There are many reasons Why a Strategy is critical to sustainable business growth, but often SMEs avoid the question because they are not fully confident of the How to develop a Strategy! Procrastination centres around Where do I start? Should I first establish my BHAGs (Big Hairy Audacious Goals) or 2-3 year Operational Plans & what about Core Values, Purpose etc. Many a time SMEs believe strategy is not for them, it’s a big business thing. But this is simply not the case if the SME wishes to be the Amazon of tomorrow.
The reality is, there is no fixed way. Do it your way but use a sensible methodical approach & get some help. If you were planning a holiday, would you just drive in the direction your car is pointing? No! You would have the end in mind & plan accordingly with time constraints & risk factors assessed (some research may take place i.e. a lot more traffic on a bank holiday!) with contingency to make sure you arrive at your holiday destination.
One would continually assess the situation as you are executing your plan & one may need to adjust as required. Also, there are multiple routes & modes of transport to choose from to arrive at your end destination. What are your preferences & why? Then there are the roles, who will drive, navigate, load the luggage, keep passports or tickets. This is just the same for developing a business strategy, its simply a plan for arriving at your end destination. Achieving your business objectives, who will do the work, how will you do the work, what does success look like & how is it going to be a wonderful experience for your team & your clients. A strategy is simply a plan, so everyone is pulling in the same direction.
So now we know that we have a little appreciation of how to develop a strategy & it’s not that complicated, lets get back to Why a Strategy.
This varies based on the age of the company & the immediate needs, challenges & opportunities it faces. However common themes run through Why a Strategy as follows,
- Your Purpose
- Company Values
- The long term BHAGs (Big Hairy Audacious Goals) (Beyond 7 years)
- Bite Size Objectives
- Incremental Departmental Plans (2 year plan)
The Business Strategy helps your whole company understand your purpose, the values that drive the company, where we are collectively going for the long term, the bite size objectives we should focus on for the short term & the departmental plans so that we know who is responsible for the body of work we need to do to be successful & as a result of a strategy the whole company is aligned behind the same picture of success.
So, elaborating further on Why a Strategy, the wins for the whole company are:
- Your Purpose – this is the why we do what we do. The work may change through the years, but why we do what we do should last for until at least the BHAGs are achieved. The purpose captures the soul of the company it is lasting & seldom changes.
- Company Values – are part of the company’s foundation, represent those things that are best about our culture, & should reflect the personality of the company. Once again, they are lasting & seldom change. The most successful companies take all activity in respect of their company values including how we do the work, decision making, recruitment & positive behaviours to build a great company.
- The long term BHAGs (Big Hairy Audacious Goals) – Where do you want the company to be in 10 years? This is your Moon Landing. This compelling Vision can help attract & retain the right people & motivate them to work toward your long-term goals that are aligned with everyone’s united values.
- Bite Size Objectives – Are we on track? Objectives should be measured in a way that makes sense for all. Key Performance Indicators (KPIs) guide the people & teams within the business. When teams achieve their objectives, it’s an opportunity to share & celebrate the success with the whole company & thus reward their achievements.
- Incremental Departmental Plans – Each department setting their 2-year plans to meet the above Bite Size Objectives helps your organisation make progress to accomplish the BHAGs. Incremental plans allow progress towards the longer term goals. Breaking the plan into manageable pieces for each department supports the focus necessary to accomplish the company goals.
Across the company’s departments the following critical activity will be captured in the Incremental Departmental Plans,
- Identification & assessment of the opportunity
- Clear, long-term objectives
- Develop the company’s competitive advantage
- Constructive planning across all departments
- Clear customer value proposition
- Competitor analysis
- Positive cash flow
- Strong marketing
- Innovation pipeline
- Value from economies of scale
- Route & time to market
- Test & measure
- Risks Analysis & Contingencies
- Manage stakeholders
- Execute change
We all wish to achieve success. Furthermore, success is contagious. So, if you want your company’s chances of success being dramatically increased to outperform your competitors, you may wish to develop & execute a business strategy for business growth. After all, your holiday destination is not always in the direction in which your car is pointing!