Apart from companies that express or communicate their strategy poorly, or those that conflate a varied set of goals or targets with a coherent strategy (as Richard Rumelt said in Good Strategy, Bad Strategy: 'Goals are not strategy. Goals are wishes. Strategies are how one goes about achieving goals.'), one of the most common strategy issues that I observe in businesses is the disconnect between an over-arching organisational strategy and the ability to bring this to life at a departmental or team level. Many teams and those that work in them often seem to simply not be aware what the company-wide strategy (set by those at the top of an organisation) should really mean in terms of what they should do differently, or what they should not do differently. And that's if they even know what the strategy is.
For what it's worth, Richard Rumelt's definition of strategy is (obviously) pretty good:
'A strategy is a coherent set of analyses, arguments and actions that respond to a significant challenge. A good strategy derives from consideration of many plausible courses of action and selects, in a deliberate, reasoned way, one/some of those courses of action to the exclusion of others.'
Richard Rumelt talks about his 'strategy kernel' in terms of a diagnosis, the creation of a guiding policy, and a coherent set of actions or direction. So a strategy, as I've mentioned before, is about making choices. And a strategy is not the same thing as a plan or a tactic (although these things seem to often be confused). My favourite exposition of the difference comes from Lawrence Freedman's Strategy: A History:
'Strategy is much more than a plan. A plan supposes a sequence of events that allows one to move with confidence from one state of affairs to another. Strategy is required when others might frustrate one’s plans because they have different and possibly opposing interests and concerns… The inherent unpredictability of human affairs, due to the chance events as well as the efforts of opponents and the missteps of friends, provides strategy with its challenge and drama. Strategy is often expected to start with a description of a desired end state, but in practice there is rarely an orderly movement to goals set in advance. Instead, the process evolves through a series of states, each one not quite what was anticipated or hoped for, requiring a reappraisal and modification of the original strategy, including ultimate objectives. The picture of strategy… is one that is fluid and flexible, governed by the starting point and not the end point.'
Many businesses set a company wide strategy and then regard everything else as a tactic that contributes toward that strategy. Not so. Dr Eli Goldratt (in 2002) observed that strategy itself has a hierarchical structure, and that there might be several layers of strategy that are each connected by necessary conditions (so objectives at a lower level are prerequisites for objectives at a higher level – the former more specific or detailed than the latter). Goldratt defined strategy as the answer to the question 'What for?' (in other words the over-arching direction needed to get to an objective), and tactics as the answer to the question 'How to?' (the steps in the process needed to pursue the strategy). In defining his strategy and tactics trees, he argued that if strategy was hierarchical, every strategy should have an associated tactic and the two should always exist in pairs at every level of the organisation. Thus, a strategy can be brought to life and related to specific actions at every level.
Such a simple idea, and yet so often forgotten.