by Tony Vidler       

Nearly every financial services firm says they have a strategy.  Which is remarkable really, as creating a competitive strategy is actually difficult usually. Especially if you don’t know what “strategy” is to begin with.  

Many practices have a plan, and that plan is usually full of tactical decisions and thinking.  But it usually isn’t strategic, because strategy is often not understood.  If you don’t what strategy is and haven’t deliberately decided what yours is, then you are destined to bob along in the general stream of market developments along with everyone else and faring no better unless you get lucky.

The most basic definition of strategy I can think of is “where and how are we going to win?”

The reason why it is so important to understand what strategy is and then to formulate a strategy for your business is that it helps you to make good decisions  about how best to respond to market dynamics.  New rules, new technology, new trends….new stuff is coming all the time which was not predicted when coming up with that first great business plan.  In fact for most professionals the plan probably didn’t survive the first 3 months of business, and every year thereafter a new plan is done which doesn’t survive the first quarter of the new year.

We cope with that and adapt through our tactical decisions.  Tactical decisions – or operational planning – is fundamentally “what it is specifically that we will do in response, or in anticipation”.

What should shape those tactical decisions though is whether they support our chosen strategy.

Whether to adopt any particular piece of technology or marketing idea, or whether to hire people or shift premises, or which network to team up with….all of these types of vital business decisions should be determined primarily by deciding whether they are consistent with your chosen strategy and therefore whether they will help you compete better in your ideal segment or place.  All of these decisions will either take you closer to winning in the way you plan to, or take you further away from winning.   You cannot possibly know which it will be unless your game plan is figured out first.

It is easy to get caught up in the momentum of the hustle and bustle of the working week, and it is relatively easy to be continually making new decisions in response to external forces.  Whether they are good or poor decisions is not always so easy to figure out – unless you have strategic clarity.

You don’t have strategic clarity until you can say “this is where we are going to compete, and this is how we are going to win at it”.

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