Getting ahead in business means thinking strategically. Easy to say but not so easy to do given that many people really don’t know the difference between strategy and tactics. So here goes, an attempt to explain the difference.
When you look in a dictionary (I checked online) it would say something like “A plan of action or policy designed to achieve a major or overall aim.” Not very clear is it? Anything can be called a strategy under that definition. That’s why there are marketing strategies, financial strategies, HR strategies and so on. All of them are designed to achieve an overall aim. If you define your overall aim as earning a profit then you could have a cost reduction strategy too. But are those actually strategies? Nope, to me they’re tactics.
Remember that getting ahead is about thinking strategically so you have to know what to be thinking about at a senior level and what not to be thinking about.
Strategy relates to how you meet customer needs.
Going back to basics, a business is about finding and meeting a set of customer needs. If you want to be more profitable or more successful than you are now then you’ll have to be better meeting those needs than any of your competitors. So strategy first off relates directly as to how you meet customer needs better than your competitors.
When you talk about customer needs, there are only three dimensions within which you can have a conversation. Customers needs can be summarized in three big buckets. They are looking for a certain quality level, at a certain cost and with a certain speed of service. How your product or service fits in those three dimensions of Quality, Cost and Speed is how you’ll be perceived by customers and thus how you’ll stack up against competition.
Customer needs can be defined by Quality, Cost, and Speed
You can compare any two businesses by looking at those three dimensions. Look at MacDonalds versus The Keg for instance. They both serve beef and fries don’t they? But MacDonalds has lower quality, lower cost and faster service. They are strategically differentiated. The Keg’s strategy is to earn more money by selling higher quality at a higher cost with slower service. What matters most to both of these restaurants is how you perceive these three dimensions of their offerings.
To change or improve or fix your business, what you have to do is change, improve or fix one of those three elements of Quality, Cost, and Speed. It all comes back to that.
Thinking Strategically means thinking about and spending time and money on issues that directly relate to Quality Cost and Speed. Furthermore, it means thinking about things that have a big effect on these three items.