Strategy

Strategy comes from the Greek word 'strategia' which means 'generalship' (where 'strategos' means 'army' and 'ag' means 'to lead'). Perhaps the earliest book on strategy was Sun Tzu's 'Art of War', which was written around 500 BC (and is still in print!). The second most famous book on military strategy is Von Clausewitz's 'On War', published in 1832. Since then, business has adopted many of the military principles to help win in an ever-increasingly competitive climate.

Alfred Chandler, in 'Strategy and Structure' (1962) defined business strategy as 'The determination of the long-run goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.'

Bruce Henderson of the Boston Consulting Group more recently added the competitive focus with 'Strategy is a deliberate search for a plan of action that will develop a business's competitive advantage and compound it.'

Strategic focus over time has thus expanded, from basic resource allocation to a competitive focus. An innovative strategy in itself can be a huge competitive advantage (eg. Dell's lead in the computer industry through direct selling).

Strategy only partially comes from strategic planning: it is what you do more than what you plan. Henry Mintzberg described this as Emergent Strategy (in 'The Rise and Fall of Strategic Planning'), where you react to new events 'on the fly', molding your original Strategic Intent, which is perhaps the key outcome of the original planning activity.

Strategy helps three key areas:

Direction. The strategy can include vision, mission, objectives, etc. which help lower-level goals and objectives to be set across the organization.
Decisions. If you know the direction you are heading and specific goals, these will guide decisions.
Communication. Sharing the strategy helps get everyone going in the same direction.

Strategy

See also: