2.8 What is a strategy?
There are many definitions of strategy:
- Chandler (1962) ‘The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for those goals.’
- Andrews (1971) ‘Every business organisation, every sub-unit of an organisation and even every individual (ought to) have a clearly defined set of purposes or goals that keep it moving in a deliberately chosen direction and prevent it drifting in an undesired direction.’
- Porter (1985) ‘A process of analysis that is designed to achieve the competitive advantage of one organisation over another in the long term.’
- Henderson (1984) ‘To enable an organisation to identify, build and deploy resources most effectively towards the attainment of its objectives.’
Whichever definition strikes a chord with you, they all emphasise that strategy is about the long term:
- clear vision through goals
- understanding your external environment to ensure the goals are realistic
- appropriate allocation of resources to the tasks that will most likely help the company achieve its strategy implementation.
As the owner of a small business, it is inevitable that you will get involved in all aspects of the business, particularly at start up.
It is important to distinguish between operational and strategic thinking. Operational thinking relates to those tasks or activities that characterise the day-to-day working of the company. This could be anything from making practical, stylish staircases (David), producing some delicious and unique sandwich relish (Gwyneth), drafting a marketing email (Dafydd), designing a language course (Gwenllian), or monitoring the purity of the water obtained from the farm well (Euan). The more efficiently these are completed the better it is, as the costs will be kept to a minimum and output of the company will be enhanced.
Strategic thinking looks at the business more holistically. It connects all the activities and considers how they relate to each other in achieving the overall objectives of the company. Strategic thinking questions how the tasks can be aligned, combined or performed differently to deliver something better. For a not-for-profit organisation ‘the fit’ between these aspects also needs to account for the ethos or wider goals of the organisation. Find more information about.
Many small business owners are guilty of ‘working in the business not working on it’. It is easy to become so engrossed with meeting operational day-to-day requirements that there is no time left for any strategic, longer term thinking.