Knowing the Difference Between Strategy and Tactics

I recently saw a college friend playing chess versus a computer. It was only set to easy mode, but the computer beat him three times in a row. He said this was because the computer could compute more moves than any human can. This was true, but I have an ace up my sleeve that he does not understand.

Being far more proficient in chess than my friend, I asked if I could try to defeat the computer. He was sceptical to say the least, but knowing how good I am at the game, he increased the difficulty level to the maximum. Nevertheless, I won each of three games.

How did this happen? I applied strategic thinking. I was able to visualize potential positions that were 20 or even 40 moves ahead, and then I devised a strategy to reach those goals. No computer could compute every single possible move that far away ahead and neither could I. But it was not necessary to compute every move, you just have to have an objective based on a deep understanding of how things will probably evolve and then have a feasible plan to accomplish this.

Being able to picture a future situation enabled me to play opening moves that seem to make no sense except for my foresight that it will bring me to an advantageous endgame. Fortunately for me, the portable computer we were using was not programmed to do strategy. Now there are computers that could do this, such that they are able to defeat even world champions. At present (as far as I know) though, even computers could not strategize regarding business matters because the possibilities and variables in business are much greater than in chess.

In business, there has been a great deal of debate about the difference between strategy and tactics, and on which of them is superior. Knowing how they are different allows us to understand them more. However, neither of them is superior to the other—while the higher up you are in management, the more you are involved with strategy, tactics are indispensable, too.

To shed some light into the differences and nature of strategy and tactics, here are some key points to ponder:

Both need careful planning. Some people think that strategy is about planning and tactics is about implementation, but this is not totally true. While tactics may be the ways of implementing your strategy, you must also plan your tactics meticulously. This is not just a matter of semantics. Tactics are more prone to be done haphazardly. Often, a correct strategy is derailed by poorly planned execution of the tactics.

Tactics may become a strategy and strategies may be considered tactics. What is usually considered a tactic may be used as a strategy. The most common example cited is the case of Domino’s pizza. They turned fast delivery, which usually is a tactic, into their main strategy. Virtually all aspects of their operation were geared towards supporting fast delivery. In the case of retailing, having a sale to liquidate slow moving items is considered as a tactical move. But if the store decides to be an everyday bargain seller, it is a strategy. It may also be that a certain business strategy is considered only a tactic when the resources of the company are so vast that it is only an insignificant experiment. A giant conglomerate may set up a multimillion peso factory for a non-core product and treat it as just a negotiating tactic to pressure their supplier for more price concessions.

Strategic decisions are usually costly and sometimes impossible to reverse. In retail stores, location spotting is a strategic decision because it would be enormously expensive to change sites if you blunder in choosing a location. If you have limited capital, it may mean bankruptcy. But in the case of chain stores, the location of a single branch may not be strategic. They may be testing if they could do well in a different type of location. Losing their investment in one location may be immaterial if they have hundreds of branches.

Strategies are long-term plans. Generally, a tactic is for a short term only, while a strategy is for a longer period. Most strategies take years to accomplish their objectives, while in the case of tactics, the result can often be assessed within months or sooner. You must note, however, that in certain fast-paced fields like high technology, a strategy may have a life cycle of only a year or less. There are no hard rules on this as much as it depends on the rate of change in your industry.

While strategy is done before tactics, the viability of the tactics affects the feasibility of a strategy. This is probably the main reason why many intelligent executives fail to come up with a suitable strategy. They are out of touch with the realities faced by those who implement their plans. One of the most common examples of this is when there is a new trend. A printing press’ management may decide on a strategy of focusing on printing books when the sales force have already detected a shift towards computerized ways of reading that may drastically reduce the demand for books. Management must strive to get critical fresh information as soon as possible to improve their strategy.

Strategies and tactics are both essential in planning and there is no sense choosing one as more important than the other. To plan correctly, you must understand and do both equally carefully. In business, unlike chess, even the tactics are infinite in variety and also beyond the powers of a computer. Therefore, knowledge of the difference between strategy and tactics should serve to enable us to use both properly and not to make claims that one is superior over the other.

*Originally published by the Manila Bulletin. C-4, Sunday, September 30, 2012. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.