Strategy is the creation of a unique and valuable market position supported by a system of activities that fit together in a complementary way. It is about making choices, trade-offs, and deliberately choosing to be different.

It should not be confused with "operational effectiveness" -- what is good for everybody and what every business should be doing, e.g., performing the same activities your competitors perform, TQM, benchmarking, or being a learning organization. Thus, when developing strategies, the goal is to be different from your competitors. However, this does not mean that you are willing to do anything. But to determine where the opportunities lie that you can best exploit.

All "strategic plans" need to tie in with the "strategic organization plan." That is, in going back to the definition of strategy, the leaders of the organization should create the unique and valuable market position; while your goal is to support the organization with activities that fit together in a complementary way. Now that does not mean you cannot do things differently or set your own goals. It simply means that you need to keep your leaders visions and goals in mind when setting your goals. For example, if the leaders have ethics and diversity at the forefront of their strategic vision, you cannot put e-learning and knowledge management at the forefront of your strategic goals. However, that does not mean you cannot use e-learning and knowledge management technologies to bring about ethical and diversity goals.

Visioning is the start of any strategic plan. Once your leaders have set the organizational strategic plans, you need to determine how best your department can bring about changes that will support those plans. And while their strategic plans need to be "unique," you need to think along the same lines. In addition, a visioning strategy takes a four-prong approach:

    * Internal Audit - Where are you now (snapshot)?

    * Reading and Research - Where can you grow?

    * Organization Vision - Where is the organization going?

    * Vision - Where do you want to grow?

Note that first three steps can be performed in just about any order; however, the last step will normally be last in the process as it is based upon the other three prongs.

Strategies are forward-looking. They provide the guidelines for growth. With strategies, you are in reality, speaking of future performance gaps and how you are going to overcome them.

Tactical is more or less present or now orientated. It is about present performance gaps and how you are going to overcome them in order to support the strategies.

What have you done today to enhance (or at least insure against the decline of) the relative overall useful skill level of your work force vis-a-vis competitors - Thriving on Chaos writes of "enhancing", he is speaking of the strategic plans that will grow the employees to meet tomorrow's challenges. When he writes of "insure against the decline of," he is speaking of the tactical impediments that are presently challenging employees from meeting expected performance standards. In order to grow, you must be able to ward off present roadblocks. Thus, tactical plans are about providing performance stability so that change may take affect for growth.

Strategies normally looks an average of about six-years into the future (with a range of about 1 to 10 years). Tactics look ahead just far enough to secure objectives set by strategy. Thus, tactics is characterized by adroitness, ingenuity, or skill. Note that tactics is from the Greek "taktika" -- matters pertaining to arrangement. On the other hand, strategy has its roots in "office of a General" or "to lead").

Command & Control

There are four basic functions used within organizations to achieve their visions and goals: Command, Control, Leadership, and Management:

1. Command -forming and imparting visions:

    * Well formed visions

    * Clear goals and objectives for achieving the visions

    * QUALITY, low volume communications throughout the organization

    * Involvement to ensure results

2. Leadership - achieving visions through people:

    * Standard Bearer

    * Developing

    * Integrating

3. Management - implementing processes for achieving the visions:

    * Planning

    * Organizing

    * Budgeting

4. Control- ensuring resources went were they were supposed to go:

    * Routine, high volume communications

    * Coordination between activities

    * Structure to reduce uncertainty

With Control and Management the ultimate goal is "efficiency" -- addressing how well the process was accomplished (form); while with Command and Leadership the ultimate goal is "effectiveness" -- achieving goals and mission (results). Generally, to achieve "form," one must conceptualize "processes"; while to achieve "results," one must conceptualize "tasks."

Thus, command and leadership decide what the organization should be doing, while control and management ensure that the resources used to achieve the results are used efficiently (without waste).

Frameworks of Command & Control

Command and Leadership use the following framework:

    * Creating - creating a vision or task to achieve results.

    * Planning - how will you achieve the result.

    * Implementing - putting the plan into action.

    * Followup - ensuring that it gets done.

Related to the Command & Control framework is OODA.

Control and Management uses the following framework:

    * Observe - see what has happened.

    * Compare - what actually happened to what was supposed to happen.

    * Decide - does the comparison show that the objectives were met and determine what needs changing?

    * Follow-up - ensure the change actually happened.

I observe that people and organisations often confuse strategy and tactics. One might well ask, "Does it matter?" I believe it does.

To explain why, let me begin with definitions of strategy and tactics which are not prevalent in business textbooks and dictionaries.

Typically, the definition of strategy reads something like, "Long-term action plan for achieving a goal." The emphasis is on long term, actions and goal.

The definition of tactics reads something like, "A planned action for a particular purpose". The emphasis is on actions and purpose.

I prefer to think of strategy as a set of principles that considers how to use all of the reinforcing and opposing influences in a particular environment to achieve an outcome. It is the outcome and the consideration of all the influences which are the most important.

I prefer to think of a tactic as a set of actions or tasks to achieve a single goal, with no consideration of a wider set of consequences.

A carefully considered strategy is less likely to have unintended consequences. A tactic may well have unintended consequences.

To further illustrate let us consider a sales strategy. The strategy to increase sales by 35% in two years (outcome) is a lowest cost strategy (strategic intent). Not a customer service strategy or a customer value strategy or a market share strategy, but a lowest cost strategy.

The goal and the strategic intent make it clear, the reinforcing and opposing influences (principles) to consider.

They include, but are not limited to:

    * High volume will lower fixed costs per unit

    * The lowest prices for the same quality will increase relative market share

    * High advertising costs will increase fixed costs

    * Low advertising levels will reduce sales

    * A wide range of models will increase costs

    * A narrow range of models may reduce sales volume

    * Long supply chains will increase costs

    * Delivering exactly what solves consumer problems without over-servicing or under-servicing will result in the most appropriate cost

    * High labour prices will increase fixed and variable costs

    * High levels of automation will increase investment and fixed costs

    * Satisfied staff will be productive

    * It may cost more money to have satisfied staff

Working out what combination of these principles works to deliver the appropriate outcome of the least cost amongst competitors, is a strategy.

The strategy may well be comprised of a series of tactics, each designed to reach a particular goal. For instance:

    * Manufacturing of components which are readily available in the marketplace is outsourced

    * A direct model of distribution is used

    * Each product is to recover its fixed and variable costs and make a 30% margin within two years or be removed from the product portfolio

    * Sales people are put on a 40% salary, 60% bonus incentive scheme

Understanding the difference between strategy and tactics is important because people are indoctrinated over their working life to believe that strategy is long term. People are reluctant to change strategy. Organisational inertia sets in around strategy. Mostly, this is for a good reason. No-one wants to change strategy often.

However, when strategy and tactics get confused and people see a tactic as a strategy they are equally reluctant to change it.

In our above example, if we see outsourcing of common components as a strategy and do not change this tactic when we find that although the costs are low, the quality is also low we may lose sales volume. Our strategy was to increase sales volume by having low costs. It was not to lose sales volume by having poor quality as a result of outsourcing.

I have seen organisations where this very debate has been had. Outsourcing was seen as the strategy rather than a tactic to get a quality product that exactly solves the customer's problems at the lowest cost.

When environments change, people and organisations which are stuck at the tactical level also usually miss the opportunities the changed business environment produces.

A good way of determining whether you are stuck at the tactical level with what you believe is a strategy is to do some "what if" testing using a PESTLE analysis. A robust strategy will withstand significant changes in the external business environment. A collection of tactics will not.

Business Success Strategy and Psychology of Success

Small business success involves two major inputs. One, you must adopt a success strategy. Two, you must believe that you can succeed.

If you don't adopt correct strategy, self belief will not be based on ground realities and becomes mere bravado. If you don't believe you can achieve big, you will adopt too timid a strategy that achieves only small results.

Success Strategy Involves Clear Goals and Continued Focus

You won't know whether you have succeeded unless you start with a specific and measurable goal.

You break down that annual $125,000 into something like:

Month 1: $2,000

Month 2: $4,000

Month 3: $6,000

Quarter 2: $20,000

Quarter 3: $35,000

Quarter 4: $58,000

You will now be able to work towards specific small goals. As you achieve each small goal, your self-belief and know-how increases. Even if you fail to achieve the smaller goals, you will be alerted to the problem, and will have time to identify the factors responsible and take necessary actions.

How can you be sure that you will be able to identify the problem and remedy it?

That brings us to the next key success issue, FOCUS. Focus means that you are:

* Focusing on just one business, instead of trying to run several with consequent intolerable time pressures, distractions and final confusion about what is going on, and

* Committed to your business for the long term and thus oriented to learning what is going on in the business, instead of trying to get out at the first sign of problems.

Acquiring business skill through constant learning is the real key to success. You will have to master many things to run a business. For example, let us look at the simple business of house-painting. You will have to:

* Learn how to paint houses in a way that satisfies customers

* Learn to get orders jobs by quoting acceptable terms and convincing customers that you can do a good job

* Learn what tools are needed to complete projects in time and how to organize these

* Learn how to monitor your costs to ensure that you will earn a profit

Larger businesses will have to master additional skills such as obtaining their supplies at economic rates, managing employees, complying with government regulations, and so on.

It is only constant focus that will enable you to master the small details involved. With focus you will become aware of tactics and methods that work, and those that don't. With that awareness, you will begin to achieve successful outcomes in these small areas. And it is successful outcomes in the smaller areas that build up to overall success.

Business Growth Bottlenecks

The concept of bottlenecks explains the process of continuous business growth. It will also help systematize your learning process.

Businesses stop growing when a bottleneck prevents further growth. One simple example is production capacity. As a one-man house-painter, you can paint only so many houses in a week. Production capacity is your bottleneck. Now suppose you hire an assistant. You will have eliminated the current bottleneck and might be able to handle all the orders you can get.

Actually, it is possible that your assistant is not an experienced painter and can do only simple jobs. In this case, the bottleneck is employee skill. You will have to train your assistant to handle a full painting job to eliminate that bottleneck.

Once the capacity bottleneck is overcome, marketing might become the next bottleneck. You are able to get only so many orders and these orders do not utilize full capacity - yours and your trained assistant's. To overcome this bottleneck, you expand your operational area to nearby suburbs.

The above is the concept of bottlenecks in essence. At all stages, there is one overriding factor that prevents business growth. Identify that factor and do what is necessary to overcome the bottleneck. This will be a continuing process, with new bottlenecks appearing in place of those that have been overcome.

To make it work, you will have to identify the real bottleneck. This means you will have to go deeper into the factors. For example, your sales might be stagnant because there is some quality problem with the product. If you try to push up sales without remedying the quality problem, you might fail to achieve significant results despite expanding your sales setup.

Select the Right Business

There is one more issue, viz. selecting the right business. The right business is a business that is not intensely competitive, and also one that involves things you know or like.

With focus on the right business, and increasing self belief through the successes that come from such focus, you can indeed achieve ever-growing business success.