I’ve been working as a strategist for more than 14 years now. I’ve been blogging for most of that time.
I LOVE being a strategist and truthfully, it’s one of the easiest things I do. I have a natural talent for seeing patterns in systems, piecing together creative ideas with problems to be solved, and synthesizing many points of view into a cohesive set of principles.
Recently, it occurred to me that I’ve never written a post about strategy — as a discipline. I’ve written plenty about strategy, but never a complete high level overview.
So, today, just as a fun and self-indulgent exercise, let’s do a nice deep dive on business strategy from start to finish.
What is a Strategy?
A strategy is a plan to achieve one or more goals.
In business, this can include the company’s overall direction along with frameworks for making decisions and designating tactics for different aspects of business. This can include product and service development, marketing, sales, operations, customer experience, and more…
In many cases, an organization may have strategies for each of these areas of the business with desired objectives resulting in unique documents for brand strategy, marketing strategy, and sales strategy, among others. A business may also go deeper into answering a specific, narrowly defined question resulting in pricing strategies, hiring strategies, or customer retention strategies.
In short, any time there is a problem to be solved, a company may engage in strategic thinking and documentation.
Strategy is a broad field of study and practice where recommended strategies will adjust based on a person or organization’s unique circumstances and goals. Some specific examples can include diversification, horizontal or vertical integration, product and brand differentiation, or market disruption through competitive pricing or delivery models.
A well-developed strategy will serve as a working theory that is tested and refined in the market. In this way, strategy is a science where a hypothesis is formed and then tested and refined.
The Components of a Successful Strategy
With the exception of luck, successful business strategy requires a deep understanding of the market, all stakeholders including customers, employees, vendors and strategic partners, along with the competition and a keen sense of the company’s own strengths and weaknesses. Perhaps most importantly, any good strategy must begin with a clear vision for what the company wants to achieve. When all of these factors are taken into consideration, a good strategist should be able to create a realistic plan for how to get there.
The components of a standard strategy should include:
- Specific goals and objectives
- A timeline
- A budget
- Identification of the company’s target market and audience
Additional components that are highly recommended include:
- A clear statement of the company’s overall direction or mission (look past the immediate goals)
- Some acknowledgement of competition or alternatives
- Key Performance Metrics or OKRs
- An understanding of existing strengths and assets
- An understanding of the various obstacles or challenges to success
- A list of roles and responsibilities
- Some explanation about a backup plan — e.g. how will we know when it is time to change course?
Each of these components is essential to the success of the strategy, and they must work together in order to create a cohesive plan that will help the company achieve its goals.
Most of this is discovered through inquiry and formulated through the recognition of trends and patterns.
The Process of Developing a Strategy
Developing a business strategy is a process that should involve the entire organization but the first step is typically initiated by the company’s top management.
Usually, this step is taken because a problem exists to be solved. Therefore, the beginning of the strategy process is the statement of the problem to be solved, and the desired outcome achieved through its resolution.
Typically, the next step is to conduct a competitive analysis to understand the market and competitive landscape. This will help illuminate market opportunities leading to the development some loosely defined ideas about how to approach marketing, sales, operations, or whatever else needs to be solved. As stated above, these ideas must align with the target market/audience and carefully consider the constraints of time, money, and labor resources.
All of these ideas should then be refined through collaboration with relevant team members to ensure alignment and buy-in for the subsequent phase of implementation.
Once the strategy is put into practice, it becomes important to continually analyze the results and make adjustments as needed, up to and including scrapping the entire plan and starting over, in more extreme circumstances. Even strategies that are working should be reviewed on a regular basis to ensure that it is still relevant and achieving the desired results.
The Benefits of Having a Strategy
There are many benefits to having a well-developed business strategy but let’s keep this section really simple.
A strategy provides a shortcut for decision-making and helps a company stay focused on its goals.
When this strategy is in place, it becomes much easier to know how to respond effectively to changes in the marketplace, shifts in customer demand, or internal setbacks.
In short, a strategy is a map with a giant red X on the destination that stops you from getting lost or forgetting where you are going.
The Pitfalls of Not Having a Strategy
Companies without a proper commitment to strategy lack direction and focus. They tend to make more impulsive decisions, allocate resources ineffectively, and are less well-suited to manage change and remain flexible.
Companies without a strategy will have a difficult time communicating clearly or competing against companies who have laid out a clear and compelling plan for their entire team to get behind.
In short, companies without strategy have no map, are less clear on their desired destination, and lack any effective method for onboarding new team members and getting them up to speed.
How to Implement Your Strategy
Implementing strategy requires a few key ingredients:
- Making sure everyone knows where you’re intending to go
- Making sure everyone knows the plan for getting there
- Making sure everyone knows their role in getting there
- Creating an implementation plan, a method for tracking progress, and a cadence for checking in on progress
To make these things real in the organization, you’ll need:
- DOCUMENTATION: A strategy document or slide deck
- ALIGNMENT: Strategy review and discussion meetings
- A TOOL: A project management tool
- MANAGEMENT: Daily, weekly, or monthly team check in meetings
Aside from these components the only thing left, is to do the work.
Measuring the Success of Your Strategy
I would advise against “using your gut” to know whether or not things are going well. Our intuition is notoriously bad for producing reliable and unbiased assessments of our own progress, especially against complex goals.
Sometimes, the measurement will be easy like when assessing sales performance. If the sales went up and more money came in, that’s a pretty good indication that things are trending in the right direction.
Other measurements that are relatively easy to track progress against are customer satisfaction scores or NPS, lead generation figures, employee retention, or account management response time.
When dealing with more qualitative metrics such as culture, DEI (diversity, equity, and inclusion) initiatives, or employee engagement, things get a little more tricky. You can try surveys but those results may be skewed if people already don’t feel comfortable answering. In these cases, again, it’s going to come down to doing the hard work of one-on-one conversations and getting a relative gauge of temperature from where things began before the strategy was implemented.
A few final thoughts…
You may have some lingering questions:
- how long should our strategy be?
- should we create it ourselves or hire someone to help?
- how long should we wait without results before abandoning a strategy?
…all these and more.
Unfortunately, there are no simple answers that would satisfy everyone reading this. But I will offer something I’ve learned over the years of doing this. In my most successful work doing strategy, the key ingredient has always been simplicity. I know, it sounds obvious or too good to be true. But it’s the truth, and one that is often counter-intuitive.
I’ve written 100-page strategy decks, but in many cases, it was the one page strategy briefs that people could print and hang in their office that made the biggest impact. The reason why should make sense.
If a strategy is only as good as the people and culture behind it, wouldn’t it make sense that the easier it is to align everyone, the greater the chance of success?
If you find yourself looking for a good one-page business plan template, then you’re in luck. I just added one on The SUPER Market. Get it here.
And if you just need a one page marketing brief, try this one.