What Is Strategy And Why Is It Important?
“Don’t think you are going to win in business with a better product, more capital, or a bigger team… The winner in a market most often has the best strategy and executes it well.”
These wise words come from prominent venture capitalist and start-up commentator, Fred Wilson. Strategy is one of those business jargon words that is thrown around a lot. But that doesn’t make it irrelevant; it is actually key to all businesses no matter their size or experience.
What Is Strategy?
Explaining strategy is extremely difficult because it is primarily a concept. The best way to explain it is that you would have an overall vision to your business – you know what you want to do and why. But strategy is more than this, it also encompasses the plan to reach your final vision and considers things such as resource availability and marketplace competition. Only then can you develop an all-encompassing strategy that will take your business to where you want it to be.
Is It Important?
Yes. There isn’t a conclusive study that shows the importance of strategy to business. But most experts would agree that good strategic thinking coupled with good execution equals business success. There are three key reasons that demonstrate the importance of strategy to business.
Understanding Your Company and Industry
Strategy gives businesses a better chance to understand their organisation. This gives Managers and stakeholders a forum in which to address the weakness and identify shortcomings that are limiting progression to success. It also helps to retain a focus relevant and conducive to growth.
Growing in A Changing World
Understanding the changing world is a part of any strategic thinkers toolkit. This skill can ensure the business is geared towards long-term profit and growth. If you don’t adapt to a changing world your business will fail but all too often, there is a tendency to look at immediate concerns and trends rather than plotting a bigger picture. The rate of change is so fast nowadays that failure to be forward-thinking and adaptive within your strategy will categorically harm your business.
Creating Vision and Direction
All businesses need to understand their purpose, destination and route to their end-goal whether that is to create a certain culture, solve a certain problem, conquer a particular territory or achieve a certain sales target. Without this vision and direction being crystallised, your staff will not know what to focus on or where their priorities should be. If everyone is working towards a common purpose, then your business will be streamlined in the direction of success.
Are you interested in developing your businesses strategy? We offer online courses to help develop strategic leadership skills.