The word “strategy” has come to mean anything in an organization that is important. But great strategies drive real purpose and decision-making. Define one that is meaningful, and you can guide real-time choice-making across your organization.
Strategy, unfortunately, has come to mean just about anything that those in an organization deem to be important. Thus, we have strategic human resources, strategic finance and Lordy, even strategic procurement! When things aren’t predictable, solid strategies are essential — they help provide guidelines and act as guardrails. When well crafted, they get you past the frozen-in-the-headlights reaction many have to uncertainty.
From the military to the corner office
Strategy started as a concept in military thinking. As Patrick Marren, writing in The Journal of Business Strategy observes: “The word “strategy” comes from the Greek “strategeia”, which means “generalship”. The Greek word for “general” is “strategos”, which in turn comes from “stratos”, “army”, and the verb “ago”, which means “to lead”.” Literally translated, the term means ‘army-leading.’
The business equivalent of the general is often equated to be the CEO, or other general manager with decision-making rights. One of the most misunderstood ideas in strategy, as my colleague Roger L. Martin notes is that decisions are made at the ‘strategy’ level and everybody else just executes. I would argue that the purpose of a good strategy is to allow smooth decision making throughout the organization, but particularly at the ‘edges’ where real information about what’s going on lives.
Here are a handful of definitions. Harvard’s Michael Porter emphasizes distinctiveness, noting that “Strategy is the creation of a unique and valuable position, involving a different set of activities.” The original McKinsey consulting formulation of the idea defined it as “an integrated set of actions designed to create a sustainable advantage over competitors”. Roger Martin offers the idea that strategy is “a set of interrelated and powerful choices that positions the organization to win”. A well-regarded textbook argues that “A company’s strategy is the coordinated set of actions that its managers take in order to outperform the…