Why Strategy, What Strategy

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I was inspired to write this article as a result of reading, The Strategic Thinking Manifesto by Rich Horwath. It’s an excellent piece you will benefit from and enjoy. I am putting a financial advisory spin on the material.

What is a strategy?

Whether you are a one-person financial advisory practice, a 20-person ensemble practice, or a 10,000-person financial advisory firm, you must define your strategy, have a written business plan, and review it very regularly as a leadership team. Often, I have seen mandates come down from “on high” to submit your business plan. Because they come from “on high,” they are often short, written, reports, sent upstream, put in a draw or file, and never seen again. Often the business plan is just how much new business we are going to get in the next time period. Sometimes reports are aggregated, corporate decisions made, and sometimes resource plans developed. Sometimes quotas are passed back down that are related to projections, sometimes not. Rarely do the plans sent upstream outline a strategy and tactics as to how those goals will be reached because “on high” primarily wants the numbers. Local management may or may not focus on and vet the how tos.

The data in the Horwath’s article is fascinating. While the piece discusses the top 10 strategy challenges and the frequency of each challenge by company, the real value is that not only does a survey say, “67% of managers believe their organization is bad at developing strategy,” but that the definition of the word strategy can be clarified. The author defines strategy in this article simply as “the general resource allocation plan.” However, in his book, StrategyMan vs. The Anti-Strategy Squad, he updated the definition to "the allocation of resources through a unique system of activities to achieve a goal," or even more simply, “how you plan to achieve a goal.” “Once we’ve identified the goals and objectives, then we can determine the strategy, which is the path to achieving them. Strategy and tactics are how you will achieve your goals and objectives and how you will allocate your resources to succeed. ‘Strategy is the general resource allocation plan.’ The tactics are specifically how you will do that.”