Objectives, Strategies, and Tactics: Conflation and Obfuscation

Can a company embark on a cost-cutting strategy?  Is saving $10 million a proper objective?  In the trade press and in conversation with business associates, references are often made regarding things going on in these businesses.  In the strictest English usage sense, objectives, strategies, and tactics are very different things.  Some may argue that conflating these terms isn't really that big of an issue, so don't worry about it.  Perhaps the biggest offenders are those who sell services and are making their offerings sound more important.  A search on Google search for "Strategic cost-cutting" yielded 1,590,000 hits, offering such things as "A strategic approach to cost management can help you weather short-term economic hardship..."

Not that this kind of approach is bad, nor is it without value.  A strategic approach to cost management can mean that cost cuts will be done so the objective of the business is sustained.  If the board of directors is looking for 10% in cost savings, then the hope is that those savings will be achieved with the least impact to the organization's business objectives.  One would be a poor business manager if they took a different approach.

There's Objectives, and Then There's Objectives
So the first observation is that objectives can take on any form, but a cost-cutting objective is different than a market share objective.  Companies necessarily establish cost-cutting objectives, but they re more of a reaction to some external condition rather than something that will grow the business.  The CEO and Board of Directors may mandate cost-cutting objectives, but they in no way should be conflated with more important objectives related to business growth, product strategy, and similar areas.

Strategies are the plans that help achieve objectives.  A cost-cutting objective may be achieved by a diagnostic and re-design of certain business processes, and then driving decisions based on that redesign.  Tactics may include commissioning the diagnostic, evaluating the results, identifying the areas for redundancies, and re-evaluating the effects once fully implemented.

Why Not Skip the Strategy?
One thing that has become prevalent recently is mass layoffs - cutting hundreds or thousands of employees across the enterprise.  Is this the result of a well-thought out strategy, or is it a reactive approach to changes in the business?  Companies tend to obfuscate their strategy if it exists, so it is difficult to determine.  Given the recurring nature and the seemingly haphazard way these things are done, it is difficult to discern a strategy.

Strategy is the linchpin among these three phases of achieving the strategic intent of the business.  If a company has a 10% cost reduction objective, but once the strategy is formulated management determines that the objective cannot be achieved without damage to the business, then either the objective changes or the constraints on the strategy are removed.

Right Terms, Right Thinking, Right Execution
If you've made it to this point in the posting, perhaps you've run across the same situation regarding objectives, strategies, and tactics.  Businesses must be crystal clear about what they're doing, their plans, and how they will achieve those plans if the business is to prosper.  Executing tactics in absence of a strategy will lead to poor overall execution as measured by achievement of the business' strategic intent.  Going through the each of these phases will lead to superior business results.