiers. May be that's the main reason of their loyalty.

The process of developing strategy is simple and complicated at the same time. It starts with self-assessment:"What are we?" The objective of this exercise is to identify mission, key values, strategic perspectives and financial expectations.

  • What are "our" clients? And what clients are not "ours"?
  • What factors make them the clients we want to work with?
  • What factors can have impact on our clients?
  • What are sources of information about our clients?
  • How to organise database to work with potential clients?
  • How to find contact information on potential clients?

Reconnaissance: "Where are we?"

In this stage the company identifies its strengths and weaknesses and risks. It tries to answer the following questions:

  • Why clients can be interested to buy our products/services?
  • What opportunities we have?
  • What is unique in our offer?
  • Who can be our champion inside the company?
  • What are our strengths/weaknesses?
  • What skills our employees need to have?
  • What resources do we need?
  • Who are our competitors? How do they work? Why are we different?
  • What are our risks?

Direction of attack

After answering all questions above, the managers set the main direction of attack. In this stage, we answer the question: "What do we want to achieve?" The main focus are improvements in internal processes.

People first

In the last stage it is important to ensure the improvement would be continuous. To do so, the company should recruit and retain the best people. Questions to answer:

  • What are our values?
  • Are we honest in our communications?
  • Are we effective as leaders and managers?
  • How motivated and competent are our employees?
  • Are we ready to develop knowledge and skills of our employees?
  • Did we set the right priorities?
  • Do we systematically control and track acheivements?
  • Do the best get rewarded?
  • Are we working on ourselves?

Quick or dead

According to Sun Tzu, one should "appear weak when you are strong, and strong when you are weak.” What was true about opponents in military conflicts, is true about competitors in business - they shouldn't be underestimated.

Developing strategy is one of the few activities that can't be delegated. It's a duty and privilege of business' owners and top-managers.

Business as a human activity is less than 100 years old. On the other hand, the humanity had wars for thousands of years, so managers and business owners can use the experience gained in all victories and defeats.