One of the main purposes of business strategy is setting direction. The strategy defines the course of the organization required to achieve its goals and objectives and move cohesively forward.

Business strategy is a statement of where and how the organization will compete. It defines the competitive advantage that the organization will utilize in providing value to a defined set of customers. It serves as a directional signpost for the decision-making processes of the organization. As such, the business strategy statement must be crisp and clear.

A good business strategy is visionary. It looks forward, describing how the organization will compete in the future in a way that is more effective than today or is responsive to foreseen changes in the market environment. Since a strategy is visionary or dynamic, it drives movement or action.

By defining where and how to compete, the strategy naturally defines the priorities for the organization. The strategy prompts the question “what do we need to do in order to compete effectively as the strategy describes.” These priorities then are the driving force behind the tactics and actions in a strategic plan. This is the direction that the organization needs to be moving.

There is a danger in becoming so fixated on a given direction that the organization does not see the cues that tell of a change in the market or of a need to re-think or revise the strategy. A healthy organization steps back occasionally to question assumptions and refine their strategy.

If the organization has a clear business strategy it sets direction for all business decisions and the allocation of resources. A good strategy statement keeps the organization on the path towards achieving its goals and objectives.

Is your organization’s business strategy clear enough to set the direction for resources and actions?