What is Strategy in Simple Terms?

Based on Thoughts of Jack and Suzy Welch

Strategy is deciding a winning move.

What is winning? Achievement of objectives.

Whose objectives? Objectives of the group of which your are the leader or manager or CEO.

The decided winning move has to be converted into a broad direction, right people are to be put behind it and they are to be encouraged to continuously improve the delivery of the move till the product or service is delivered to the customer in a business context. Empowering an employee is to train that person to develop the ability to improve continuously and deliver exceptional output and motivate him to deliver it.

Some organizations may enfeeble their employees. They do not provide proper instructions, keep low expectations from them and then frustrate them with approval processes and criticism for every movement.

To develop strategy for the coming planning period the main issues to be considered are:

1. What are the drivers of growth and profitability for the business?

2. Who are the main customers and why do they buy our products and how do they buy?

3. What is the competitive landscape and where do we fit in?

4. What innovations or new moves that each competitor has done that significantly affected the competitive picture in terms of new products, technologies, distribution channels and human resources?

5. Have you lost customers and human assets or have you gained?

6. Think what your competitiors can do in the future.

Now decide what is your winning move. Strategy is resource allocation. The resource allocation defines the way you are positioning your resources for next period's game. Are you acquiring new companies, are you introducing new products, are you increasing marketing investments, are you increasing training of your human resources or you increasing your human resources? The decisions will lead to action. And the results tell you the effectiveness of your strategy.

Jack and Suzy Welch, Strategy is about finding the big'aha!', Mint, 4 Jan 2010, Page 7.

You can watch videos of talks by Welchs in www.livemint.com/welchvideo

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