You've heard the saying: "If you don't know where you're going, any road will get you there." That saying is very apt when it comes to business strategy. If you don't have an explicit, documented, business strategy you're likely doing things - and your staff is doing things - but who knows if the things that they're doing are important, or if their time is being spent wisely? Further, who knows what kind of outcomes you'll attain and whether those outcomes will serve to drive your business forward and ensure sustainability for the future?
A documented business strategy is a must-have. Here we outline Seven critical questions for creating an effective business strategy.
1) Who are you and who do you serve?
The answer to these two questions defines your mission. Starbucks' mission statement, for example, is: "To inspire and nurture the human spirit - one person, one cup, and one neighborhood at a time." Yours might not use such poetic language, but the point is your mission statement will indicate what you do, who you do it for and, in some cases, some indication of the way you wish to position yourself - e.g., high-end, budget, innovative, commodity-based, etc.
2) What will you be when you grow up?
What do you aspire to? In other words, what is your vision for the future of your company? Apple's vision statement is: "We believe that we are on the face of the earth to make great products and that's not changing. We are here to make the best products on earth, and to leave the world better than we found it." Again, while your vision statement may not be quite so aspirational, the idea is to be forward-looking and to aim high.
3) What are your goals and objectives?
Here's another familiar business bromide: "You can't manage what you can't measure." What this means is that to manage effectively you must know what your desired outcomes are? Not only that, but you must also consider how you will measure those outcomes.
Your goals could be stated as revenue targets, ROI, market share, etc. You may have multiple goals, yet they should be clearly stated and your objectives should be designed to be SMART: specific, measurable, achievable, relevant and time-bound. That kind of specificity will ensure that you, and everyone in your organization, understand exactly what you are trying to achieve.
4) What strengths and opportunities do we have?
A SWOT (strengths, weaknesses, opportunities, threats) analysis is a commonly used business tool to help organizations refine their strategies. Identifying your greatest strengths and opportunities helps you identify what you can leverage to best help you achieve your goals and objectives. It can also help you identify potential gaps that you need to address.
5) What are your weaknesses and threats?
The flip side of strengths and opportunities are weaknesses and threats—the things that might hinder your ability to achieve your goals and objectives. These are barriers that you will need to overcome. Knowing what they are can help you avoid blind spots that could derail your organization.
6) What do our customers need from us today and what will they need in the future?
Clearly understanding your customers and what they need and value is critical to business success. But we live in a fast-paced environment. What they need today may not be what they need in the future. Forward-looking organizations are best positioned to avoid the kind of disruptions that have taken down some formerly top companies like Kodak, Blockbuster, and others.
7) How will we get there?
Once you have a clear idea of what you do, who you serve, and how you want to be positioned in the future, you'll want to determine how you will get there.
What skills, competencies and capabilities do you need to get where you want to go? Do you have the right employees, or contractors, already on your team who have these capabilities? If not, where and how will you find, recruit, and onboard them?
What policies, procedures, and practices do you need to put into place for employees to follow to ensure that your goals and objectives will be met? Are they documented and communicated broadly and often with employees?
Creating, clarifying, and communicating your business strategy is the best way to ensure the continued success of your organization. Your strategy is your roadmap for success—it ensures that you, and everyone in your organization, knows where you're going, and knows which roads you're going to take to get there.