Create a Sound Business Strategy

Strategy is an overused term these days and the foresight in most cases is limited. When confronted with revenue growth, most companies focus on expansion into new geographic markets. Heard the age-old saying “numbers don’t lie”? A look into the financial model would reveal the impact of such decisions and the growth metrics the company would gain, rather than just relying on instincts.

One mistake most business CEOs and startups in particular make is to utilize off-the-shelf strategic templates in a bid to realize quick results, as they are usually time-starved and stressed. But the results are usually disappointing as the outcomes are short-sighted and usually tactical rather than strategic in nature. Below is a step-by-step method of developing a business strategy.

1. Define and embody your true north

This is termed a BHAG (Big Hairy Audacious Goal) or your grand vision or purpose. Term it however you like, but it is what your business is set out to do and the reason why it exists. The true north should consider what success means to the company, its customers and the environment that includes market and economy.

2. Define your USP

Your strategy has to take into account your customer and how you deliver value that is unique from other competitors in the marketplace. You don’t want to be swimming in a red ocean. Your strategy should look into how you can differentiate yourself in terms of service quality, delivery models, pricing, or product innovation.

3. Be specific about your target audience

Without understanding your customer and defining the right target audience, the chances are you are going to shoot in the dark or spread yourself too thin to see any tangible results. Defining the audience and focus area helps channel your resources and energies on delivering true value. By defining your revenue operations and integrating sales and marketing, you increase your chances of success.

4. Monitor for growth

If your growth trend is a flat line or worse, declining, you have to be really worried. Growth is essential to be able to invest into people, processes and technology. Growth can be defined in terms of revenue, technology innovation, or R&D — the area of focus depends on the nature of your business and which area delivers the goals you’ve set.

5. Data! Data! Data — use it for decisions

Do you use your gut alone to make decisions, or couple it with data? Your strategy is as good as the data you use to make decisions. Tracking data and knowing what data is important to monitor is critical to understanding your business and steering it in the right direction. Business dashboards and visualization tools can help you take informed decisions.

6. Don’t underestimate the long term

We usually overestimate the results that can be achieved in the short term and underestimate what we can achieve in the long term. Consider the risks involved from political, economic, social, technological, legal and health perspectives and plan mitigation into your strategies. Great companies treat strategy as an annual exercise — long-term, yet evaluated and tweaked periodically.

7. Pick your strategy team and invest time

If you want your managers to take strategy seriously, make them do their own research and prepare relevant information in advance of your strategy meetings.

8. Evaluate performance periodically

A strategy is only good if it is executed well. Review and track the strategic plan monthly or quarterly, with key executives taking ownership. Use KPIs to track progress and forecast with leading metrics. Ensure the goals reach all departments so every person in your organization can relate to them and see how they contribute. Strategy may start at the top, but it needs to encompass the entire organization.

Enjoyed this? Let’s talk about what it means for your business.