Most business owners have plenty of ideas about how to grow.
The problem is that ideas are not strategy.
Opening another location, adding delivery, selling new products and spending more on marketing may all sound like good ideas. But unless those decisions support the same direction, the business can end up investing in several different strategies at once.
“Strategy is not choosing every good opportunity. It is choosing which opportunities belong together.”
What makes a decision strategic?
Not every decision in a business is strategic.
Some decisions are givens. They are already fixed or largely outside your control, such as available capital, existing commitments or regulatory requirements.
Other decisions are tactical. They concern the everyday actions required to operate the business, such as staff schedules, advertising copy or which supplier to call.
Strategic decisions sit between the two.
They require a meaningful commitment, shape the direction of the business and influence many of the decisions that follow.
This can be thought of as a decision pyramid. The decisions at the top affect a larger part of the business and play out over a longer period. As we move down the organization, decisions become smaller, shorter-term and more tactical.
One person’s tactical decision may also become a strategic decision for the person below them. The owner may decide to enter a new market, while the marketing leader must decide how the company will reach it.
Where, how and when will you compete?
Most strategic decisions answer three questions.
Where will you compete?
Which customers, products, geographies and sales channels will the business target?
How will you compete?
What distinctive value will you offer those customers, and what activities will the business need to perform consistently to deliver it?
When will you compete?
Which commitments must be made now, which should be staged over time and which can be tested through a pilot, partnership or other lower-risk approach?
The difficulty is that these decisions are connected. They cannot be made independently or in a random order.
Consider a French bakery
Imagine Camille has owned a French bakery in an American city for about a year. It is the only bakery in the area specializing in traditional French cakes, pastries and breads.
Business has picked up, and Camille wants to grow. Before she begins spending money, she identifies five strategic decisions and several alternatives for each one. This is what’s called a “strategy table” - a strategy table can be a useful matrix to help Camille frame the specific choices she needs to make:
All of these choices could work.
The important question is not simply which option looks most attractive. It is which combination of choices creates a business that makes sense together.
Camille should begin with the highest-commitment decision: whom she wants to serve. That choice then influences the market she needs to reach, what she should sell, how the bakery must operate and where future growth will come from.
The correct order is:
Target customer
Market reach
Product offering
Operating model
Growth engine
In this example, the darker cells show one possible strategy for Camille:
Target customer: Food enthusiasts and occasion buyers
Market reach: Greater metro area
Product offering: Signature pastries, seasonal drops and celebration cakes
Operating model: Flagship with preorder, pickup and delivery
Growth engine: Social content, email and referrals
These choices do not all sit in the same column because the columns are not pre-built strategies. They are simply the alternatives available for each decision.
The darker cells show the specific choices Camille has connected into one coherent strategy.
If she had chosen neighborhood regulars instead, the rest of the business would probably look different. Daily breads, pastries and coffee would matter more. A walk-in café could become the main operating model, supported by local search, community activity and a loyalty program.
If she had chosen hotels, restaurants and corporate clients, she would need a wholesale range, centralized production, scheduled delivery and a direct B2B sales approach.
All three directions could work.
Trying to pursue all three at the same time probably would not.
“The choices at the top of the pyramid narrow the choices below them.”
Build your own strategy table
Start by writing the largest strategic decisions facing your business down the left-hand side. Then list the realistic alternatives available for each one. Do not choose each option independently.
A premium product strategy may require a different customer, operating model and growth engine than a low-cost or high-volume strategy. The choices need to reinforce one another.
The purpose of the table is to make those trade-offs visible. It forces you to move beyond a collection of good ideas and choose the business you are actually trying to build.
Good strategy is not a collection of independent decisions. It is a sequence of choices that reinforce one another.
Better by Monday
Build a one-page strategy table for your business:
Write down your five biggest strategic decisions
List two or three realistic alternatives for each
Start with your target customer and select one choice from each row
Check that every choice supports the ones above it
Write down the opportunities you are deliberately not pursuing
By Monday, you should be able to explain your strategy as one connected set of choices, not a list of competing ideas.
Until next time …
One practical way to improve your business each week