As business leaders we’re constantly shaping and re-shaping our strategies. We have to pay attention to the developments around the world in order for our companies to succeed because our strategies are intertwined with market forces that affect consumers and demand.
Mark Pollard wrote a theoretical blog post on how to shape strategies. He says, “The great thing about strategy-in-shapes is it makes your thinking look very deliberate, impossibly official, and crazy to mess with.”
The concepts he plays with the most are:
First, bring together useful information about your brand, business objectives, products, competition, culture, and human behavior. Take a look at analytics, do keyword research and look for patterns, look at consumer reviews, and use qualitative research if available to you.
Pollard comes up with a few strategies based on the information he’s gathered. He says, “I tend to dig then sprint and let it all percolate…then repeat.” When putting strategies together he finds it useful to close the door and think, open it to share and debate, then close it to hone in.
To shape a strong strategy, embrace strong, visual language. Pollard suggests taking your three favorite strategies and rewriting them 10 times each. Keep making them shorter and stronger, easy to understand. Bring your ideas to your team and collaborate with them. They may be able to offer you even better ideas to help execute your strategy.
Pollard suggests taking the one or two strategies your team favors and writing stories around them. He says in the story, take someone on the journey you’ve just been on from the problem, to the twist, to the ‘what if we…?’, to the answer. This can help you put your thoughts together in a more direct way.
Set a clear direction for your company whether it’s cutting costs, expanding services, or improving infrastructure. If you have broad priorities, make clear guidelines your employees understand and can act upon.
According to this article on the HBR Blog Network by Donald Sull and Kathleen Eisenhardt, successful companies shape their high-level strategies by relying on simple rules of thumb.
In shaping strategies, Sull and Eisenhardt offer four simple rules to follow:
Sull poses three questions to break down complex strategies into actionable steps:
Sull says to translate corporate objectives into a few straightforward guidelines that help employees make on-the-spot decisions and adapt to constantly shifting environments, while keeping the big picture in mind. He also says, “For a strategy to influence action it must be remembered. To be remembered it must be understood. To be understood it must be simple.”
What techniques do you use to shape your strategy?
One of the toughest things about putting together a business plan is designing one to appeal to a broad spectrum of investors.
David Mielach, a staff writer for BusinessNewsDaily.com, compiled responses from experts on this key point: What questions should every business plan answer?
What’s the competitive advantage?
In looking at a business plan, Scott Locke, chair of the intellectual property development at Dorf and Nelson LLP, wants to know what gives the business “a competitive advantage relative to businesses that want to offer the same or similar good and services.”
In addition to an assessment of the competitive landscape, a strong business plan should also determine if there are any intellectual properties (patents, trademarks, copyrights, trade secrets) that might be “barriers to entry by competitors.”
Is it a growing company in a growth market?
According to Walter Recher, CEO of SmallBall Marketing, an effective business plan should describe “how the entrepreneurs will enter the market, apply their investment to prepare them to grow quickly, and participate in the expansion of an industry … with a better-than-average growth trajectory.”
In Recher’s experience, this single factor is the common denominator among both small businesses and hyper-growth companies.
How will you get customers to pay for your product?
Andi Gray, CEO of Strategy Leaders, asks entrepreneurs this simple question: “How do you plan to feed and clothe yourself, and where do you plan to sleep while you’re getting this venture off the ground?”
In other words, the business plan should articulate a strategy for getting customers “to engage at a fee and quantity” that enables the owners to sustain themselves as well as their business.
What’s the plan for staffing the business?
Every plan should include provisions for staffing the “production, sales and finance parts of the business,” says Larry Holfelder, CEO of Connect My Advisors. “Roles should be established for the entity as if it were mature and successful.”
Holfelder suggests assigning multiple roles at first and, as the business grows, filling those roles with the right people.
Including this information in the business plan shows that entrepreneurs recognize they can’t do everything themselves “and that business success revolves around collaboration and management.”
Is the product genuinely innovative?
“Innovative” can have many different meanings, but to Irwin Glenn, Managing Director of Profit Velocity, it means “a new twist on an already-existing technology or services delivered in a new and compelling way.”
A well-designed business plan must determine if the innovative idea can be protected against competition, and if the team can assemble “an excellent group that can’t be stopped from succeeding.”
How realistic are the plans and goals?
For Charles North, president and CEO of the Dutchess County Regional Chamber of Commerce, a business plan must be realistic, “not something that is pie in the sky.”
This doesn’t mean the idea must be reasonable, but the plan must be. Assumptions covering sales, expenses, and the bottom line also “have to be reasonable.”
The more questions your business plan answers, the greater interest you’ll generate among likely investors.
What questions does your business plan answer?
A company’s strategy is the game plan business owners and management use to position their organization in its chosen market area, to compete successfully, satisfy customers, and achieve good business performance.
Business leaders have to pay attention to the developments in the world because they are intertwined with market forces that affect consumers and demand. They have to adapt their business strategy to a constantly shifting environment.
Changes in strategy should be done when it’s clear achieving a strategic goal is either impossible or no longer desirable, says Geoffrey James, columnist for Inc.com.
He offers some characteristics every strategy should include.
People often get a strategy mixed up with a tactic. “Strategies define goals to be achieved while tactics define the actions you’ll take to achieve those goals,” says James.
For example, a strategy would be to double sales in a specific territory. A tactic would be to hire more salespeople in that territory to achieve their goal.
If your goals are vague, you won’t know if you are achieving them. “You can’t manage what you can’t measure,” says James.
When you set goals, also set ways you will measure them to be certain they are successful.
Goals such as achieving thought leadership won’t translate to solid numbers. However if your goal is to double sales revenue in a specific region, you will have data to back up whether it was a success or a failure.
Strategic goals are achievable through tactics. They are not dependent on forces you can’t control.
James says an actionable goal would be to double sales revenue versus increasing your publicly held stock price by 50 percent. Increasing your stock-price is contingent on the market.
Employees should understand exactly what their organization’s strategy is to achieve it successfully. A strategy requires continuous and clear communication. It should guide their decisions and actions.
“A strategy is just hot air unless there’s a tactical plan for achieving each strategic goal,” says James.
For example, if you want to increase sales by 50 percent in a specific region, your plan could include anything from investing in better lead generation methods to retraining employees to hiring new ones.
Strategies evolve as businesses evolve, but it’s important to know what does and doesn’t work. Once you know that, you can adjust your tactics and try new approaches.
A business strategy is an ongoing process, not something to set and forget. Strategic planning is key to looking to the future and creating direction to for a business to be successful. The key is to do what works best rather than trying to do everything.
What other characteristics do you think are critical in a business strategy?
