Every business, if it is to be successful, must solve the same difficult problem: How to fund the creation and sustainability of a business organization and organize capital, knowledge and people to deliver something to customers that they perceive to be valuable enough to buy, and to do so in a manner that achieves a profit.
Earning a profit rarely happens by luck. It requires integrated thinking and action to perpetually manage knowledge, skill and resources. The bigger the organization, the greater and more complex is the management challenge.
Strategy is the roadmap for success. It is an articulated expression of what the organization strives to achieve, and how it will go about doing so. If the destination is to achieve a mission and earn a profit doing so, then there are many different roads that can lead to that destination. Some are faster, some are slower. Some are wider, some are narrower. Some are bumpy, some are smooth. Some are close by, some are far away. Strategy establishes the direction to be traveled and the boundaries that will constrain the journey.
Once the strategy is articulated, it can be discussed, refined, tested, and measured. It creates context and focus. It becomes a compass to guide a human journey of discovery through problem identification and problem solving in order to create customers and earn profits.
Strategy becomes the backdrop for those engaged in the business task to apply their capabilities. It sets the context for the work to be done and the results to be achieved. To use another analogy, strategy is like a mathematical function in that it is the problem to be solved in terms of converting value for customers into profit.
But it is much more complex than mathematics because the number of variables are large and unknown. The problem can’t be solved by one mind, although it can perhaps be guided by a visionary genius or astute entrepreneur. Success requires the immense cooperative effort of a team of individuals capable of identifying and managing only the most important variables in the equation with the least possible effort.
© 2020, Barry L. Linetsky. All Rights Reserved.
Barry Linetsky is a Partner with The Strategic Planning Group in Toronto, Canada, where he and his colleagues have been helping executives and owners define and align their business purpose with customer values since 1994. Barry is the author of the acclaimed book The Business of Walt Disney and the Nine Principles of His Success (Theme Park Press), and an Honorary Disney History Institute Historian. His two most recent books, Understanding and Creating Vision and Mission Statements and Understanding and Creating Strategic Performance Indicators and Business Scenarios are both available from amazon. Barry’s thought-leadership articles have been published by Ivey Business Journal, Rotman Magazine, Mises Wire, and the Economist Intelligence Unit in conjunction with Harvard Business School. Barry is also a writer, researcher, analyst, photographer, and business strategy enabler. Read his blog and learn more at barrylinetsky.com. Follow him on Twitter @BizPhilosopher.