What is the difference between a strategy, stratagem and a tactic?

Strategy is one of those words that people sometimes use either too much or in a way that references it inaccurately. While there are almost as many definitions within a business context as there are organizations. Here are what I consider to be safe definitions of the base terms:

Strategy: Strategy is HOW you are going to accomplish a goal. At the corporate level, it is how your organization plans to position itself for greater success within a specific market.

Business stratagem: A stratagem is a play your organization makes to attain a goal or to gain an advantage over a competitor.

Tactic: Tactics are the specific activities used to accomplish a strategy. It’s like a component of an action plan.

Not everyone spends their time or prefers to spend their time thinking about strategy or tactics. There’s nothing wrong with that most of the time. The secret is to make sure that people who focus on tactics come up for air to ensure what they do contributes to a strategy. The relevance of almost any tactic degrades over time, so the work of alignment to strategy needs to be a part of your planning cycle.

Organizational potential

Before you go on any kind of strategy or change management rampage or try to determine where your sales have gone, start your investigation on the bottom row of your strategy map – your people. Driving out major change without this foundation in place is nearly impossible. People, morale and the existing culture determine the degree of potential your organization has to perform. It is in fact a great limiting or enabling factor.

Organizational culture plays a highly significant role in driving behaviors, determining the degree of employee engagement and eventually customer satisfaction. The challenge for many companies is that once you’re a part of a culture, the dynamics of it become part of how you act also. Negative cultural attributes drive defensive, counterproductive and fear-based behaviors that stand in the way of your progress. Because of the realities of organizational dynamics and power structures, leadership styles have the strongest impact on the behaviors of employees. This is compounded by the human tendency to look for information that supports our existing beliefs, and to think well of ourselves so we often choose cultural measurement tools that don’t highlight behaviors that are getting in your way. They become a blind spot to your own success.

Old-school tactical thinkers and managers often can’t make the correlation between investment in people and financial performance, but it’s definitely there. While the investments you make in people often seem invisible, it’s because you’re investing in potential. It can’t always be quantified as a direct ROI. The degree that your organization successfully capitalizes on that potential is a product of leadership.

In many industries, the degree of specialization coupled with employee supply (demand) determine the dynamics of how employees are treated because of the relative power of the organization versus the employee. Some employees leverage aggregation through unions to create greater leverage over employees. There’s a balance here in that we pay only as much as we have to, anything more seems wasteful. Th problem with this kind of arrangement is that companies get about half of what employees have to bring to the table in terms of effort, going above and beyond (when they don’t have to) and passion for corporate success (having a stake in the game). Companies need to move from working to manage leverage against employee groups and toward creating environments where the motivation is more positive. Employees know their degree of power in a situation, and yet the unspoken power is the degree of their best that they give you every day.

Motivating people to give you more of their potential is driven among other things by people feeling their contribution is valued and respected. Moving from fear-based thinking to opportunity based thinking starts to draw a completely different level of performance from employees. It will cause you to attract different people as well, the right kind of people. By removing the unspoken power struggle from organizational dynamics and shaping your company into a place where people feel fortunate to be employed there, proud to be associated with and excited to help create the future, you will open up potential your company never knew it had.

Do or do not. There is no try.

I love that quote. Just a good piece of Jedi wisdom.

A concept well known in the planning field is that of the “burning platform” (for change). A burning platform is the idea that people standing on a burning platform are highly motivated to make something happen and solve the existing problem. If that platform has a couch on it, and it’s not burning eventually someone will have a nap on it.

If you are working with a group that doesn’t consistently align to the changes you’re planning, there’s not much point doing anything else until you’ve established why they need to go the distance to change. Another associated and fairly well known fact is that most companies (around 80%) fail to execute strategy. Another one yet is that most executives spend less than 2 hours a month talking about strategy. This isn’t a measure of whether the strategy was going to be effective, it’s that it just didn’t get implemented or implemented well.

There are a plethora of reasons why this happens, but the most common I’ve seen is cultural. People don’t always realize what it takes to make a decision in the board room actually impact the behaviors of every employee. It’s my belief that the greatest challenge for strategy is what happens when you involve the other 95% of the organization that don’t perceive they have the same stake in the game that senior and executive management do. Without a consistent understanding of WHY alignment to change is critical, it doesn’t happen. This is why we have leaders: to inspire and lead the change.

I therefore ask the question: When your organization adopts a competitive strategy: Do you implement strategy (like your lives depend on it), or do we just try to implement strategy?

Strategy hierarchy

Does your organization have a clear strategy hierarchy?

One of the major uses of strategy is to form the context for decisions related to change. This context drives out action that supports a common purpose. In order for this structure to work, it’s critical that you maintain a clear hierarchy for the direction that is built. When you have all the right pieces but without a commonly understood structure, decision making becomes more challenging as the context doesn’t fulfill its purpose.

This can start when an organization starts to use terms like “board direction” or “executive direction” instead of qualifying whether the decisions made are competitive strategy, positioning strategy, strategy map outcomes or others. The risk is that not referring to strategy components by their position in the hierarchy that people lose clarity on how it fits. How it fits determines what decisions you make based on each.

From a practical standpoint, this is an important distinction to make prior to engaging a board planning facilitator. There are so many strategy development techniques that not focusing the facilitator on exactly what you need often results in a directional mess you’re going to have to live with in years to come.

Maintain a clear hierarchy, categorize directions decisions into what they actually are, and be purposeful about how you develop each component. This is definitely worth every second of time you spend up front.

Live and work like you mean it

As an organization, what is more important than acting with purpose? To what extent does your organization act with purpose? Do all of your employees understand what the organization is working to achieve in the long term? How about in the short term? Or… do people focus on the task at hand. Task at hand thinking is an important part of most people’s job, but unless it’s supplemented with reconnecting with long-term direction and objectives it’s unlikely your organization is really moving ahead.

Strategy is executed when it impacts the people that come to work every day, not when it’s printed in a business plan or even when you think it up. In order to become useful, your organization has to have the mechanisms in place to steer its resources. This doesn’t happen by accident.

This applies as much to personal life as it does with organizations. People that know where they’re trying to get to, understand what they have to focus on to get there and are prepared to make the sacrifices usually get where they’re trying to go. The rest generally don’t.

At work or at home, is there anything more important that acting with purpose and living like you mean it?

The most valuable element

Before you get your hands on an organization and start to work your magic, there are a few things you have to establish or everything afterward will be a struggle or fail. This brings me to what I describe as the most valuable element, trust. As an intangible asset it can’t be measured in a physical sense, but if you could, it would be worth more than gold by weight.

Trust determines the degree to which you will be able to impact and influence change within an organization. Relationships, credibility and consistency of follow-through earn you trust. As important as being a brilliant strategist is, your ability to bring your work to life all depends on your ability to inspire the engagement of those who follow.

Abundance mind-set

There are many different ways to look at the world, and one important decision relates to the degree of abundance in your paradigm. People often carry thinking habits from their personal lives into their thinking for your organizations. Hard times creates habits that many people keep when the market turns around, and some of these habits limit your future potential by lowering your understanding of real potential to a very limited perceived potential. Even when the market is struggling, there are always people that clean up. In most cases, there are 100 opportunities to be bigger and better than you have even thought of.

Spend some time thinking about what you’d have to do in order to grow your business by a factor of 2, 5, 10, or 100. Growth doesn’t have to be limited to 4% or 10% per year.

Your thinking is always a greater limitation than your competitors are.

Why planning exists

Planning has one main job. It’s to ensure people are moving, and moving in the right (read: same) direction. Not everyone moves at the same pace, but not moving is never good enough. If people don’t know where they’re supposed to go, some will move in different directions and others will sit down and chill out until you provide them with a reason to move. Creating this sense of clarity and momentum is what planning is all about…

Your potential is far greater than you realize

Why is it so important to get into detail on strategy? It’s a simple answer: When your job is to organize groups of people to achieve a task, they have to know 2 things:

1) What do you ultimately want to accomplish? (vision, long-term direction, mission, etc…)
2) What do we need to focus on in order to make that happen? (value discipline, strategy map, brand strategy, positioning)

After you create the direction, the work of communicating and aligning ALL of your resources to the direction is a much larger job than most people understand. It’s what determines how much of your corporate potential you are going to realize. Once you realize that your potential is always infinitely greater than your current performance, you can start to see what planning is supposed to be about.

Wrap your head around this… The greatest reason to plan is because what your organization is currently doing in terms of performance is a fraction of what its potential is. The only way to get there is to determine clever positions of competitive advantage, and relentlessly align your organization to deliver a specific form of value to customers. That’s called planning.

How do you change old behaviors within an organization

I recently posted up on the Execution Premium website to a colleague who had a question about how to change old behaviors within an organization:

We are in the middle of transforming our business and I was in your shoes about a year ago. The good news is that we’re making a lot of progress. Some of the things which are really helping are 1) creating greater clarity and specificity in the direction of the organization 2) using that to lead greater integration between teams 3) engaging employees in a deeper way and 4) creating higher degrees of accountability (nowhere to hide from the change). All of this adds up to what really feels like momentum now.

To that end, we’ve gone back to the basics. Starting with a strategy map, commitment to a value discipline, creation of a set of customer experience principles based on the value discipline, and now we’re building a competency framework to attach. Knowing the outcomes the company is working to achieve, the form of value you exist to create, the exact attributes of the customer experience, the behaviors that need to be fostered really helps people get what you’re trying to do. It takes the focus off of the daily grind. A lot of leaders think they can get by without giving the definition its due diligence, but it always creates problems later further down in the organization. The problem is that most of us are used to working in organizations that don’t have this clarity, and reading about companies that do so it feels normal. All of the functional groups are very excited about the work, because there’s a much greater sense of momentum when there is clear strategy they can attach their work to. It’s a focal point for alignment.

This clarity of direction has started to solve a lot of problems within each of the teams as they work to align the organization to the long-term direction and the value discipline. What we’ve discovered is that when you’re not clear on your value discipline, decisions are being made across the organization that become barriers to your success. The business model attributes that support one aren’t neutral to another, they actually resist the other two. Example: Accounting releases an allocation system that would work well to an operational excellence focused organization, but drives the wrong behaviors for a customer intimate organization.

Engaging employees in discussing two things has been very successful for us also. The first area is around identifying and understanding the business environment – things that are supporting and resisting our success across all focus areas. The second is around the business issues that stand out as the greatest challenges for success. This increases their stake in the game, and it’s voluntary. We continually refresh this single view of the environment and it’s an input and output of every planning session across the company.

Finally, we’ve formalized the mechanism of strategy by putting planning standards in place that creates a stronger accountability framework across all levels of the organization. It’s not a big “heavy” though, it actually saves them time from how many of them used to plan. If every team across your organization isn’t always talking about the change they’re trying to create, you don’t have a rudder to steer your organization.

One final area I would look at is your measures. They drive behavior when they represent a gap that needs to be closed. We’re also in the process of refreshing the measures. Some organizations want to keep measures where they used to struggle, but have overcome those old barriers. They’re proud of the work, and as long as the board lets them – they become slam dunk measures which leads to complacency. The biggest of a number of problems with that is they don’t direct how the company is working to improve.

That’s all for now, best of luck… I’d love to hear what ends up working best for you so please check in.