A strategy is concerned with long-term goals. It sets out the principles and policies that need to be understood and observed in order to achieve them. As a result, a strategy tends not to be specific or prescriptive about the steps and actions that are taken but provides the guidance and means by which decisions are made, and changes are effected, to ensure attainment of the long-term goals. A strategy must be able to influence decision making at all levels in the business.
A business team must be able to refer to the strategy and understand how changes that they are making and how their day to day actions will affect the long-term goals of the business. This helps them differentiate between decision domains within which they have a freehand to develop solutions to problems and to change the way tasks are carried out, and those domains within which actions and changes must carefully adhere to strategic principles and policies. The latter may be guided through training and reference materials which are used during decision making, or by referral to a community of practice which specialises in governing strategic compliance when making decisions and planning change.
Equally, the senior management team must be able to prioritise investment decisions according to the strategic goals that have been set by business owners, often over 10 or 15 year horizons, ensuring that different parts of the business are working together rather than frustrating each other’s efforts with conflicted agenda.
Specifically: a strategy is a framework of principles and policies that determine how and what decisions and changes need to be made in order to ensure that long-term goals can be achieved.
- How - because some strategic decisions need to be referred to specialists and some can be made by any team member since the strategy is understood and the relevance of the decision or change is clear.
- What - because some decisions and changes are a priority or have more affect on the achievement of long-term goals.
It should be clear from this definition that a strategy is well worn from use by every part of the organisation on a daily basis. It is an asset and a tool, constantly applied and in need of honing and sharpening. It is used by everyone but maintained by specialists.
This is not to say that every decision and change will be in line with strategy, after all a business will need to be pragmatic on occasion. However, the affect of non-strategic decisions and changes will be weighed with respect to their benefits in the short term against their affect on the achievement of the long-term goals.
A good, pragmatic implementation and use of strategy is the setting of broad long-term objectives while allowing teams within the organisation to make their own decisions about how they contribute to obtaining these. This autonomy promotes strength through the combination of flexibility (in the application) and rigidity (in the setting of rules and restraining boundaries).