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How to Communicate Your Long-Term Strategy
These four questions underpin business strategy — but most startups get them all wrong.
If you ask CEOs about their business strategy, you might hear statements such as:
- ‘Our strategy is to help our customers do X.’
- ‘Our strategy is to grow 100% this year.’
- ‘Our strategy is to internationalise.’
- ‘Our strategy is to build the best product.’
There’s just one problem: none of these statements is actually a business strategy. They are missions, goals, tactics, and descriptive statements.
What exactly is a business strategy? What are the advantages of having one? And what does strategic thinking really mean?
May the Best Man . . . Lose?
It sounds plausible: if you want to win, you have to be the best.
Which team wins the championship? The best team, obviously. Which army wins the battle? The best army, of course.
But what exactly does ‘best’ mean? Is Ferrari, for example, the best car?
Well, maybe . . . for some customers. Those in particular geographies, with a particular set of emotional needs, and a lot of money to spend may find Ferrari their best choice.
But other customers with different needs might conclude that Toyota is the best option — after all, it’s got great gas mileage.
There’s no such thing as an objective ‘best’ and there are many ways to compete well. Both Ferrari and Toyota achieve better economic performance than their competitors, albeit via different strategies.
Strategy is not about how to be the best. At its core, it’s a set of long-term choices that differentiate you from your competitors. It’s about the position, not the plan.
Four Questions to Clarify Your Strategy
The success of a business strategy is measured in a company’s ability to generate long-term profits. In most companies, the responsibility for setting and communicating the business strategy falls on the CEO.
