Businesses close on a daily basis. It wasn’t the intent when they were first created, but it’s the reality that we deal with. Entrepreneurs start companies with the hope that a new product or service will change the world. They believe that people will come begging for what they have to offer with their wallets wide open. But the truth is it doesn’t work that way. And while a product or service is important, there is much more that goes into a company’s success.

Creating a strategy is essential

Every business, organization, or entity needs to have a strategy. Think of your strategy as what your business does in the long term to meet your business goals. What needs it serves in the market. How it will continue to meet those needs far into the future. This is different from your mission, vision, or values. Those are about a higher purpose that you serve to the world. But your strategy influences what decisions you make on a daily basis to accomplish your business goals.

Without a strategy, you jump at anything that looks like it could make money, be interesting, or fun to pursue. And you continue to dilute yourself, confuse your customers, and spread yourself thin. If you don’t have a strategy, you just have a business. And your business is less likely to grow if it doesn’t have focus. Michael Porter said, “The essence of strategy is choosing what not to do.” So if you’re strategic in your decisions, you can say no to things and gain the focus you need. In business, as in life, it’s better to do fewer things well than to do more things poorly.

A real-world example of strategy

A quick example to show the benefits of strategy is to imagine you’re a hot dog vendor in New York City. Now, you may decide your strategy is to provide the best hot dogs to New Yorkers. And with that strategy, you’ve defined a couple of things…

First is your offering: the best hot dogs. While this may sound simple and obvious, it’s not. You’ve decided you’re not selling pretzels or falafels or burritos. Your focus is hot dogs. But not just any hot dogs. You want to sell the best hot dogs. Not the cheapest or vegan or most expensive, but the best. And you get to determine what that means.

Second, you’ve determined your market. You’re selling to New Yorkers. You don’t intend to spread to Jersey or Chicago but to focus on New York. And you’re not worried about catering to tourists either, but to the day to day people that spend time in New York. With that in mind, you can focus on what New Yorkers want, study their habits, and adjust to serve your target.

It’s a simple strategy for a simple business, but it leaves no doubt about what you do. It allows focus and creates purpose. And it’s repeatable if you want to expand from one vendor to 100. Best of all, this strategy allows you to create tactics to realize the goals you want to achieve.

Aligned tactics drive your strategy

So, let’s talk about tactics. Tactics are the small details to achieve the strategy we’ve defined. Think of tactics as how you execute your strategy. Much of what falls into tactics is what we like to call marketing. You can look at all the different P’s of marketing to determine what you need to do. These include the product (or service), price, placement, promotion, packaging, positioning, and people. But the important part is determining what those tactics are and sticking with it in relation to your strategy. Because tactics that aren’t followed have no value.

A real-world example of tactics

Let’s return to the hot dog stand as an example. You’ve figured out what your strategy is: to provide the best hot dogs to New Yorkers. Now it’s time to get tactical.

• What type of hot dogs are they? Beef, pork, chicken, kosher, organic? And what about condiments like mustard, ketchup, and onions to enhance the hot dogs? You need specificity to provide the best hot dog. Will they be craved by New Yorkers?
• What should the price be for the best hot dog? You need to cover costs but you also need to make a profit. And you need to be competitive. This requires research to understand what will work best for your goals.
• Where do you place your hot dog stand to attract New Yorkers? Where’s the most traffic? And when should you be open? Where are customers not served today that you can take advantage of? With a little market research, you can achieve better placement.
• How do you let people know about your hot dog stand? Barkers, flyers, or signage? Does it warrant a website or use of social media? Or do you leverage word of mouth? Promotion is vital to help get the word out.
• How do you package your product for convenience or notoriety? Big umbrellas over the stand or brightly-colored carts? And how should you dress? What you look like from the outside creates a memorable experience and brand.
• How are you positioned compared to the competition? What are you known for? How can you change the perception of consumers for the positive? Knowing what customers think of you can help to create a better position.
• What type of people should you hire? How do you want them to treat customers? What processes will make it easier for others to run the cart? Recognizing the people involved will help you create a better experience for all.

Thinking through each of these items and building tactics brings to light the strategy you want to achieve.

It’s best when they work together

Strategy and tactics are both essential in the pursuit of your goals for your business or organization. A strategy without tactics is like a car without an engine. And tactics with strategy is like an engine without a car. It’s only by combining the two that we can get to where we want to go.