Before you even start thinking about developing a strategic plan, make sure you have your realism hat firmly on. Far too often, businesspeople allow themselves to drift into fantasy when working on their strategies. In fact, people often confuse strategic thinking with dreaming. The right way to do it is to be brutally realistic.
Can your ideas be implemented within the scope of where your business sits right now? If you’re confident that the answer is “yes”, move forward. If you’re not so sure, take a step back and ask yourself if you’re actually dreaming. If so, shake off the dream and start again. You need to be practical and that means thinking about what can be done today or at least in the immediate future. We’re talking at least in the next 3-6-12 months.
Once you have your head in the right place, follow this 8-step process. It can be completed quickly, but there’s nothing wrong with taking your time either.
A strategy must be defined by the end goal. If you don’t have an end goal in mind, and a very clear one at that, there is little point in developing a strategy. And no, “growth” is not good enough. You need to understand exactly what your shareholders want to get out of the business, and when they want to get it. If you are the only shareholder, no problem. Go back to Stage 1 and think about the exercises on personal purpose and personal vision. This will help you to define shareholder aspirations.
WITHOUT THE RIGHT CULTURE AND VALUES in place within your business (clearly understood by all staff), the best strategic thinking will have nowhere to go and nothing to do.
Values (whether acted out, without thought, within the company or clearly written down and communicated) define the way the business operates in the market. This is a fact, so it makes sense to face up to the challenge and get active when it comes to ensuring that you understand your values clearly, and that everyone involved with your company does too.
Defining core values means making very clear the principles and work philosophies by which the company will operate. It clarifies how the operation chooses to do business, and how it relates to customers and business partners. These core values will be the foundation of the company’s culture, which we will discuss in detail in Stage 4.
TOO OFTEN, WE DEFINE OUR BUSINESS ACCORDING TO the product or service we sell. When planning growth, this narrow focus can lead you to becoming too inward looking. What you really want is to be thinking in terms of what your customer needs. Strong businesses resolve needs for their customers. They also explore new opportunities to satisfy these needs, possibly in new ways.
The company’s core purpose is the reason you exist as a business. Core purpose is a constant. It is unchanging over the company’s existence and guides its direction – as opposed to its profits.
Core purpose is the primary reason you’re in business. It goes beyond defining your business around the product or service. It includes acknowledgement of:
– the kind of business you are in;
– the sustainable value proposition you provide; and
– your flexibility in fulfilling customer needs and staying competitive.
EXAMPLES OF CORE PURPOSE STATEMENTS:
1. Apple – “To make a contribution to the world by making tools for the mind that advance humankind.”
2. Google – “To organize the world’s information and make it universally accessible and useful.”
3. Nintendo – “To put smiles on the faces of everyone we touch.”
4. Avon – “Avon is a company that stands for beauty, innovation, optimism and, above all, for women.”
5. Nike – “To bring inspiration and innovation to every athlete in the world. (And if you have a body, you are an athlete).”
SIMON SINEK IS AN AUTHOR AND SPEAKER who writes and thinks about leadership and business management. He has developed an insightful concept called Start With Why, which has resonated throughout the business world.
You can view a quick video summary of the concept by Sinek within the accompanying online course, and you can visit the website he runs by going to: www.startwithwhy.com
Sinek’s concept is simple. Perhaps that’s what makes it so powerful. He starts by identifying the three core aspects of business:
Sinek says that most businesses are strong in the areas of ‘How’ and ‘What’, but that they often fail in the area of ‘Why’. This is a pretty serious failing, because ‘Why’ should sit at the strategic and operational heart of a strong business. Strong businesses, according to Sinek, have a simple Golden Circle structure, as per the graphic on this page. If there is weakness (or, indeed, a complete absence) in the core of the Golden Circle, the business is poorly positioned against rivals that have strength in the core.
A STRATEGIC VISION:
CREATE A STRATEGIC VISION IN THREE STEPS
Speak with business partners, key managers and employees before and throughout the strategy development process. Their feedback will be very valuable and they almost always value getting involved.
If you’re not sure where to start, simply ask them to describe where they would like to see the company in 3 to 5 years’ time and then ask them specific questions about what they describe.
Once you have sourced as much information as possible, start a new document and write out your strategic vision in a few sentences. Remember that sourcing information isn’t a quick process. If you aren’t spending a week or two on it, you’re not being thorough enough.
Don’t bother, at this stage, with spelling or grammar. The idea here is to get the essence of it down. Rather write too much than too little.
The rules:
Take a break. Give yourself a few days off. Focus on something else. When you return to the document, save it as a new version and edit it down to 1 to 2 sentences that clearly describe the future vision of your company.
This is the statement that you will share mainly with all the people who work in your company, so it needs to be great!
Example: “To be a $10 million turnover company by 2022, with a gross margin of 55%, and a net margin of 15%.”
S.M.A.R.T. STRATEGIC VISION
WHERE DO YOU WANT YOUR BUSINESS TO BE in 3 to 5 years’ time? What measurable objectives are put in place to realize this? Think SMART:
S – Specific
M – Measurable
A – Attainable
R – Relevant
T – Time-based
HAVING GONE THROUGH THE FIRST FIVE STEPS, you should
now be able to consider two very important things:
1. The market opportunity and/or need; and
2. The company’s competitive edge and advantage points.
You already know what your goals are. Now you need to decide on a strategy to get you there.
Be careful, however, not to confuse strategy and tactics.
Strategy = what you are going to do.
Tactics = how you are going to do it.
For example: ACME Toothpick’s strategy could be to move into the hipster market by targeting coffee shops in gentrified city spaces that feature strong art, craft and coffee offerings. The tactics it might use to achieve this could include proposing cocktail event partnerships with popular art galleries in large cities.
THIS STEP WILL HELP YOU TO define what the company needs to do in order to turn theory into reality.
In most cases, and especially in small and medium-sized businesses, even though the staff who currently work for you are skilled and capable, they will not be sufficient to implement your strategy over the next three to five years.
You might need to consider – and provide for – the roles and resources that you will require to implement your strategy.
To do this, you need to develop an organization chart of your future business. This chart will help you to see what your business will need to look like, from an organizational and human resources perspective, as you move closer to your goal. It will also help you to see what will be required to carry out the activities you have planned.
Remember, your organization chart should not represent people, or even include names. It should focus on the various roles within your company.
MAKING ORGANIZATION CHARTS CAN BE A PAIN
SO WHY NOT USE THE INTERNET?
organimi.com offers a nifty free tool that helps you to create an organization chart without too much effort. Give it a try. If it’s not for you, remember that Microsoft PowerPoint is always your friend when it comes to creating images with lots of boxes and lines.
CREATE JOB DESCRIPTIONS FOR EACH POSITION – THAT YOU CAN MEASURE AND TRACK!
Using your organization chart as a reference point (including current and future positions that still need to be filled), define job descriptions for each position within your company.
Your goal is to create job descriptions according to what the people in those particular roles (including you) should be doing in order to steer the company towards its daily and monthly goals and ultimately to meeting its strategic target. The bottom line when you’re doing this is measurement. You must create job descriptions that are clear enough to allow you to assess whether each individual is fulfilling the requirements of the position or not. If there is any room for interpretation in your job description, you need to keep working at it until it is crystal clear to anyone who reads it.
A STRATEGY WITH NO SPECIFIC ACTION POINTS IS of no use to anyone. You need to finalize a list of vital steps that must
be taken to realize the company strategy.
These steps are the next specific activities that speak to completing your business strategy document as well as to enabling the roll-out of the company strategy. And they should keep a strong eye on the use of the company’s resources (human resources and financial resources), as well as the motivational tools that will be required to keep the team focused on achieving its objectives.
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