A business strategy defines where you want to go and how you are going to get there.
You primarily need a strategy to:
- Set direction and priorities so that it is clear what success means and what needs to be done to achieve your vision for the company.
- Have a common purpose or understanding of where the business is going. You want everyone in your company to know where you are going with the business and what part each department or individual can play in helping you get there.
- Help in decision making. When you know your direction and priorities, decision making is easier. You have set your priorities so it is easier to say no to initiatives not aligned to the strategy.
- Drive alignment of resources. You want your hard working employees to work on initiatives that will add value to the business’s strategic success. You want to stop doing those things that can be considered a waste of time when reviewed against the strategy.
- Communicate. A defined and documented strategy can easily be communicated to employees, customers, suppliers, shareholders and other stakeholders. People can work towards helping achieve the strategy once they know what it is.
A word of caution, I have spent many years helping facilitating strategies. There are a number of challenges that I frequently see in organizations that hinder the implementation of strategies. These include:
- Not understanding the purpose behind the different elements of a strategy. For example, what is meant by a company’s mission? I personally have found this terminology very confusing. I much prefer the “purpose statement” of a business. It is clearer to me what is trying to be achieved in defining a purpose statement that a mission statement even though they are the same thing!
- Not understanding the power of a simple but clear strategy in defining the purpose and direction of the business. Spend some time in discussing the purpose of a strategy and how it can empower the business with your leadership team before you go through the strategy defining exercise.
- Understanding that an annual strategy definition exercise is not a waste of time. Getting your management team to define a strategy is a costly exercise in terms of their time. If they are not prepared to live by the strategy they have defined, I would recommend that you don’t waste your time in defining one in the first place!
In simplifytom.com we outline the different elements of a strategy and detail how you can go about defining them. Learn more by becoming a subscriber.