Strategy vs Tactics: What is the difference?
In every business, regardless of its form - small, medium, or large business - there are two main directions of time use by managers and the entire top staff of the company. It's tactics and strategy. And for this use there are clear rules, following which it becomes much easier to manage a business. And even for those owners who are both managers and hold other positions, the same rules apply. Strategizing and managing time are important for business leaders and owners. Let's look at these aspects in more detail and with examples.
Business management includes two main components: strategy and tactics. And for successful management, it is important to understand them and follow clear rules.
Strategy is the definition of long-term goals and ways to achieve them. It is a plan that defines where the company should go and how to succeed in the medium and long term.
Tactics are actions and decisions aimed at achieving specific goals and accomplishing tasks to support a strategy. Tactics is about working within daily operations and controlling ongoing processes.
Operations are the third component that complements strategy and tactics. Operations define the specific processes, methods, and steps that are performed on a daily or regular basis to ensure the normal operation of an organization. These are the routine tasks, processes and resources that are required for the operation of a business or project. They are designed to ensure daily activities and implementation of tactics.
Understanding these three components (strategy, tactics, operations) helps create a systematic approach to management and achieving goals. Developed strategies, effective tactical plans and well-organized operations help the organization achieve success and growth.
So, doing daily tasks, but not having a clear goal, that would be productivity. And it has nothing with efficiency. We are interested in the result, not the completion of tasks. Often, employees perform tasks without thinking about the output. If you act in reverse, through the definition of goals to precisely determine which tasks need to be accomplished, then the game becomes much more interesting and on a larger scale.
The owner must fulfil his role: generate ideas, create new spaces for the expansion of the company. However, in medium and small businesses, it often happens that the owner tries to fulfil several roles in addition to his main one.
The worst thing is when the owner is the only person all functions in the company - from management to accounting and driving a car. For the effective growth of the company, it is necessary to delegate responsibilities and engage specialists. This may seem expensive but over time, it will lead to a significant increase in profits and effectiveness. However, if we leave the situation as it is, it will definitely lead to stagnation sooner or later.
Stagnation is the state or process of stopping or lacking movement, growth, development, or change. In different contexts, the term "stagnation" can be used to describe different situations. Let's take economic stagnation. This is the state of the economy when it is not growing or is growing extremely slowly, usually after a long period of time. Economic stagnation can lead to low employment, low investment activity and low consumer activity.
Stagnation can be quite harmful as it can lead to dissatisfaction, low productivity and lost opportunities for development and growth. Stagnation may have different causes in different contexts and may require reform, additional investment, new strategies, or changes in the company to overcome it.
If your company is facing stagnation, it requires decisive action, establishing new rules and high self-organization.
Let's take a recent practical example of exit from stagnation thanks to different instruments, planning and self-organization.
The client started his career as a DJ eighteen years ago. When the time came, he was ready to leave the number "1" role. He realized that he would not be able to reach a new level on his own. For this, he needed to organize his time, research the market, and performing all the routine work.
During a short period in the process of our work, he decided to hire an assistant. At this moment, he felt relieved and realized that organizational aspects are not exactly his favourite thing. In addition, he found people who are now engaged in monitoring, marketing, managing his social networks and doing all the routine work. He began to enjoy his "main course" again. At the same moment, he realized that he could help other DJs like him and deal with their organizational issues, which led him to create a new direction in business.
Thus, relieving himself, he saw new opportunities through the prism of his own experience.
Now, let’s look at some classic tools that help have helped to turn strategy into reality.
The Pareto principle, also known as the "80/20 principle", is an economic and management principle that states that most results usually come from a smaller proportion of efforts or sources. The Pareto principle states that 20% of the effort can lead to 80% of the results, while the other 80% of the effort leads to the remaining 20% of the results.
In strategic planning, the use of the Pareto principle can mean that the ideal proportion of time allocation is 20% for mandatory strategic planning and 80% for other matters.
Another tool that confirms the correctness and practicality of combining strategy and tactics is the Eisenhower Matrix.
In the context of business, this matrix helps to allocate time between strategy, routine tasks and force majeure:
The world is extremely chaotic, and force majeure are unpredictable events that can affect business. It is important to take them into account, and at the same time, their influence may be less than it seems at first glance. For example, a logistics company may believe that force majeure takes up 50-60% of the time, but in reality, they are routine tasks such as car repairs that they confuse with force majeure.
When the specialists in company defined these tasks as routine, it enabled them to:
Strategy is a key component of successful business management. Realizing the importance of strategic planning, a DJ who had previously ignored it began to use strategy as his primary function. This brought him more resources, inspiration, opportunities for development and, of course, a significant increase in income.
In addition, he had hardly dealt with strategy before. However, when he realized the feasibility of implementing mandatory daily work with strategy as one of his main functions, his resource, inspiration, and desire to create new directions opened for him in a completely different light.
It is important to understand that knowing the importance of a strategy is good, but the actual practice is a very important and interesting function of each CEO. It's important to regularly set aside time for strategic planning, even if it's just 1.5 hours a day. If you, as an owner or manager, do not manage to devote time to strategy every day, then you can allocate one day a week for this very important function of yours.
When there is a focus on a clear, understandable, and flexible future, there will be a genuine desire from the entire team to achieve it.
Using these principles, you can improve the efficiency of your business and achieve your goals.
Cotton, D. (2015) Key Management Development Models: 70+ tools for developing yourself and managing others. Harlow, England: Pearson.
Payne, M. (ed.) (2012) The pareto principle. Baltimore, MD: PublishAmerica.