A focus on strategy is often cited as one of the responsibilities separating leaders from managers. Yet defining strategy is as elusive as defining leadership. (See my pervious article “So What Is Leadership Anyway?” for a definition of leadership and an overview of all five leadership obligations.)

I just finished reading a discussion in the Harvard Business Review Linked-in Group. The initial post asked, “Can you define strategic thinking in one sentence?” A lot of people made a valiant effort. Most of the responses were the longest sentences I have ever read. Many were difficult for me to comprehend, and with a few exceptions they gave very little guidance on how to operationalize strategic thinking within an organization. (To be fair, that would be a tall order though for one sentence – even a very run-on sentence.) I would say the short answer to the initial question is a resounding NO! Strategic thinking simply cannot be adequately defined in one sentence.

So if you are a leader and one of your obligations is setting a strategic direction, what exactly do you need to do to fulfill this obligation?

Setting a strategic direction requires you to know where you want to go, why you want to go there and how you will get there. It requires you to take actions today with a clear view of where you want those actions to take you – the outcomes you desire in the future.

Step 1: Craft a Compelling Vision

A Vision is the image of where you want your business to be at some point – generally three to five years – in the future. It is what gives you and your team direction and keeps you going even in the face of barriers and set-backs. It guides decisions around the use of resources and helps you decide when to say yes and when to say no. Does a particular direction or focus bring you closer to your vision? If not say no.

To be effective, the vision has to be aligned with core beliefs and the values on which the business is built. It must have an emotional component – something that you and your team can be passionate about. The place to start in developing this passion is to answer the question “Why”. Why is it important to realize the vision? What impact will realizing the vision have on you, your team, your customers and your world? You can read more about crafting a compelling vision here.

Step 2: Identify a Strategy

Strategy answers the question “How”. How will you realize your vision? There are generally a number of alternative paths that you could take to get where you want to go and it is your job as the leader to guide your team in choosing that one path that is best suited to your company, your team, your business and your business environment.

In this step you choose one alternative and generally that choice eliminates the other options. It is usually not possible – or at least not advisable – to implement two strategies simultaneously. If you are taking a trip there are a number of different routes that you can choose to reach your destination. Once you pick one though it normally eliminates the feasibility of the other options. It is the same when you select a strategy for your business.

It is critical that your strategy supports your business in realizing the vision you have for the future and that it plays to your strengths as an organization as well as your values. I am currently working with a not-for-profit that has a vision of expanding services to empower a larger number of girls and young women to break the generational cycles of abuse and poverty. There are dozens of potential programs and services that would allow it to expand its impact within the scope of its mission. One of the key factors this organization must consider is its strengths and the areas where it has the greatest expertise – what programs or services fit not only with its mission and values, but also its core strengths.

Strategy – in a nutshell – is about picking the path you will take to realize your vision.

Step 3: Set Goals

Once you know your strategy it’s time to develop goals to serve as milestones on your journey to realizing your vision for your organization. Too often organizations start with goals without first crafting a vision and identifying a strategy. Without the vision to provide an answer to the question “why” and a strategy to guide the path you will travel, you and your team will likely lack the direction and drive to achieve your goals.

Step 4: Develop a Plan of Action

Finally, it is time to outline the specific action steps you will take to achieve your goals. If your goals are supporting the realization of your vision, every action you take toward accomplishing a goal will move you closer to your ultimate outcome.

In summary, setting a strategic direction involves crafting a compelling vision, identifying the path that you will take to realize the vision, setting goals that will allow you to measure progress towards your vision and identifying the specific action steps you need to take achieve your goals.