"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."
While many people talk about "strategy" or "strategic" things, most would not be able to come up with a definition. Simply put, strategy is a plan of action designed to achieve a vision.
Out there, there is a "world that is", and based on that, a "world that will be" left to its own devices. Vision defines the "world that should be." Strategy is the set of methods and resources used to bring the world from where it "will be" to where it "should be."
1. Vision Definition: The vision of a business outlines how it wants the world in which it operates to be and what its role in that world is. Visions of the world vary by organization. While the vision of a credit card issuer can be a cashless world, an automotive company's could be a world where everyone drives a car, yet a charity may envision a world without poverty.
There are five steps to developing a business strategy:
2. Business Decisions and Goals: When the vision is well defined and agreed upon, the question is: "How can we compete successfully in the market to achieve our vision?" A business manager's task is to break this question down into relevant parts, set goals and provide answers. What should our product or service offering be? Who are our customers? How do we meet their needs? Who are our competitors? How do we gain advantage over them? What are new opportunities available to us? How do we go about exploiting them?
3. Operations Planning: Once business decisions are made and goals are established, the business manager's concern becomes: "How should each part of our business be organized to deliver these business goals?" Now, the operations required to deliver our goals must be planned. What is our ideal organizational structure? What are the key processes of our business? What resources are needed? What kind of skills are required from personnel? How should we train them? How should we deploy them? What should our overall business infrastructure look like?
4. Implementation: After operations level questions are answered and action plans are prepared, it is time to walk the walk. Implementation is almost never smooth. Unexpected factors always change answers to questions previously solved. We will find in many areas that theory and practice do not match, that either our data, or our assumptions or our logic was flawed. Sometimes a quick fix is enough, other times it is back to the drawing board.
5. Continuous Improvement: Even when everything was planned and implemented perfectly, over time, change becomes necessary. Advances in technology, fluctuations in market dynamics, transformations in the way business is done, all require the business manager to continuously update solutions, generate innovative methods and improve business strategy.