One of the most complex business and marketing concepts is strategic management or theory. Even when I was presenting my 10-year strategic plans to graduate from business school, there were still MBA students who could not properly navigate strategic theory and apply it. The concept is hard enough to understand when you’ve actually studied the subject matter. Now, imagine being a business or marketing individual without any formal strategic training. This is often where the confusion between strategic theory, goals, and tactics tend to meld and are misinterpreted or misused.
So, what is strategic theory? Conceptually, strategic theory purports that there are a finite number of overall theories that can be applied in the business environment, and that they’re linked together as you progress through the strategic planning process.
But before a business professional or team can make their theory choice, there is an enormous amount of research and environmental evaluation that needs to take place to ensure that the theory aligns with the business from top to bottom. If done properly, this process could take one individual nearly a year to complete a 10-year plan—unless, of course, your job is 100% dedicated to corporate strategic planning.
I liken the concept to that of a fish; specifically, the old saying that the fish rots from the head. In other words, strategic alignment has to start at the head of the fish (the company’s highest ranking officials) and has to flow down to the tail (the overall workforce). This structure is similar to an organizational chart, but also makes accommodation for all stakeholders that interact with the corporate structure.
Strategy is the direction in which a company wants to move based on their chosen mission and objectives, taking into account maximization of competitive advantage and minimizing or diminishing competitive disadvantage. In other words, what do we want to be, what direction do we want to head, and how do we get it done?
Finally, there are goals. Goals are the ways you measure effectiveness against strategy, and tactics are the actual activities you are going to execute to stay on strategy. As you start completing your goals, you continue down the list of priorities needed to stay on strategy.
Walmart, for example, chooses the low-cost leader strategy, while a company like Cuisinart focuses on a differentiation strategy. Walmart’s goals and tactics must always align towards being the lowest-cost provider, squeezing cost out of every possible crevice of the business to be the most competitive and, in turn, find ways to diminish competitive disadvantage against the likes of Amazon and Target. Cuisinart, on the other hand, must find ways to continually distinguish itself against competitors with ongoing innovation and unique offerings.
Put simply, all alignment must occur against the strategic direction of differentiation and all goals and tactics should follow the direction of the fish’s head—always swimming towards innovation and uniqueness in all areas of business, not just product offerings.
The conundrum comes when the head of the fish doesn’t do the talking or when there’s no written strategy plan for the organization. And I would guess that most companies don’t have a strategic planning committee or use any formal written process to execute strategy, which leaves most companies directionless.
If this is the case for you and you’re trying to function in this type of environment, you have to start by looking for the clues, even if they’re not written down in a formal document. Yes, this goes against everything I learned in business school, but sometimes you need to function in the environment you’re in and use what you know, even if it doesn’t jive with formal business theory. And sometimes you don’t have to look very far; corporate officers may say things like, “We want to provide unique products that other competitors don’t offer,” which is a prime example of differentiation strategy. Or perhaps they’ll say, “We want to be a niche player,” which falls in line with differentiation-focus strategy.
Now, if your company currently has a differentiation-focus strategy that doesn’t mean that it can’t evolve to broad differentiation one over time. But I would say that it could be very difficult to move from a low-cost leader to a niche player or differentiation-focus strategy over time because they’re on opposite sides of the spectrum; and one would be hard pressed to go from lowest price provider to niche player, which tends to have a higher-price offering in the market.
Overall, mission and objectives determine strategy. Strategy, in turn, drives goals and tactics. Think, “How will we measure our success, and what actions do we need to take to execute on our strategic direction?”
Successful companies align all efforts in the same direction to continue long-term growth. Where companies struggle the most is lack of strategic direction, which then leaves employees without formal direction, and efforts may be completely out of sync with what the company truly wants to accomplish.
If necessary, you can be your own fish by understanding the general strategic direction of the corporation, understanding your competitive advantages and disadvantages, and then determining the way in which you will set goals for yourself or your area of responsibility and what activities or tactics will you use to meet those needs.
Swim at your own risk!
About the author:
Mary Rodgers has more than 20 years of experience in the housewares and tabletop business. Since joining Cuisinart and Waring in 1996, she has significantly expanded the marketing communications department, while spearheading industry-first initiatives that have given the company even greater stature as an innovative leader. As Director of Marketing Communications for Cuisinart and Waring, Rodgers is responsible for all consumer communication touchpoints for the brand portfolio, as well as Cuisinart’s National Bridal Program.