A question I hear a lot in business is “What is the difference between Strategy and Tactics?” We will answer this question in this video and explain why this is important for your business. Watch now!
Want to chat with me live? I have daily live streams on my gaming YouTube channel. I stream every day at 8:00pm MST except on Saturday which is at 10:30am MST. https://www.youtube.com/channel/UCyA6hunVgBiE3QEDn9GpQtw
VIDEO SUMMARY
Strategy and tactics are ideas that confuse a lot of people. I think part of the problem is people talk about these terms in a theoretical sense. I want to give you a definition that is practical in the day to day operations of your business.
Let us start with Strategy. Strategy is the description of your ideal market position. This is made up of a several different things:
- SWOT Analysis. Understanding your strengths, weaknesses, opportunities, and threats. This tells you your competitive advantage in the market.
- Customers. What is your target market?
- Product. What are you selling?
- Value Proposition. How does your product fit the customers need in a valuable way?
Strategy is the description of where your company is going. All this information is contained in a strategic plan. The point of the strategic plan is to communicate and focus everyone on the same goals.
Let’s talk about tactics. Tactics describes how to achieve the strategy. These are step-by-step tasks you are going to do in order to achieve the goals in the strategic plan. So you might look at the next quarter, and make a list of the things you will do to achieve company goals. That list is your tactics.
Strategy is the destination. Tactics are the journey. Let us use the example of a roadtrip. Imagine your goal was to take a trip to Yellowstone National Park. That is the destination. Your tactics would be, planning the route, gathering supplies, and fueling up your vehicle. Tactics are the things you are going to do to achieve the strategy.
Why is any of this important? Imagine you have 1,000 people in your organization. Each one of those people is making decisions every day. Hopefully those decisions are aligned with the company’s strategic goals. If an employee needs to buy some new machine, what machine do they buy? Do they buy the more expensive one that lasts longer or the cheaper one with a shorter life span. That decision depends on how often the company is going to use it. If you have a clearly communicated strategic plan, you can hand that document out to everyone, and they can use it when making decisions.
Another example, imagine your IT manager is purchasing new software for the company. The choice of software is going to depend on where your company is going. Does your company have offices across the country? Or will they be located in one central location. That will impact your ideal software. If the IT manager does not know the strategy, they might purchase something that hinders your company goals.
Historically, strategy and tactics are military terms. This is how you would describe how you would go to war. What the army does is very similar to what a business does. You are setting up your plans, communicating them to your troops, and then implementing those plans.
Here is the ideal situation. The leader develops the strategic plan and hands it to the department heads. The department heads then generate step-by-step tactical plans for the next three months, and then hands those plans back to the leader. This then forms a very thorough plan of action. You know exactly where you are going and how you are going to get there.
The problem is this is a lot of hard work, and a lot of companies do not do this. What ends up happening is people are not focused, and resources get wasted. Strategy and tactics are things you can implement in your business, that are free, and can save you a lot of money. If you have clear communication around where you are headed as a business, you can do so much more with a lot fewer people. This is all about communication, and getting all your people on the same page, and dominating your market. That is why a clear understanding of strategy and tactics is important for your business.
Leave a comment down below letting me know what you think!
If you find these videos helpful, please subscribe to my YouTube channel.
Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.