What is strategy?
Untangling the word, strategy — for small business owners
A strategy should be simple, and make decision-making and business-running easier. But the word strategy is confusing.
Many small business owners think they have a strategy (when they have a plan), or think they don’t need a strategy. But I actually think it’s how we’ve all been using the word (misusing / overusing) that’s become more confusing than the strategy itself. And it’s no wonder. I see people using the words “strategy” or “strategies” instead of “tactics” and “plans”. Strategy and plan get muddled all the time – even in big agencies, with big brands and experienced marketers. Which makes it even more confusing in small business land!
Seth Godin shares my frustration. He was asked about this topic in an interview:
Interviewer: “Say you ask the founder of a startup about their marketing strategy, and they say Instagram or Facebook. What do you say?”
Seth: “I start by pointing out that that is not a marketing strategy. That is a media tactic.”
And why does it matter whether something is a strategy or a tactic?
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”
— Sun Tzu
So in this month’s curious exploration, we’re untangling the idea of ‘strategy’ from that of a ‘plan’ (or in the words of Seth and Sun Tzu, a ‘tactic’) and diving in to just how important a good strategy is for small business.
So, what is a strategy?
There are loads of definitions of what a strategy is, and even more definitions once you start adding words in front of the word ‘strategy’ — business strategy, brand strategy, content strategy, social media strategy, product strategy. The list goes on.
Small businesses are always doing. Head down, bum up, trying to do all the things. A strategy is putting a framework around the doing, so you don’t fall for everything.
A good small business strategy, is a framework for making the ongoing, daily decisions about how you will play the game of business.
It consists of two clear parts:
Who you are (as a brand).
Where you are going.
Without this strategy or framework to guide everyday decisions, a business can run in too many different directions, find itself saying yes to every opportunity without thinking about whether these opportunities are going to help achieve their overarching goals, or stretch their valuable resources too thin. Ultimately, this can lead to confusion and discord, often culminating in burnout and/or overanalysis paralysis.
When thinking about strategy, I like this simple explanation: A strategy is zooming out and thinking about the big picture of what you’re setting out to do. A plan is zooming in and focusing on the specific steps you’ll need to take and the tactics you’ll use.
In the words of Seth Godin:
“Tactics are great. Execution is essential. But a smart strategy is like having the wind at your back. It makes everything easier.”
— Seth Godin
Think of it like a game of chess, suggests strategist and author Mark Pollard:
“Strategy is an informed opinion about how to win. It’s separate from tactics or activities or groups of activities that make the strategy happen. Without strategy, tactics are things that might look flashy in the short run and maybe if you’re against weak opposition, you’ll win. But without a strategy, the tactics might actually mean you lose.”
If you relate that to chess, tactics can help you win if you have a strategy like a 4-move checkmate. Otherwise you’re just using play-by-play moves or tactics, trying to outsmart your opposition with your fingers crossed behind your back.
A human approach to small business strategy
For small businesses, without the huge marketing and advertising budgets to broadcast our marketing messages to the anonymous masses (aka “spray and pray”), I believe we need a human approach to strategy. Whereas big corporates are laser focused on numbers and margins, often at the expense of the human experience, small businesses put humans at the centre: we’re focused on the needs of our staff, our needs as founders, and the needs of the humans we're serving – our customers.
There are so many different approaches to strategy, but after years of crazy, unwieldy strategy documents and strategy formulation processes that sometimes went for 18 months (yes, not even kidding) in the corporate world, I now keep it simple — much like this philosophy of Simon Sinek’s:
“When we have a clear sense of where we're going, we are flexible in how we get there.”
— Simon Sinek
As small businesses, we are more nimble and agile than the bigger players, and have passionate human founders at the helm.
Bringing a human approach to strategy means we understand that both plans and people can change. Our needs as founders, our staff’s needs, and our customers’ needs, can fluctuate in response to any number of big or small factors. But if we’ve got our overarching strategy in place, we can respond to those changes with flexibility and still have that clear sense of where we are headed.
So, while we can’t predict the future, we can make sure we have direction and clarity, while remaining nimble and open to what our people want. Here are a few of my key fundamentals for mapping a human-centred strategy:
Who are the humans you are for
What is the change you are trying to make for those humans
What is the simple offering of your business in one sentence
What is it about your business that is unique and valuable for your humans
Why do you do what you do
What are your short and long term goals (beyond the numbers)
What is the problem you are trying to solve based on what is getting in the way of you and your goals
What’s the overarching framework for solving the problem and achieving the goal, in a way that is aligned with your why
IT’S KEY TO GOING SLOW…
As so many of my small business clients can attest, having a clearly defined strategy in place has a very tangible impact in terms of your bottom line and (just as importantly) your enjoyment of your business.
Often, we can lose sight of our overarching goals, particularly in times of change and all the day-to-day tasks that small business founders find themselves buried under. One of my clients, the wonderful Susie McIntosh from Comma (a modern Australian massage experience based in Byron), came to me when her business was in a stage of transition and growth. Together, we developed an overarching strategy to guide her business through this period of change and ensure its sustainable growth, giving her the confidence to know which products to press go on, and which to press no on.
When reflecting on the value of nailing down her strategy, Susie states:
“We could move forward knowing what we stood for, what products and services best represented our brand, and how we were going to sell them. Sometimes I’d get too busy working in the business and forget to work on it, Katie inspired me to work back on it!”
Crucially, a strategy also allows the time and space to reflect on your business activities. As I’ve explored in earlier blogs, the act of pausing to reflect on whether something is really aligned with your strategy is not only crucial for your headspace, it has a very real impact on financial performance too.
Remember that study by the Harvard Business Review? It found that companies that push ‘go’ on every opportunity ended up with lower sales and operating profits than those that paused at key moments to reflect. The firms that “slowed down to speed up” averaged 40% higher sales and 52% higher operating profits over the study period.
My guess? Those businesses that chose to assess each opportunity were operating under the scaffold of a clear strategy and, as such, knew what to say yes or no to. After all, the enduring value of a good strategy is that it gives you the confidence to really own those decisions and allows you to grow sustainably, with clarity, while putting the human experience firmly at the centre.
Katie
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Special thanks to Mark Pollard (strategist, author of Strategy Is Your Words) and Steve Tighe (business strategist, scenario planner, author of Rethinking Strategy) for your input in helping me untangle the word, strategy.