Why is strategy confusing for some people?

A lot of ideas and concepts come to mind when we talk about strategy. One of them is strategic planning or what most people consider as a long-term plan. We cannot say that is true nor we can say it is wrong. But a strategy is not just a long-term plan.

The root of the word strategy comes from “stratēgia”, a Greek word that has been known and used in military and wars. Understanding the origin of the word will help us realize what strategy is. Not only the word “strategy” has been taken from military to be used in business, “The Art of War” book by Sun Tzu has been used in businesses too. The book was written for military purposes, but it seems that wars are extreme situations of aggressive competition where people fight to resolve conflicts. Actually this is what happens in businesses to some extent.

A plan. That is what comes to mind when we talk about strategy. However, not any plan is a strategy. When we talk about strategy in military actions, it means how to win or at least not to lose. This is what it means in business too; how to win over competitors and overcome challenges. What activities should you do to win?. Therefore, if you have a long-term plan that does not specify how you are going to win, then that is not a strategy, neither a strategic plan. It is just a long-term plan.

Long-term plans are not effective if not including a strategy. That is not easy ! It is not easy at all to have a winning strategy. What do companies do when they face a challenge to come up with a winning strategy? They create a long-term plan and call it a strategic plan, thinking they have done the job.

Even when we think about examples of successful winning strategies, we find it difficult to find excellent examples. There are few companies which best explain how to create a strategy: one of them is Southwest Airlines. It is a company that differentiates itself to provide low-cost more frequent flights that other airlines cannot provide. They are winning against the competitors over certain customers. That is why you see the name of Southwest Airlines in almost every strategy book.

Getting back to war, which is an extreme case for competition, we can see there is a need for a strategy. A crucial need to have a strategy. Otherwise, an army will be defeated badly. Creating a strategy needs an understanding of the strengths, weaknesses, landscape, weather, battle field, and the opponents. In business, you analyze internal and external factors, the playing field (the market), the competitors, the customers, and the economy, then you create a strategy.

Competition is the main driver for having a strategy. If there is no competition, then a company may neglect having a strategy and only serve its customers. This explains why companies use the word strategy in business. That is why “The Art of War” book is so valuable in the business world; to win a competition.

The takeaway point is: Strategy is a way of winning in competition. It is not just what you will do in the next five to ten years.

So, how to come up with a strategy? this is another topic for another article.

by Muath Bin Hussain