Strategy is simply how you intend to compete as a business – but there is nothing simple about competing effectively. Your goal should be to develop undefeatable strategies in building a great business, and nothing less should be acceptable. 

So how do you know if you are on the right path?

 

Active Knowledge Question:

How do you assess whether your business strategy is solid and likely to succeed?

 

Let’s Talk Strategy

Strategic business planning, business strategy, business planning – however you may describe it – is one of those areas of management theory and practice that we know a lot about and at the same time know very little about.

I believe business strategy is one of the lost arts of leadership. It has been drowned in short-termism, profit as a purpose and self-interest. In many instances, it has become a political game and a regimented process that does little to drive the competitiveness of a business.

But, if used correctly, strategy can be a process that unites and inspires an entire business behind a single vision and goal. The power of that focus and alignment of resources in a 
single direction can catapult a business into territories it never thought possible.

Business strategy is how you intend to compete as a business and achieving a direction, alignment and focus across the entire business consistent with that competitive posture is the outcome sought.

Strategy is continuous and often emergent. It is said that the actual strategy is not important but rather the ability to implement that strategy. This is true, but only partially, as you cannot separate the process of developing a strategy from the process of implementing it and they must be seen as one continuum. One team should not be developing a strategy in isolation to another team who is then tasked with making it happen, it won’t happen under that approach.

As a business, you should see the development of a strategy process as a key ingredient of your success. Everyone should understand how you as a business go about strategy, creating it and delivering it. And everyone should follow that process. Remember a key outcome is that it unites and inspires the entire business behind a single vision and goal.

A Few Key Aspects About Business Strategy

Before we begin to consider how to assess strategy, let’s place some more traits around it to support context. All of these traits are in fact indicators of whether the strategy is solid or likely to fail.

Strategy:

• Starts with leadership.
• Fulfils purpose.
• Has a vision.
• Defines success.
• Recognises changing seasons.
• Incorporates the life cycle stage of the business.
• Drives capital value.
• Tells a story.
• Has an able team to deliver it.

Each of these traits is critical for strategy to be successful. Leadership must lead strategy and understand its role in underpinning their leadership. It must align with the purpose for which the business exists and establish an enticing vision of what the future can be and what success looks like. It must allow for the different seasons a business will experience and its lifecycle stage. It must compound the capital value drivers of the business, tell a compelling story, and engage the team that is capable of delivering on it with the support of the entire business.

These traits are almost conditions-precedent and, if not present, you probably should not proceed past ‘go’.

It Starts And Finishes With Conversations

When you think of business strategy, think of conversations and engagement with your team and then with your business as a whole. If you have developed solid business strategies with your team you will have discovered that during the process a new language emerges within your strategy team, which then spreads throughout the entire business.

This is a rich language with images and metaphors that carry significant meaning to your team. It is a language that arises from the strategy process that you conduct – a process of thinking, analysing, exploring, playing, dreaming, arguing, understanding and agreeing. It’s a language that will be unique to your business.

If your strategy process did not produce these outcomes it is unlikely to have been sufficiently robust to also have produced the best possible strategy for your business. As an analogy, think of a great movie that you saw with your friends. You come away from the movie with a shared experience and narrative that you will carry forward and use as a code between you in the future. A good strategy session should also form a shared experience that you can carry forward and build upon.

Assessing Business Strategy

In assessing business strategy, you are looking into the future and seeking to determine whether what is being proposed is likely to succeed. It’s the future and therefore unknown and accordingly, your success will never be guaranteed.

What you are looking for is confidence that the best possible decisions have been made in crafting the strategy that is before you. And you do that by examining the process under which that strategy has been developed, which includes the issues considered. If it has been a robust process your confidence should be high. But if the strategy has been produced under a weak process, then doubts must emerge.

It is also worthwhile bearing in mind that a successful strategy once delivered, is one that will likely to consist of things that you expected to happen, some you did not realise would occur, and those which just emerged along the way. And the team made all this happen were supported by a business that knew how to deliver and how to adapt to changing conditions.

‘Strategy is a function of structure’ means that any strategy conceived must be capable of being delivered by the organisation that exists or is being built as part of that strategy.

There are key elements that must be considered and present for a solid strategy to be produced, which may be ‘checked-off’ in supporting your confidence level in a proposed strategy.

These key elements are:

People

• That the right people were involved in the right ways in developing the strategy to fully explore the market, its customers, their needs and your capability to deliver value.
• The process adopted challenges and extends the way your team thinks about your business and its opportunities.

History And Future

• It explores and imagines what is possible and where the future could take you.
• It considers your history and its possible impact on your future plans.

Customers And Their Needs

• It clearly defines your marketplace, your customers and their needs, for today and tomorrow.
• It identifies the agents in and changes emerging in your marketplace and the impact they may have on your business, customer needs and the value you can or might deliver.
• It forms a clear view of the needs of your current and future customers.

Competitors And Industry

• It identifies your competitors, their relevant markets and offerings, and areas of strength and weakness.
• Assesses how well your competitors meet the needs of customers in your marketplace.
• Identifies clearly the ‘rules’ upon which your industry generally competes, and forms a view as to how that may be repositioned to your advantage.

Strengths And Positioning

• Lifts to the surface your core strengths as a business relevant to your customers’ needs and your marketplace.
• Identifies a position in your marketplace, which lifts your strengths to the forefront and is relevant to customer needs.
• Avoids direct head-on competition with competitors.
• Articulates the competitive posture that your business will adopt to out-compete the market.

Structure

• Identifies the organisational design of your business to deliver on your customer value proposition. And the actions to bring that about.

Future

• Clearly recognises how the business will compete effectively in the future and will be tested under various likely and unlikely scenarios.

Financial

• It builds and runs the models to test the financial impacts and returns of the possible outcomes of the strategy, and those outcomes are acceptable.

Risk

• Identifies the risks in delivering the strategy and satisfactorily mitigates these risks.
• Identifies risks arising from failure, or unexpected levels of success, of the strategy with acceptable mitigation approaches.

Implementation

• Considers clearly the impact of the strategy on the existing business and what it will take to deliver on it.
• Develops clear implementation plans and contingencies and options built in.
• The monitoring and reporting of progress is clear and in place.

 

If your strategy has considered these elements well and your business possesses those traits noted above, then you have done the best you can in bringing a solid strategy to the table. Success now lies in delivery, adaptability and the commitment of your business to the strategy.

 

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Richard Shrapnel