There is nothing bad about having a long list of goals, it’s a good way to keep a record of interesting ideas and action plans. But still, any business needs a strategy. A strategy helps to keep a direction towards the “north.” A strategy helps to filter goals that don’t fit, and it gives coherence to the ones that are left.
Do you already have a strategy for your business? Keep reading and make a short self-test for your organization, probably there are things that you can improve.
1. The difference is not about the quantity
Having 100+ goals on your list doesn’t make them a strategy. A strategy might be just one simple idea about what you want (or don’t want) your business to be like. The purpose of the strategy is to give your team a shared vision, and explain how you want to achieve it.
2. The difference is not about the package
Phrases like “leveraging growth opportunities via leadership” make goals sound smarter, but they don’t help with a strategy formulation and execution. A good strategy is formed by clearly defined goals. The word “clearly” in this case means “no different interpretations.”
3. Strategy is formed by “strategic” goals (sorry for tautology)
Before we discussed the differences between strategic and operational goals. Most likely, a good strategy will be formed by “strategic” goals, e.g.:
- goals focused on change, not just on improving things;
- goals aligned with vision.
Some goals (we often call them operational goals) are just not big enough for the business in the long term.
4. A list of strategic goals is still not a strategy
The problem with strategic goals is that there are a lot of them, and most of them are excellent, but contradictory ideas:
- You might want to enter Brazilian market, or
- Implement a new CRM system that will do all marketing job for you, or
- Attract funding from a venture funds and create another Uber.
Normally, you cannot do all this at the same time. A strategy brings some systematic approach to this chaos. Strategy is about choices, and to make those choices we need to take into account many factors:
- What do our stakeholders want?
- What value do we create or could create for our clients? How do we make money?
- What threats and opportunities are there (a good old SWOT)?
- Why are we in the current situation? What constraints do we have? What do our competitors do?
- What are our priorities, goals, and how are they connected?
There are various frameworks to describe a strategy, and for sure Balanced Scorecard is one of the best and recognized.
5. To-do lists & Gantt charts vs. strategy maps
The most valuable part of the BSC approach is a strategy map – make sure you have a good one for your strategy. There are two signs of a good strategy map:
- It actually exists (and you can show it to your employees)
- It is a few pages only (1 page for a map, 2-3 pages to explain the supporting ideas)
Having 80+ pages document and calling it “Organization’s strategy for 2050” is fine, but consider making an “executive summary” version of this document as well.
In this context, we often hear complains like “It’s hard to maintain a strategy scorecard in Excel/PowerPoint.” You can create a prototype of a strategy map in any office software, but for a real project I’d suggest using professional software like our BSC Designer.
What about keeping goals in order? The tool might be as simple as a list of things to do, or a professional project management software will Gantt charts and other useful functions.
Once more, before searching a software tool, get a clear understanding of what you are actually looking for. A typical confusion that we discussed before is when people are looking for strategy execution software, when they actually need a simple project management tool.
6. Goals are about actions; strategy is about actionable hypothesis
There is a less obvious difference between a list of goals and a strategy:
- When we have a list of goals, in the many cases we have in mind a specific set of actions with the expected results.
- In a case of strategy, we have a number of hypothesis that we want to try. Those hypotheses are for sure actionable, but the results are not guarantied.
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- Easy steps from a simple Venn diagram to building professional Strategy Map
- Understanding leading, and lagging metrics
- Before/after strategy scorecard implementation
- Check list and examples
7. The goals are the steps towards success; strategy is a road map towards the “North”
What was the purpose of designing a strategy? That’s a good question! Didn’t we create another document that will be used at annual meetings only?! I hope this won’t be the case!
Thinking about a strategy, a good analogy might be a history of writing. People were able to communicate before writing, moreover, they were able to share their ideas across generations, but having a formal way of writing multiplied the efficiency and effectiveness of the knowledge they were sharing.
A similar change happens in an organization that created and implemented a good strategy. The organization was able to work before without a strategy map or KPIs, but having a good strategy helps to explain it to all the employees (find some facts here for a case you need to convince your boss), and helps to understand the priorities, and the context.
Feel free to share your thoughts in the comments block below or ask some follow up questions.