Do you know the difference between strategy and tactics? Most leaders who think they are talking about strategy are really stuck in tactics. Many times it is hard to see the difference. When you think you are developing a strategy for your business, could you be confusing it with tactics?
Strategy is the plan of action to achieve a major or overall aim. While strategy can be used in many contexts, it’s good to have strategy clarified from two vantage points.
A good strategy clarifies the dos and don’ts. For example, a story to help illustrate this point is IKEA. Their strategy could be described in the phrase “flat pack furniture”. They have chosen to ignore the desires of customers to have multiple, easy-to-access locations at which to shop, and IKEA also does not assemble or install their products unless you purchase those services at an additional cost. It is up to the customer to drive distances to get to their locations, complete the transport of the goods, assemble and install them. In exchange for these trade-offs, they have a significant price advantage over their competitors in the residential and small office furniture industry.
Tactics are the steps you take to achieve your strategy. The blessing (or curse) of the entrepreneur is that they are problem solvers. They get things done! However, many times they are not getting the “right” things done. Do you find that when you are having strategic discussions, you and your team very quickly jump to problem-solving? Too often this need for activity causes organizations to have to do 2 and 3 times the work required to achieve the desired outcome. Leaders will be proud of the outcome and not realize they unnecessarily worked everyone to death; including themselves.
So the challenge is to know which tactics matter and to focus them on the right problems, and that is why Strategy is so important. The Pareto principle (also known as the 80–20 rule, states that, for many events, roughly 80% of the effects come from 20% of the causes. Your job as a leader is to determine which 20 percent of the activities (tactics), when given the most attention, will have the 80% impact. This includes identifying those things you must “stop” doing. Read more…