We can talk about success when specific business goals are achieved. When analyzing the results of leaders in each industry, we focus on what they have done. However, it is worth remembering that behind every success there is also an answer to the questions: why and how. It is the business strategy that is the plan, the recipe, the map that leads to the set goal. That is why it deserves special attention! Thanks to it, we can avoid disaster. What basic elements should a business strategy contain? We discuss this in the following article.
Business strategy
Let’s start with the basics, i.e., what a business strategy really is. In short, it defines goals and ways to achieve them. In practice, it often takes the form of a multi-page document that includes not only business goals, concepts, and tactics, but also extensive analyses leading to specific conclusions.
A business strategy contains key information about how a company operates, its direction of development, competitive advantages, customer requirements, trends, challenges, and threats. However, that is not all that we find in this document.
It can be said that a business strategy resolves serious dilemmas, allows you to define and prepare for serious challenges, and contains difficult, irreversible decisions. As a result, it is supposed to lead to the achievement of a specific business goal.
The foundations, walls, and roof of a business strategy
A business strategy is a specific, detailed action plan that protects a company from disaster, collapse, and failure. However, in order to fulfill this function, it must have solid foundations, sturdy walls, and a leak-proof roof. How can these be built so that they are transparent and specific for the entire team?
- The roof should be: the goal, mission, and values.
- The ceiling is formed by MWBs (Must-Win Battles) – battles that we must win in order to achieve our goal.
- The walls are formed by strategic initiatives that introduce specific changes and affect the overall picture, efficiency, and scope of activities – they define how to pursue the goal.
- Another element of the walls are strategic factors, i.e., the necessary elements in which we must have the appropriate competencies to achieve business goals, such as innovation in a given area or the development of specific technologies.
- Foundations, i.e., organizational culture, people, structure, processes.
1. Define your goal (not just your vision and mission)
The company’s vision and mission are undeniably important elements of the strategy, and they are where we should start. The same attention should be paid to business goals. It is around them that the strategy should focus and help to achieve them. Good tactics and initiatives that allow for the appropriate allocation of resources focus on goals.
One of the best methods for defining goals is SMART. This means that the goal must be:
- Specific – clearly defined and understandable to everyone,
- Measurable – there are specific indicators that allow progress to be monitored and the moment of achieving the goal to be determined,
- Achievable – possible to achieve in the current situation of the company,
- Relevant – its implementation has an impact on the company as a whole, its activities and scope, and is related to its vision and mission,
- Time-bound – a specific deadline by which it should be achieved.
2. Make difficult decisions
Business strategy should be about making decisions and choices. These relate to the field of activity and the definition of competitive advantages. Choices include, among others: customer segments, services/products offered, target markets, and even industries.
Competitive advantage can relate to: price, value delivered to the customer, or mode of operation, such as distribution channels.
Making difficult decisions involves a cascade of choices:
- What is our goal and aspirations?
- Where will we compete?
- How will we win the battle?
- What capabilities are necessary to win?
- What support systems are necessary?
3. Ensure a clear and convincing structure
A business strategy must have a simple and convincing structure that is understandable and logical not only to you, but also to the entire team. You should have no problem explaining its purpose. The strategic house mentioned above is one way to present a clear strategy.
At Louder&Higher, however, we focus on the One Page Strategy. Our approach is based on presenting a comprehensive plan on a single A4 page, making the strategy clear and easy to implement.
4. Avoid the trap of tactics
It should be emphasized that a chaotic set of good tactics cannot replace a good strategy. Before you start creating your document, you need to know the differences:
- A strategy is a long-term action plan that defines how to achieve business goals.
- Tactics involve short-term actions that lead to the achievement of specific goals. They are tools that enable the implementation of the strategy.
5. Remember that a strategy must be executable, i.e., specific!
The last element is to plan strategic initiatives in a schedule. Each stage of implementation should have smaller, realistic steps to be taken, responsibilities, deadlines, KPIs, budgets, and resource allocation assigned to it. At Louder&Higher, we create a comprehensive operational plan for our clients that covers all these elements. You receive a strategy from One Page Strategy and a dashboard to measure results. Importantly, we also provide supervision and support in optimizing activities at subsequent stages of implementation!
