4 Levels of Strategy Every Leader Should Understand.

Strategy isn’t just a boardroom buzzword, it’s the heartbeat of every thriving organization. From top to bottom, each level plays a crucial role in shaping direction, driving execution, and sustaining competitive advantage.

Here’s how it all connects

1️⃣ Corporate Level Strategy: Defines the vision, mission, and long-term goals of the organization. It’s where big-picture decisions are made by the Board and C-suite, about where the business is headed.

2️⃣ Business Level Strategy: Focuses on how each business unit competes within its market. It’s about positioning, differentiation, and building that all-important competitive edge.

3️⃣ Functional Level Strategy: Zooms into specific departments (marketing, finance, operations, HR). Here, the question is: How does each function contribute to the bigger goals?

4️⃣ Operational Level Strategy: Where the rubber meets the road. Team leaders and members execute the strategy daily, ensuring that vision turns into action.

Remember: A company’s success doesn’t depend only on having a great strategy, but on how aligned every level is in executing it.

As Henry Mintzberg wisely said,

“Strategy is a pattern in a stream of decisions.”

So as you step into this new week, ask yourself:
Is your team aligned across all four levels of strategy?
Are your daily actions reflecting your long-term vision?

"Track your finances by knowing your income, expenses, debt, and savings. Check your debt-to-income ratio and savings rate, and balance cash with investments. Small steps add up to big progress..

"Strategy and plan are not the same terms:

Strategy is a logic, and planning is a process.

Many people confuse these terms - Jeroen Kraaijenbrink has a great explanation of the differences.

The confusion around the concept of strategy largely arises from its misuse.

People often use the term "strategy" to describe something special, like "strategic marketing" or "strategic finance."

They also use it casually in everyday conversations to talk about their plans to achieve goals, such as "my strategy to get better grades is to study 10% more every day."

However, in business or organizations, strategy means something specific.

If every plan, approach, or process could be called a strategy, it would lead to confusion.

Here's the key difference:

→ Strategy is the logic behind how an organization creates and captures value, while planning is the process.

To put it differently:

→ Strategy defines goals, while planning helps achieve them.

A strategy delineates the rationale behind an organization's value creation and capture process.

In Jeroen's book, "The One-Hour Strategy," it is described that strategy encompasses:

a) The identification of target customers and competitors (Market),
b) The selection of products and services offered (Magic),
c) The utilization of assets and capabilities (Means),
d) The methods employed to generate revenues (Money),
e) The strategies for leveraging the environment (Momentum),
f) The underlying reasons for pursuing these actions (Meaning).

This can describe an organization's current strategy, intended strategy for the future, and realized strategy based on implementation.

None of this directly relates to a plan.

A plan details the steps, resources, and timeline needed to achieve specific goals. While a plan may be developed to implement a strategy, it's not the strategy itself.

Goals stem from the logic of the strategy and guide planned actions.

It's crucial because many organizations claim to have a strategy but lack the overarching logic behind value creation.

They may have plans and goals but lack the derived strategy.

Now, the key question is:

Does your organization truly have a strategy, or is it merely operating on plans?"

"Crafting a robust business strategy requires the right tools and frameworks to guide your decisions. PESTLE Analysis helps you stay ahead of external trends like political, economic, and social shifts. The Ansoff Matrix is your roadmap for growth, whether through market penetration, product development, or diversification. The Balanced Scorecard aligns your operations, finances, customer focus, and learning efforts with your vision. Finally, the McKinsey 7S Model ensures every element of your organisation—strategy, systems, structure, and more—works in harmony. These frameworks aren’t just theory; they’re practical tools to help you thrive in a competitive landscape."

Plan and strategy are two distinct terms:

Planning is a process, while strategy is logic.

Many people confuse these terms:

But let me explain the difference.

The confusion often arises from how we use the term "strategy".

Sometimes, we use "strategy" to refer to special concepts like "strategic finance" or "strategic marketing".

Other times, we casually mention our plans to achieve goals, like saying, "My strategy to improve my grades is to study 10% more every day".

However, in the context of business or organizations, strategy has a specific meaning.

If every plan or process were labeled as a strategy, things would become very confusing.

Here's the key difference:

- Strategy is the underlying logic behind how an organization creates and captures value.
- Planning is the method used to execute strategy.

Put simply:

- Strategy sets the goals, while planning helps to achieve them.

A strategy outlines the reasons behind an organization's actions.