What is Strategy?

The word "strategy" has been around for a long time. The great Chinese military theorist, Sun Tzu, described his principles of war as early as 500 BCE.

Etymologically the word "strategy" derives from the Greek stratos, meaning army, and more narrowly from strategos, meaning a general. Thus it derives from "generalship" or, more precisely, a general's battle plan. It is normally coupled with the word "tactics," which comes from the Greek for "arranging things." The general formulated his plan and lesser officers then "arranged things" so that the plan would work out in detail.

Stated simply, strategy is a road map or guide by which an organization moves from a current state of affairs to a future desired state. It is not only a template by which daily decisions are made, but also a tool with which long-range future plans and courses of action are constructed.

It is common knowledge to say that businesses must have a strategy in order to succeed. It is closer to the truth to say that all businesses by definition have a strategy. How a company is organized and run is in effect a form of expression of its strategy. The difference between two companies is that in one the strategy may be well known by all and operating as a set of conscious guiding principles; in the other it may be unconscious or simply perceived as "the way we do things around here." Consciously formulated strategies are superior to "traditional" approaches only if the planning is insightful, well done, and adapted to the circumstances.

In short, strategy defines where you are, where you are going, and how you are going to get there.