Defining Strategy

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Chris Hill is Fleet Management Advisor and EV Transit Specialist at Fleet Challenge. Photo Jack Kazmierski

In today’s business environment, the term is often misunderstood.

I have been working on “fleet strategy” since my first attempt at a fleet strategic plan early in my career when I managed a fleet of 300 cars for a national grocery product company. My view of the term “strategy” has evolved, but I see it misunderstood in many recent calls for proposals and tenders.

‘Strategy’ is part of everyday business language and is often used in the wrong context. Operational excellence is not a strategy, it’s a goal. In a book by A.G. Lafley and Roger Martin, strategy is deemed about making choices of where to play and how to win, supplemented with a ‘why’ (the objective) and the ‘how’ (doing it).

There are four elements to a strategy. The first is the situation—i.e.—what have we got now? The next is the objective, i.e.— what do we want? The third element is the strategy, i.e.—what is the most effective way to get it? The final element is the tactics, how will we do it?

History provides a lesson

Here is an example of a situation: it is December 8, 1941, and the U.S. naval station at Pearl Harbor in Hawaii has just been attacked by aircraft from the Imperial Japanese Navy, with massive casualties and destruction. The United States was not at war and had been trying to avoid a conflict with either Japan or its ally, Germany.

The objective (the why) for the United States was to ensure this would never happen again. It had tried strategies that failed, such as diplomacy to keep Japan’s forces away, and economic sanctions on oil that would prevent fuel from reaching Japan. The strategy chosen by the U.S. to reach its objective was war, declared by President Roosevelt on that day.

Multiple tactics were then undertaken to carry out the strategy successfully. Tactics are the ‘how’, those actions taken to make the strategy succeed. In a modern business organization, the tactics are usually grouped into five key management functions. These are Finance, Human Resources, Operations, Information Technology and Marketing. These functions may be headed by a senior C-suite executive, CFO, COO and so on.

The U.S. government’s response to the Japanese attack on Pearl Harbor is a good example of effective strategy (a declaration of war) and employing tactics (such as switching civilian vehicle production to military needs) to achieve a specific objective (the ending of hostilities). Photo US Air Force

Specific tasks

One of the tactics in the war strategy in Finance was to issue victory bonds to buy armaments. In Human Resources, the draft was expanded to enlist more soldiers, sailors and aviators, and more women were employed. In Operations, factories that produced civilian automobiles were ordered to switch to making military equipment. In Information Technology, rapid progress was made in developing radar and encryption. And in Marketing, the vast talent in Hollywood was there to support the war effort.

The tactics above are often called strategies. This is a mistake in my view, and efforts to effectively manage anything using multiple strategies do not tend to turn out well.

In fleet, as in many other business activities, there are very few strategies to choose from. There are a multitude of tactics, as the U.S. chose to win the war, but it stayed with one strategy.

The strategies to manage a fleet include (1) doing it as an internal business function, (2) outsourcing it to another entity, or (3) letting the users do it themselves to suit their needs.

Skills and knowledge

The first is called ‘focus and manage’ and depends on having the skills and knowledge in one or several employees to find the tactics to do the job. Some fleets create a hybrid strategy by outsourcing fuel and maintenance instead of creating internal resources.

Outsourcing to fleet management companies has been widely used for decades. A key product of many FMCs is data management. Most organizations for whom fleet operation is not critical to the central business function do not invest in internal data resources for fleet management, which can be obtained more efficiently from other businesses.

The third strategy, having no central function for fleet management has been observed in businesses that grow through acquisitions and in public services that have multiple departments and agencies.

Making strategy work is a reward. Knowing the difference between strategy and tactics is key to success.



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