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Differences between strategies and tactics for business management

It is not the first time that I talk about the differences between strategies and tactics in this blog, but it never hurts to refresh some concepts. The difference is more than a mere theoretical or methodological concept, it directly affects the setting of objectives and the measurement of results . For this reason, we are going to see again what the differences are and why it is important that we distinguish both management approaches.

Strategies in business management

Business management is always strategic . We cannot think of a business and its viability without considering a medium and long-term future. I only know one type of business, or rather an attitude, that does not respond to this approach. When business is approached as an opportunity, with a short time scenario in which a very short-term competitive advantage is to be exploited, it is not necessary to make a strategy, because everything that is going to be done will be tactical.

This occurs in business models such as dropshipping, a type of retail where the retailer does not keep the goods in their inventory, but instead takes and passes the order. directly to the end customer. In these cases, a business opportunity is detected and opportunistic management is maximized to obtain short-term profit and when the window of opportunity is over, the business is closed. It is like investing in the stock market expecting short-term profits.

Except for an attitude like that, business management is by definition strategic. We start from a business plan, we make branding, human resources, financial, production strategies … that are derived from that strategic business plan and we seek that our project maintains continued growth for as long as possible, getting closer to our objectives and the success .

A strategy is a path. We start from point A and we want to get to point B that we have defined in that strategic plan. Therefore, a strategy is a way of achieving objectives that take us from mission to vision. And while it may seem strange when faced with such an approach for the first time, a strategy is neither a generic, idealistic, and ambiguous approach, nor is it ironclad and immovable. A strategy is a flexible and dynamic way to achieve the objectives (which must therefore also be flexible and dynamic).

As I already commented in a previously published article, a strategy must set SMART objectives , therefore we must deeply reflect on what our strategic objectives are to define them properly , being aware that, being medium and long-term objectives (between 3 and 10 years), we will not be able to fix them with precision and we will have to assume that they may suffer alterations derived from the management and the degree of compliance with our strategy.

To set strategic objectives, we must understand that these are beacons that will help us guide the way and that, if we deviate from that path, we will have to correct our course to find the appropriate strategic references or mark new ones if necessary. A strategy is a course and, sometimes, detours are part of the course, if with them we avoid certain problematic situations.

But, as I have said before, that they are references so as not to lose direction does not mean that they should be imprecise. Strategic objectives will be as precise as possible . I’m gonna put an example.

A strategy is like a space trip. The objective is to reach a planet, a more or less specific area of ​​the planet, but not a precise square kilometer from the planet. Our course depends on setting a specific and precise objective (that area on the planet) and we cannot start the journey without setting that course. It is possible that circumstances of the trip lead us to travel a path that is not “ideal” to reach the planet. It may even be that we cannot land in the zone set in advance and that we have had to look for a similar landing zone elsewhere on the planet. But, in any case, without setting a goal and charting a course (strategy) we will never even get close to that planet . We may reach another, but not that one.

The strategies have, in turn, stages, intermediate objectives, measurement points of the achievement of our plans … that will help us to measure the degree of fulfillment of the same. Those are the tactics.

Tactics in business management

A tactic is a way of fulfilling a part of the strategy and, as such, it has its precise objectives and its concrete actions that must be done to achieve success. We will have to set tactics to resolve each of the short-term situations that arise in our business management.

A tactic, therefore, solves cyclical issues, has short-term objectives, and uses precise tools and resources to solve problems immediately . Tactics must be planned and executed in order to advance business strategy.

If we continued with the simile of space travel, our tactics would be each of the actions necessary to make the spacecraft come to rest on the surface of the destination planet and leave us there safe and sound. From planning provisions for the voyage, takeoff, directing actions and life management on the ship during the voyage and right through to landing, everything that is done that allows to reach the final objective is tactics.

Tactics have very precise objectives, very easy to measure and to verify that they have been met, they require resources and very specific decisions, which optimize the final result of their application . As we will see in the next point, planning is crucial in the tactical management process of our plan, because it will be the mechanism that allows us to follow a roadmap full of multiple decisions, apparently unrelated to each other, but that make sense within business management strategy.

Tactics are always the consequence of strategic reflection . Nothing is done that does not serve our ultimate goal, because doing so would be using resources that we might need at another time.

How to approach a management plan with strategies and tactics

When approaching a management and business transformation plan, we will begin with strategic reflection and use our creativity to imagine the destination ( the vision, as we saw in the previous article ) of our trip. In the case of business management, our general strategy will take into account the tools available for the management of human, technological and intangible resources to set a course. As we will see in future articles, the strategic analysis process is essential to accurately know the internal and external situation of the project and evaluate options in the strategic definition of our management.

The business management strategy will have different tactics to meet your strategic objectives . The planning of the financial policy, human resources, brand management, production processes, logistics, marketing … will be the management tactics that the business manager will handle precisely to travel the trip.

In turn, with the objectives set by the management strategy, those responsible for the different areas of the company or the project, will develop their financial strategies , branding, human resources … and set specific objectives for each area, consistent and consistent with the superiors and necessary for the success of the project.

The achievement of many planning objectives, very concrete and precise (measured by KPIs), will ensure the achievement of general objectives of the area and business objectives, because all of them are consistent with the direction of the project.

Therefore, when it comes to approaching a management plan, it is necessary to start from the superior strategy, the business one, to reel off each of the different strategies and for each area to plan its work later.  Hence, for some decades now, the managers of the management areas have been represented in the management bodies of the companies, who will discuss and help define the business strategy, taking into account the capacity of each area to provide solutions to general management.

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