Tuesday, June 19, 2007

Strategic Planning - Strategy as Direction

The word “strategic” is often mis-used, mostly because it implies both importance and intelligent analysis. There is a great deal more to strategy than these two connotations. Strategy is about the overall course and direction of an enterprise. In military use, strategic targets are not just important targets, they are targets that affect the enemy’s ability to wage war. In strategic planning for business, strategic objectives always drive at one of three questions:

1. What do we do?
2. For whom do we do it?
3. How do we beat our competition?

For example, introducing a major new product line is usually strategic because it changes (1) and possibly (3), while requiring an excellent understanding of (2). Improving employee benefits, while almost always important, is only strategic if it is closely tied with (3). (I could write an entire book on why treating employees well is almost always part of competitiveness in the best companies, but that is a topic for another time).

So, despite the fact that such things might be important, it’s really rare to encounter “strategic interviewing”, “strategic facility management” or “strategic communications”. Naturally, if you are in the facility business, perhaps operating apartment buildings, you do have “strategic facility management”. For a typical widget manufacturer, however, this idea is just an attempt to puff up the importance of a crucial, but non-strategic issue.

“But”, some of you are surely saying, “won’t facility management cause us to lose customers if we do it poorly?”. Absolutely. And - at that point - the issue does become strategic. A good analogy is to think of your business as a ship. Anything that helps get you from where you are to where you want to go can be strategic. A tiny leak in the hull that won’t get any worse won’t affect your ability to get where you are going - but a huge hole that threatens to sink the ship will. One is not strategic, the other is. On most ships - and in most companies - your strategic level management and resources should be not be focused on the little holes, but rather steering to avoid the rocks so that you get where you want to go without getting a big hole in your ship.

The next time someone says “strategic this” or “strategic that”, ask yourself - is this person really talking about something that affects the course of my company? It may help you focus on the things that will truly get you where you want to go.