"Nobody really knows what strategy is" — The Economist

Key takeaway: You'll find many different definitions of strategy. For executives, this is irrelevant. Instead, focus on what role strategy plays in your organization. At its core, strategy is about understanding what will drive your success. It should answer what your organization needs to be great at. Strategy will tell you where to direct your resources. And it will help teams stay focused on the few things that matter most. As a result, you will also become great at these things. That's how strategy will help you realize your ambitions.

“Nobody really knows what strategy is.” — The Economist

It's a provocative quote, and — judging from the many conflicting books and posts about strategy — it may actually be true. I've defined strategy myself in our Ultimate guide to Strategy, but others may disagree.

But we don’t need a definitive answer. At Perdoo, we believe the key isn’t in nailing down the one and only “correct” definition of strategy, but rather understanding what your strategy needs to achieve for your organization.

Let’s take a closer look at what strategy should do for your business and why some of the simplest questions may be the most important to answer.

The essence of strategy: knowing what to be great at

Whether your organization is just starting out or striving to reach the next level, it’s easy to get bogged down in all the things you could do. But strategy is all about honing in on what truly matters. To succeed in your market, you need to identify the handful of things your organization must excel at.

As such, your strategy will guide your decision-making and help teams to decide what to work on and what not.

What you need to be great at to succeed doesn't always have to deliver a competitive advantage, like being the cheapest providers (one of Porter's generic strategies).

Strategy can also address key challenges that your organization will face when realizing its ambitions. For example, if you’re operating in a tight labor market, one Strategic Pillar could be to be/become a great place to work. When executed well, such a strategy will help you hire and retain the talent that you need to succeed.

At Perdoo, we realized early on that in our industry (OKR and strategy execution software), it often takes more than just a software to make our customers successful. That's why we created a Strategic Pillar to "Offer the best resources, support, and coaching", which will help our customers get the most out of strategy execution and OKR. As we do this better than any of our competitors, it became a competitive advantage for us (and one that's hard to copy). But it also helped us tackle a key challenge toward our Ultimate goal to 'empower organizations to dominate their markets through a better execution of strategy'.

Why your strategy should guide decision-making

A well-crafted strategy is a practical tool for day-to-day decision-making. A clear strategy will:

• Guide priorities across teams: When teams know what the organization must be good at to succeed, they’re better equipped to determine their priorities. They can see what goals align with strategy and which ones don’t, increasing their effectiveness.
• Provide a framework for saying "No": In any organization, resources are finite. Having a focused strategy helps everyone understand what to avoid, which is just as important as knowing where to lean in. 
• Keep you adaptive: Markets change, and so do the challenges and opportunities within them. A good strategy isn’t set in stone; instead, it adapts as conditions evolve. When your strategy is clear and tightly focused, you can be nimble in addressing shifts in the landscape while staying aligned with your organization's ultimate goal.

Practical steps to identify your strategy

You might be wondering: how do I define a good strategy for my business? Here are two questions to kickstart this process:

1. What do we need to be exceptionally good at to win in our market?
2. What challenges will we face while working toward our organization’s Ultimate Goal?

Take the time to answer these questions thoughtfully. In doing so, you’ll end up with a unique and powerful strategy that will tell you where to direct your resources. It will help teams stay focused on the few things that matter most.

As a result, you will also become great at these things, and that's how strategy will help you realize your ambitions.

Interested in exploring how Perdoo can help you put strategy into action? Get your free Perdoo account to see how we make strategy execution easy and effective.

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