The second-most confusing word in business

_{[Read time: 3.5 minutes]}

Strategy.

I used to introduce myself as a business strategist.

Seemed clear enough. Two tidy words that should tell you exactly what I do.

Except...they don’t.

I kept running into the same problem: people would nod along, then follow up with something along the lines of brand strategy, marketing, or tactical planning.

At first, I blamed myself for being vague. But the more I listened, the more I realized everyone has their own internal definition of strategy.

It’s a word we all use, but rarely agree on.

Here’s what I know:

I’ve been paid to “do strategy” since 2012 — seven years (7) at Harvard, six years (6) running my own firm. But even before I claimed it as my title, strategy was just how I moved through the world. Not by brute force, but by design.

So let’s me help you clear up the confusion.

I’ve broken strategy into five layers. Use this as a reference for yourself, your team, or your next client who says “we need a strategy” but can’t explain what that actually means.

Keep it. Share it. Argue with it.

But know this: the more your business matures, the more you’ll need this to make decisions.

Strategy (The big-S)

Let’s go big picture here…or what some like to call ‘the 50,000-foot view.’

Strategy is just the art of choosing how to get from here to there.

Or put another way: strategy is a set of intentional constraints that make future decisions easier.

And you can apply this to anything: business, sports, board games, travel, weddings.

The point of a strategy is make every downstream decision easier (reducing mental fatigue, maintaining alignment, and managing resources).

And yes, strategy can evolve, but it shouldn’t change constantly, either.

Nothing below this matters unless you’ve got a grip on your big-S strategy.

Really important.

Business Strategy (BS, but not that kind)

Business strategy is big-S but applied to business.

Sounds obvious, but most people still confuse business strategy with brand strategy.

It’s rooted in structure and economics.

• Where you play

• How you win

• How big the prize needs to be to make it all worthwhile

It’s built on a triangle of positioning: price, problem, buyer.

Everything else flows from that.

Brand Strategy

Brand strategy makes your business strategy credible, memorable, and desirable in the minds of buyers and your own team.

I am not pretending to be an expert in brand strategy by any means, but I know this…brand strategy isn’t about being creative. It’s about being remembered. It sharpens recall and lowers risk.

Especially when you're not in the room to explain yourself.

Business Model

Sometimes this phrase is used interchangeably with business strategy.

It’s not.

If business strategy is structural, then business model is mechanical. Hence the reason why you’ll hear me sometimes say “business mechanics.”

The business model is how you operationalize your strategy into revenue (and convert it to profit).

Products. Offers. Delivery format. Billing structure. Labor. Cost structure. Risk sharing.

And it does this through your functional strategies.

Functional Strategy

Each function (sales, marketing, finance, delivery, ops) asks the same question:

“Given our strategy and model, what specific edge should this function create, defend or maintain?”

Don’t look at it as busywork, they drive the daily activities that build your moat.

• Marketing captures demand from the exact buyers the model was built for

• Sales defends price, scope and value throughout the buying journey

• Delivery fulfills the promise at the cost and quality required

• Finance monitors the gauges (resources, margin, runway) and sounds the alarm when things go off

• Operations maintains the systems and standards that keep the internal engine running smoothly

Most of us who call ourselves “strategic” are actually playing here (in functional strategy). And that’s fine for the value you provide clients. But don’t misplace it for business strategy.

So what…why does this matter?

I could go into a long monologue here. But I won’t.

You already feel the importance of strategy, you just might not have taken a moment to define it clearly.

Because the opposite of strategy is brute force, improvisation, and running full speed…until you hit a wall

You don’t need perfect strategy. But you do need a framework to think with. Borrow mine. Build your own. Just don’t stay fuzzy.

Oh, and the first-most confusing word in business?

Value.

Thank you for reading.

See you next week.

— Peter

P.S. When you’re ready to work together, start with a price audit. You’ll know exactly where your pricing elements are broken…and some immediate action steps to fix it.