In a world where CEOs are overcaffeinated, stressed, and time-starved, many have actually been romanced by user-friendly strategic templates that yield a quick-and-dirty business strategy. However, downloading a template tends to promote short-sighted thinking and poorly carried out strategies. The outcome is frequently something closer to a short-term functional plan than a true strategy.
Their list is void of any market research, analysis, and business intelligence. When their ill-conceived strategies fail, they blame the strategy.
Developing a business strategy in 10 steps
It doesn’t need to be that way. Here are 10 steps you can take to develop the best business strategies and execute them with accuracy:
1. Establish a true vision.
Vision is an abstract word that means different things to different individuals. Classically, a vision or vision statement is a snapshot into the future. It must include goals of what kind of business you want to be, and, unlike a mission statement, articulates what success appears like in clear terms (consumers, markets, volume, etc.).
2. Specify competitive advantage.
The essence of strategy is determining how a company can deliver special worth to its clients. In many sectors of the economy, businesses are stuck in a sea of sameness. A well-thought-out company strategy must consider how a business can create space from competition in its service offering, prices model, delivery system, and more.
3. Define your targets.
One of the most significant barriers to growth is poor targeting. In the lack of really particular targets, companies struggle with unclear messaging and thus misalignment between sales and marketing. Specifying specific niches and specialization allows companies to focus resources (naturally, some businesses are generalists by design).
Clear target markets give a company the capability to develop an integrated sales and marketing approach, where marketing allows sales productivity. When targets are tight, sales and marketing strategies are performed more successfully.
4. Concentrate on systematic growth.
As one of our customers would say, “A prospering business is a growing business.” It is just through growth that businesses can afford to invest in things like technology, the best people, and new devices. The strategic plan should recognize in which sectors a business will grow and in what percentage, so that the product mix yields a particular net margin result.
Only after concerning such conclusions might a company know how much it can afford in regards to Capex, overhead expenses, and so on.
5. Make fact-based decisions.
Strategy is a garbage in, garbage out exercise. Executives typically grumble about an absence of good data, but we regularly find info that is useful in the development of strategies.
An example is a client who was trying to quantify the worth of numerous markets served. By accessing the public records of a close-by port, they were able to measure actual shipments of merchandise by potential customers.
6. Believe long-lasting.
In the face of consistent change, planning horizons are shorter than they were before. Nevertheless, just believing quarter to quarter is a trap that might rob companies of their ability to see around the bend. Best-in-class companies create procedures developed to deal with strategy as an annual cycle rather than a one-time, static occasion.
7. But, be agile
Businesses can believe long-term and still be nimble. For example, an important component of the strategy is an external forces analysis. Businesses must be examining long-term external forces and adjusting based upon brand-new details (industry-specific discussions should be done regularly-perhaps quarterly) to pivot.
Jeff Bezos of Amazon holds a strategy meeting every Tuesday to keep it front and center with his management team.
8. Be inclusive.
To be nimble, businesses are including more diverse individuals in their strategy than in the past. At a time when companies are hiring more millennial staff members, there is higher transparency. While I am never one to promote that business open their books (as that is a personal decision for the business owner), there is definitely a noticeable change toward more inclusion and openness.
Choosing who to include in strategy development is an important selection. We suggest business owners add people they can trust and that can think strategically.
9. Invest time in pre-work.
Make managers perform research studies and prepare pertinent details in advance of your strategy meetings if you want them to take strategy seriously.
10. Track and measure your outcomes and execute excellently.
Every strategy must be actionable. Companies that are best-in-class:
- Have a strategic action plan that they track frequently (generally monthly).
- Promote common ownership of the strategy across executives and departments.
- Utilize key performance indicators (KPIs) that are predictive and line up directly with the strategic plan.
- Have cascading objectives that reach every department and resonate with workers so they comprehend how their function contributes to the greater good.
- Establish their business calendar to promote productive meetings, and develop a performance management cycle that supports cascading goals and objectives to every worker.
- Rinse and repeat their strategy cycle every year.
The execution of strategic planning needs discipline, and it is the obligation of senior executives to promote processes that keep a team focused on the prize.