Why your business may not need a strategy

Most businesses I work with don’t have a strategy—at least not one written down and available as a document. I’ve never had a business say to me, “Bernard, as our newly appointed marketing consultant, we’d like you to familiarise yourself with our strategy—here, take a look.”

And yet, on social media and business publications, “strategy” is the predominant topic the gurus talk about. You need a strategy! And by the way, make sure your strategy isn’t a plan…and not a vision. Make sure it is a real strategy!

It’s such a stark contrast. Everyone talks about strategy, but hardly anyone has one.

Small businesses don’t need a strategy

Strategy is like the steering wheel of a car—it gives direction. The thing is, for many young businesses, the owner isn’t yet sitting behind the steering wheel but is still outside, pushing to gain momentum. Only once the car—their business—hits a slight downhill can they jump in and start steering. Only now do they need a strategy.

A business with zero revenue momentum does not need a strategy. 

It’s only when the business starts to make money outside of the owner’s direct involvement that momentum exists and a strategy is needed. Most small businesses never reach this point, and so they never need a strategy. 

Admittedly, this view of strategy as “fundamentally irrelevant” to most SMEs goes against the common wisdom. For example, in this 7-minute clip by the South African entrepreneurial guru, Allon Raiz, he points out that small businesses often fail because the owner tires out since they don’t have a strategy. I believe this is incorrect. What actually happens is that the owner tires out because they’re pushing the car and cannot gain momentum.

Established businesses have a strategy

Strategy becomes automatic once a business has momentum—an established, often medium-sized company. At least, that’s what I found working with many such businesses over the years. 

Strategy is what happens between the hours of 3 am and 4 am in the owner or CEO’s head as they toss around thinking about the business direction—this is nothing other than strategising.

I’ve stopped asking the owners of these companies what their strategy is because they never have one—at least not one they can give me on paper or quickly recite. For them, strategy is very much in their head and evolving with every lousy night’s rest. There is a strategy, just not one cast in stone and bound in a ring folder.

Lately, when I have worked with these medium-sized companies, I have preferred to have coffee with the executive team and take notes instead of directly asking them about their strategy. By the end of the conversation, I will have their strategy written down on paper. Most clients find this process in itself valuable.

Only elephants need a document

Only once a business becomes corporatised does it need a strategy, which can be sent around as a PDF (or ring folder). I call these businesses circus elephants as they are big and must perform for an audience: stakeholders such as investors and regulators. These documented strategies are often worth as much as the paper they are written on, but they give a sense of assurance to nervous outsiders. 

An actual strategy is not a document; it is not even called “a strategy” but rather clarity of thought around how to achieve a defined objective. Whether such clear thinking is packaged as a strategy or even called one is secondary. 

Next time someone asks you if you have a strategy, don’t be shy to admit that you don’t. You either don’t need one or already have one—you just don’t know it!