What Does “Strategic” Mean in Business?

Written by Angela Iobst

If you ask ten leaders what strategic means, you’ll likely hear ten different answers. This is why it’s critical to define strategic clearly before starting any strategy planning effort.

Some think it means long-term planning. Others think it means big decisions. Some use it as a synonym for important.

But in strategic planning, the word strategic has a very specific meaning — and misunderstanding it is one of the biggest reasons strategies fail.

Before organizations can set objectives, choose initiatives, or measure success, they must first define strategic clearly.

This article explains what “strategic” really means in business and how to recognize whether something is strategic — or just operational.

How to Define Strategic in Business

Strategic means making decisions that position the organization for long-term success.

That’s the short version.

A more complete definition:

Strategic: Decisions and actions that shape the long-term direction, competitive position, and future outcomes of an organization.

Tools like environmental scanning and PESTLE analysis in strategy planning help leaders make these long-term decisions.

Where are we going?
How will we win?
What must change to succeed long term?

If an activity does not influence the future direction of the organization, it is not strategic.

It may still be important — but it isn’t strategic.

Strategic vs. Important vs. Urgent

One of the most common mistakes in strategy planning is confusing strategic work with important work.

They are not the same.

Type	Focus	Time Horizon	Example
Urgent	Immediate problems	Today / this week	Fixing a system outage
Important	Necessary ongoing work	Short–mid term	Hiring staff
Strategic	Future positioning	Long term	Entering a new market

Many teams spend 90% of their time on urgent and important work and call it strategy.

But strategy is about changing the trajectory of the organization.

Strategic Work Shapes the Future

To define strategic clearly, think in terms of impact on the future.

Strategic work answers questions such as:

Will this change how we compete?
Will this change how we serve customers?
Will this change how we grow?
Will this change how we operate at scale?

If the answer is no, the work is likely operational.

Example

Operational decision:
Improve response time to customer emails.

Strategic decision:
Implement AI customer support to scale service as the company grows.

Both are valuable. Only one changes the future trajectory.

Strategic Thinking Happens at Multiple Levels

Strategy is not limited to executives or annual planning sessions.

Strategic thinking exists at three levels:

1. Organizational Strategy

The highest level of direction.

Examples:

Expanding into new markets
Changing the business model
Building a new product category

2. Department Strategy

How teams support the bigger picture.

Examples:

Marketing shifting to demand generation
HR building leadership pipelines
IT modernizing infrastructure

3. Individual Strategic Contribution

How roles support long-term direction.

Examples:

Building automation
Developing new capabilities
Creating scalable processes

When everyone understands what “strategic” means, alignment becomes possible.

The 3 Tests of Strategic Work

When teams struggle to define strategic priorities, these three tests help.

1. The Time Horizon Test

Strategic work impacts the organization months or years from now, not just today.

If the results disappear next week, it isn’t strategic.

2. The Direction Test

Strategic work changes the path of the organization.

Ask:

Does this move us toward our vision?
Does this change how we compete?

If it doesn’t shift direction, it’s operational.

3. The Trade-Off Test

Strategy always involves choosing what not to do.

If a decision requires prioritization and trade-offs, it’s likely strategic.

Operational work rarely forces hard choices.
Strategic work always does.

Why Organizations Fail to Define Strategic Work

Many organizations struggle with strategy because they never clearly define the term — a challenge frequently discussed in Harvard Business Review strategy insights.

This leads to common problems:

Everything becomes a priority

When everything is labeled strategic, nothing truly is.

Plans become task lists

Strategy turns into a long list of projects without clear direction.

Teams lose alignment

Departments move in different directions because the strategy lacks clarity.

This is why defining strategic thinking is one of the first steps in effective strategy planning.

Strategic vs. Tactical vs. Operational

These three terms are often used interchangeably — but they represent different layers of execution.

Level	Focus	Question Answered
Strategic	Direction	Where are we going?
Tactical	Approach	How will we get there?
Operational	Execution	What must we do today?

Example:

Strategic: Expand into healthcare market
Tactical: Build healthcare sales team
Operational: Make 50 outreach calls this week

All three matter. But they serve different purposes.

How to Use This Definition in Strategy Planning

When your team begins strategic planning, start with a simple exercise:

Ask of every idea:

Does this shape the future?
Does this change our direction?
Does this require trade-offs?

If the answer is no, move it to operations — not strategy.

This simple filter dramatically improves clarity.

Strategic Thinking Is About Choices

At its core, being strategic means choosing a future and committing to it.

It requires:

Focus
Trade-offs
Long-term thinking
Alignment

Without a shared definition of strategic, organizations drift into activity instead of direction.

And activity is not strategy.

Up Next in the Strategy Planning Series

Now that we’ve defined what “strategic” really means, the next step is understanding how strategy connects to execution.

Next article: What Is Strategy Execution and Why Does It Fail?