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August 18, 2010 / Tony Arena

Top 5 business strategy mistakes that companies make

As a business strategy consultancy, Morgan Cradock has conversations with a variety of corporate clients in all types of situations. We have seen a little of everything during our consulting careers, but one thing we have noticed is that many companies tend to make the same types of mistakes when approaching their business strategy.

  1. Confusing “Strategy” with “Tactics.” Strategy and tactics are related and often intertwined, but they are not the same. Strategy is meant to take a big picture view of where your business is now and where you want it to go: what markets do you want to be in? Who is your ideal customer? How would you like to adjust your brand image or differentiate your company as a premium offering worthy of a higher price point? Strategy is the “how” and the “why” of your business – the fundamental road map for your company. Tactics, on the other hand, are more focused and detailed and wrapped up in the daily work of the business. Tactics are the actual methods used to execute your strategy. Tactics help your company decide how to promote your products, how to retain customers, how to adjust to competitive challenges. Strategy is often about the world as we would like it to be, whereas Tactics are about the world as it is. Both Strategy and Tactics are valuable and important; but if your company needs to re-evaluate your strategy, make sure that you are actually talking about strategy – long-term thinking, big picture brainstorming, and new ideas to reshape the direction of the business.
  2. Sacrificing long-term strategy for short-term planning. It can be tempting, in the daily press of business, to keep deferring your company’s strategy sessions in favour of the immediate needs of your business. Don’t do it! This is a mistake. Just as your company needs to adjust to daily events and all the little emergencies that come up during the typical work week, you also need to make time to focus on the longer term.
  3. “Everything” is not an option. Business leaders have to make choices. You can’t have the lowest cost and the highest quality and the best service; you need to prioritise based on your company’s unique competitive advantage. You need to identify the best places to put your resources and focus your efforts. You don’t want your company to be a “jack of all trades and a master of none.”
  4. Being too risk-averse. Although you do need to maintain focus on your business’s core differentiators, strategy is also not about saying “no” to everything. Some organisations use their strategy planning as an exercise in reinforcing the status quo: “this is what we’re good at, and this is what we’re sticking with.” What a missed opportunity! Instead, look for ways to dream a little. Get outside the mindset of your immediate challenges and think bigger.
  5. Lack of accountability for strategic planning. This is a problem with organisations who are “all talk, no action.” If your company leadership team takes a day out of everyone’s schedule to conduct a strategic planning workshop, but then nothing comes of it, you have just wasted thousands of dollars. So the next time you’re in a strategy session, make something happen. Get some specific commitments from your upper management to ensure that something tangible is going to change as a result of this conversation. Even if it’s a small step, if it can help move your company forward, the results will have been worth the effort.

Morgan Cradock consults with companies on strategic business planning for long-term sustainable results. We can help your company hone in on the right strategies and goals to drive your business forward.

Originally posted on: http://www.morgancradock.com/blog/?p=54

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