Most documents labelled strategy are goals, plans and initiatives assembled without the element that makes a strategy a strategy, which is choosing what not to do.
The definition problem
Strategy is frequently used to mean anything important or long-term.
Which makes the word useless, since a plan to do more of everything is not a strategy in any sense that distinguishes it from ambition.
A strategy is a coherent response to a specific challenge, involving a diagnosis, a guiding approach and coordinated actions that follow from it.
The test is whether it rules anything out. If not, it is a list.
The diagnosis
The part most often skipped.
Identifying what the actual obstacle is, which requires distinguishing between symptoms and causes and being honest about internal problems.
Which is politically difficult, since naming the obstacle frequently implicates someone.
Strategies built without a diagnosis tend toward generic aspirations, because there is nothing specific for them to address.
The goals-as-strategy failure
Setting a revenue target and calling it a strategy.
Which specifies the destination without addressing how to get there, and it is extremely common.
Cascading the target downward, so each unit receives a share, produces a plan that is arithmetically consistent and strategically empty.
Coherence
The property that distinguishes strategy from a collection of good ideas.
Actions should reinforce each other, so that doing one makes another more effective.
Which means a set of individually sensible initiatives pulling in different directions is worse than fewer that compound.
Resource allocation is where coherence is tested, since spreading resources evenly across everything is the practical expression of having made no choice.
The trade-off test
A useful diagnostic on any strategy document.
Ask what the organisation will be worse at as a consequence.
Which produces silence in most cases, because the strategy proposes improvement everywhere.
Genuine positioning involves being deliberately worse at some things in order to be substantially better at others, and organisations find this extremely difficult to state publicly.
Execution as an excuse
Failures are frequently attributed to poor execution.
Which is sometimes true and is frequently a strategy that could not have been executed — insufficiently resourced, internally contradictory, or dependent on capabilities the organisation does not have.
A strategy that requires flawless execution to work is a bad strategy, since execution is never flawless.
The review cycle
Annual strategy processes produce documents on a schedule regardless of whether anything has changed.
Which decouples the process from the actual strategic questions, and it produces the familiar pattern where last year's document is updated rather than reconsidered.
Reviewing when the underlying assumptions change, rather than on a calendar, is more useful and less compatible with planning cycles.
For a small business
The same principles apply and the formality is unnecessary.
Answering three questions honestly — what is actually stopping us growing, what would address that, and what will we stop doing to fund it — produces more than most formal processes.
The third question is the one that makes it a strategy, and it is the one most likely to be skipped.
Communication
A strategy nobody can state is not operating.
Which means the test is whether people several levels down can say what the organisation is trying to do and what it is choosing not to do.
Surveys asking exactly this generally find low proportions, in organisations that have invested substantially in strategy processes.
Simplicity is what survives transmission, and elaborate frameworks generally do not.
Measurement
Metrics shape behaviour, which means the wrong metrics undermine the strategy directly.
A strategy of premium positioning measured on volume growth will not survive contact with the incentive structure.
Which is why aligning measurement to strategy is part of the strategy rather than an implementation detail.
Emergent strategy
The observation that what organisations actually do frequently differs from what they planned, and that the difference is sometimes an improvement.
Which suggests treating strategy as a hypothesis to be revised on evidence rather than a plan to be executed.
Recognising an emerging pattern that is working, and resourcing it deliberately, is a form of strategic management that formal processes tend to suppress.
Scenario thinking
An alternative to single-point planning where the future is genuinely uncertain.
Developing several plausible futures, and identifying which actions are robust across all of them, produces decisions that survive being wrong about which occurs.
Which is more useful than forecasting precisely, and it is used most in industries where long-horizon capital commitments meet genuine uncertainty.
Capability
Strategies frequently assume capabilities the organisation does not possess and does not plan to build.
Which is where execution failures actually originate, and honestly assessing what the organisation can currently do is part of the diagnosis rather than a separate exercise.
Which is why capability building appears in good strategies as an explicit workstream rather than as an assumption.