Knowledge, knowledge, knowledge – and awareness once again. I have a company that designs CRM systems for businesses. I am an entrepreneur. I wanted to be a conscious entrepreneur. I asked questions. I did not get satisfactory answers. My company came to a standstill. Everyone was doing “something” and doing it well. However, the most important thing was still missing – results. What was at the root of this problem? Each of us knew what we were doing, but why and how was shrouded in mystery. So I took the reins. I felt the wind in my sails and set out in search of answers. Then, 10 tests that a good company strategy must pass appeared on the horizon. And I asked myself the key question… Do we even have a strategy?
A good company strategy is not created for its own sake
Quality. This is one of the values I wanted to provide to my clients. Not a day goes by without me saying this word to my team or business partner. However, I opened Pandora’s box by asking: what are we doing, why are we doing it, how are we doing it, and what makes us stand out? I knew. They didn’t quite. Another question arose: how is this possible, since I remember that, in my opinion, a good company strategy was created. A comprehensive document in which everything is explained.
I set out in search of my Holy Grail – a document that contained the answers and guaranteed results. I won this uneven battle with the document database. I found it. I opened it. I didn’t find the answers to the key questions on the first 30 pages. After all, it was a good strategy for the company – my company.
I want to do it better. I want to do it consciously
I assure my clients that nothing is more important than quality. Meanwhile, it is lacking in the foundations of my company. Frustration. Anger. Powerlessness. I know the industry. I know the competition. I know what I want to achieve. I have a qualified team. I have no results. I am looking for answers and guidance. I come across 10 key questions, the answer to which should be: Yes. A good company strategy should lead to a golden button with a big sign saying SUCCESS. Meanwhile, mine has failed the test.
1. Will it allow me to stay ahead of the market?
For a business to be successful, I have to do something better, differently, or cheaper. One of these words holds the key to staying ahead of the market. My company introduces proprietary solutions that enable AI-based automation. This is slowly becoming the standard rather than a distinguishing feature. In order to identify the brand’s advantage, it is necessary to re-analyze the business environment and our resources.
2. Does it identify the real sources of competitive advantage?
Until now, I have treated automation as a competitive advantage. Currently, however, it is too broad a concept to be a distinguishing feature.
Specializing the team in a specific direction will help me gain a real advantage. In this case, however, we also have a long way to go, from analyzing current resources, through the market situation, to creating an operational plan.
This will allow us to know what will really help us attract customers’ attention and then build lasting relationships. We will get the answer to the key question. What direction should we take in our competitive advantage strategy?
- Are we able to minimize direct and overhead costs while maintaining product quality in order to gain a price advantage?
- Can we focus on product differentiation in areas such as technology, design, and customer service to influence customer loyalty and reduce price sensitivity?
- Can we afford to focus on a specific segment and narrow our business goals to better meet the needs or guarantee lower prices for customers from a narrower target group?
3. Is it detailed (granular) enough in determining where to compete?
A good company strategy should answer the question of where we can gain a market advantage. This knowledge will enable us to define the right target groups that may be genuinely interested in our offer. Thanks to this and awareness of the real sources of competitiveness, we will be able to achieve the set KPIs. I already know that my current company strategy needs to be updated in this area.
I asked myself a brutal question. In the current situation, would the phrase “artificial intelligence-based automation” prompt me to use the services of a particular company? The answer is no – it’s not enough.
4. Does it anticipate/predict trends/discontinuities in market development?
Well, my strategy stopped at a stage when any automation was something exceptional and unique. Market realities have changed dramatically. My company remained in its bubble, where the message “Do you want automation? We provide it” could convince anyone. Instead of staying ahead of the market and anticipating trends, we allowed ourselves to be absorbed, falling far behind the competition. Perhaps we should focus on development and research, proprietary solutions based on innovation? Wouldn’t it be better to stay ahead of the competition thanks to the knowledge and competence of the team in a narrow field?
Re-analyzing the macro environment will enable us to make strategic decisions and find answers to these questions. Identifying and predicting megatrends, trends, and microtrends will allow us to prepare for the coming changes. Awareness of the discontinuity of market development will allow us to define the risks and the next steps that will reduce the resulting consequences. I already know that acting here and now does not always lead to results. The awareness and knowledge that we lacked turn out to be crucial.
5. Does it contain “unique” knowledge or predictions?
I am not a clairvoyant or a fortune teller who can read tea leaves and predict the future. I have always wondered how the competition prepares for dynamic changes in the industry. Well, if I had a good strategy, I wouldn’t have to think about it. I would simply be one step ahead of them.
Knowledge and predictions result from detailed analyses of the competitive environment and focus studies, which lead to unique conclusions. Based on them, you can prepare for several variants, alternative paths. Thanks to this, business goals can be achieved no matter what happens.
Knowledge and predictions increase our flexibility, which is invaluable in the IT industry. A good company strategy should be ambitious. It must anticipate non-linear leaps that will lead to the development of the organization. They will lead to a place from which you can fly higher and be one step ahead of your biggest competitors.
6. Is uncertainty correctly defined and taken into account?
I am not sure about anything, but this stems directly from a lack of knowledge and awareness. It frustrates me and drives me crazy. Uncertainty makes it difficult to make the right decisions about the direction of the company. Defining it correctly and including it in the strategy allows you to plan the next steps based on rational analysis. How can you do that when all the warning lights are flashing and everything around you is falling apart and burning? It borders on a miracle, and I am no miracle worker.
SWOT analysis allows you to define the potential risks, threats, and weaknesses of an organization. Identifying problems and challenges and then finding solutions rationalizes uncertainty. This makes a good company strategy a decisive factor in leading the company in the right direction.
7. Does it balance deep commitment and flexibility/learning within the organization?
With the seventh test of my strategy, I didn’t know if it was worth continuing. The answer is always the same: we are standing still. We focused on serving existing customers and acquiring new ones without engaging in product development. Market trends and changes bounced off us like peas off a wall. We were convinced that quality was our trump card, the dark horse in these races. Now we have to chase the peloton instead of leading it. Where did we go wrong? Our strategy was not flexible, it did not anticipate. It knew and confirmed my own beliefs.
Adequate flexibility allows a company to respond quickly to changes in organizational behavior, take advantage of opportunities, and absorb market stimuli. The balance between a traditional, planning-based approach to strategy and following trends allows for stability and the achievement of business goals while the organization evolves.
8. Have possible alternatives been considered without bias or prejudice?
A good company strategy should thoroughly analyze and define where we are today and where we want to be in X amount of time. Mine showed that we did not want to change – and thus we were opting for stagnation leading to a slow decline. We did not analyze all the alternatives and changes that could occur even in the coming quarter. We allowed ourselves to be taken by surprise.
An objective view of the company’s situation, possible directions for development and optimization lead to growth. Detailed analyses enable strategic planning and appropriate decisions to be made in line with the set goals. The strategy should resolve the dilemma of which direction we should take – even though every choice is difficult and irreversible.
9. Is there faith/conviction in the organization to implement it?
My team was unable to answer key questions about how and why we carry out specific activities on a daily basis. So it is difficult to pretend that they believed in the success of our – after all, joint – plan. A good company strategy should include a plan to convince people that it can bring success. It must lead to belief and understanding of how it will be implemented. Each implementation should be supervised by an expert who will dispel the team’s doubts and give it the right direction in the first stage of implementation.
10. Does the strategy clearly translate into specific actions/resource allocation?
We’re home! I can answer this question with a yes. We planned specific actions and managed our internal resources very well at every stage of implementation. Everyone did “something” well and achieved their goals. In answering this question, I now know that my “good” company strategy was actually a tactic detached from reality, a marketing plan. Results? There were some. Budgets? They were spent. Business goals? They were not achieved.
An element of every strategy is tactics, i.e., its practical reference to the activities carried out. Their existence in isolation from each other does not lead to real results. They must form a synergy. Tactics are the most flexible element of strategy. A chaotic set of good practices cannot replace strategy!
So what? A good company strategy
A good company strategy always answers the question “so what?” and allows you to overcome a cascade of dilemmas. Strategy is a home for a company, which should have a foundation, walls, and a roof. If you cannot find answers to the questions:
- What is the right “set of questions” for making key strategic decisions in your company?
- What is value for your company and why do you create it?
- What pitfalls should your company be prepared for?
- What are the potential paths to achieving your goal?
- How do you manage change in your company?
You’re in the right place. Our experts will help you prepare for any situation by creating a comprehensive strategy tailored to your company’s needs. One page strategy will give you the answer to one of the questions after reading the first page: why, what, and how your company does what it does.
