Does your business have a strategy or just a vision?

Every company thinks it has a strategy – but nine out of ten don’t. That is the stark, albeit deliberately provocative, message from Freek Vermeulen, professor of strategy and entrepreneurship at the London Business School, who has spent much of his working life listening to CEOs present their company strategies at conferences and seminars. 

“A real strategy involves a clear set of choices that define what the company is going to do and is not going to do,” he says, in an interview with Work, the thought leadership journal for the CIPD. “Many company strategies are not about clear choices but about goals. Saying, ‘We want to be number one or two in our business’ is not a strategy, it’s an outcome you hope for. You still need a strategy to achieve that.”

Being number one or two in your markets is one of the most common substitutes for a strategy but there are many others. Some companies define their strategy by saying they will grow by 20% a year, others say they will focus on markets A, B and C, which happen, entirely uncoincidentally, to be the markets they are already in. What companies need to recognise, Vermeulen says, in an interview with From the Desk, is that: “A strategy is really a set of choices that fit together and make for a coherent combination.”

It is imperative, he says, that these choices combine in a clear, succinct statement of strategy: “If you present employees with a list of 20 choices, they won’t remember them and if they don’t remember them, you don’t have a strategy, you just have a PowerPoint deck.”