Everything you need to know before you start work on your business strategy
If you want to make sure your next business strategy is more than just a paper exercise to secure investment, then certain things need to be in place.
You first need to understand who your stakeholders are and what they really want from your company. Once you know this you will have a clear picture of your future and can look at what needs to be done to deliver it.
If you have never thought about a business strategy before, now is a great time to start!
Why you need a Business Strategy?
1. Meet stakeholder needs
You need to deliver for all your stakeholders, in particular your customers – what do they want? Fail this and you may be out of business before you finish implementing your plan. Other important stakeholders to consider are your shareholders, this may be you? Get this wrong and you may take off in the wrong direction, wasting time, money and effort.
2. Give direction and focus
There are so many opportunities out there you need to ensure you are taking the right opportunities that will deliver for your stakeholders. A good strategy will give a foundation for effective decision making. The last thing you want is a hardworking team who are motivated and trustworthy but with no direction.
3. Identify future value
Get clear on what will drive real value in the future for your stakeholders, and gain consensus from your team on these numbers. You can then focus on the activities that make a step change. These activities are often difficult or uncomfortable and without a strategy, it is easy to drop the ball or simply avoid these.
4. Save time, money and effort
Taking the time upfront to get the right plans in place to deliver your strategy will save you a great deal of time, money and effort in the long run. Fail to do this and you will find yourself going around in circles and your team wasting money on pointless activities.
5. Accelerate progress
With your strategy in place, it gets your team on the same page. This enables them to accelerate progress in new products, markets or customer groups for example. Without a strategy in place your team will have little drive to move them in new directions, silo working will remain, and you will end up with more of the same or worse.
Business Strategy Models, Frameworks and Tools
There are a whole host of strategy models, frameworks and tools out there to choose from. These include balanced scorecard, Hoshin Planning, PEST, Gap Planning, the Baldridge Framework and the Concord System, to name a few.
The key things to look for in a good strategy tool are: that it starts with a focus on stakeholders and their needs, it uses planning backwards to reduce effort and cost, it has a finance element that gets agreement, and a way of effectively engaging your team. For more details on our planning method that meets all these points click here.
How to write a Business Strategy
The steps outlined below reflect a general consensus from business strategy experts around the globe – most get this right. What is critical though, is understanding why you are doing each step, how to do each step, and the order in which you carry them out – few get this right.
It is all too easy to jump to tactics and offer solutions with no idea where you are going.
Step 1 – Mission
The first thing you put in place is your mission statement – why you exist, your purpose. This gives context to everything you and your people do. As the leader of the company, this is what you should be driving home at every opportunity.
This is the key message all your team need to hear that will inspire and motivate them.
Step 2 – Core Values
Your core values come from two places and direct everything else within your strategy. First, they are about your values as a company. In many SMEs, this comes from the business owner who set up the company all those years ago. This relates to how everyone in the company works, their attitude and work ethic for example.
Your core values will give context to everything within your strategy, guide your decision making and act as an ethical compass.
Second, it is about gaining clarity on who your stakeholders are and what they want. Get clear on who your stakeholders are, and for each get under the surface to find out what your stakeholders really want.
Step 3 – Vision
This is about what your company future looks like – the goals you want to achieve that will deliver on your stakeholder wants and needs. It is not a number target, but a tangible description of your company future that your people can relate to.
These goals describing your desired future must be binary, either they have happened or they have not. They should be detailed enough so that everyone understands exactly what they are working towards. Examples may be things like managers replaced by directors, your first office in a new territory or business growth coming from customer referrals.
As a result of delivering this future, there will be a cash benefit. New better qualified staff will deliver greater efficiencies, new territories will result in new revenues and customer referrals will lower acquisition costs.
To ensure goals are delivered and cash benefit realised, you, the CEO, should walk the floor day to day, and make sure your people know you are looking to see this.
Step 4 – Strategy
Starting from your end goals and working backwards you should identify the tipping points that will deliver your goals. These tipping points, as described by Malcolm Gladwell, “create unstoppable momentum”. By working backwards you will identify the fewest number of tipping points required to deliver your goals.
Put names and dates on all the tipping points in your plan. Get your management team and others to step up and take a lead on areas they are strong in. Pull on their expertise to come up with better tipping points.
Your tipping points should be written to focus on the outcomes you are trying to achieve. This ensures everyone’s time is spent focusing on achieving outcomes, rather than simply being busy on activities that may or may not deliver.
Step 5 – Tactics
Under each of your tipping points write an action plan detailing the solutions and tasks that may knock over those tipping points. Prioritise this list. Take care there is not an explosion of detail here, keep everyone focused on the outcomes you are looking to achieve.
Display your plan as a one page strategic plan and connect the tipping points to the end goals other tipping points where there are obvious connections. So often in strategic planning things are connected and offer a big opportunity to accelerate progress.
Engage your team to risk assess your one page strategic plan. Ask them to identify any tipping points that may be a risk of delivering your plan on time. Where this is the case find alternative tipping points and reroute your plan, or identify action to overcome the block and remove the risk.
Types of Business Strategy
If you look around the internet you will find many articles and blogs on different types of business strategy such as cost leadership, differentiation, acquisition and others.
We would strongly advise against these types of strategies because they are solution focused instead of outcome focused. So often solutions do not deliver the outcomes you are looking for and simply drain budgets and waste time.
Instead, we recommend you use the planning backwards process. This starts with getting clarity on what all your stakeholders want, in tangible terms, and planning backwards from these end goals. In doing so it focuses you on the outcomes you need to achieve and focuses your team on the right activities to deliver them.
Free Business Strategy Template
This business strategy template will show you what steps to take and the order to take them to successfully design and deliver your future.
Whether you are new to business strategy or an experienced CEO, everyone can benefit from a structured approach to business strategy planning.
Download your free business strategy template today to see the steps you need to take for business success.