How to plan an effective business strategy for your business
When thinking about winning and retaining customers, you need to think about your strategy carefully. The wrong strategy can lead to poor performances so it is vital to get things right. So what is the best approach? Whilst a company strategy will be bespoke to each business there are some standard approaches that businesses can use to work out what the strategy should be. Here are some hints and tips for effective strategic planning process that have been proven by successful businesses.
Review or develop your vision and mission
Many companies have over-arching visions or mission statements. Before any strategy planning can take place a company must first define what their overarching goals are. For strategic planners this means engaging with stakeholders who may need to discover their mission as part of this journey. Conversations with customers, employees and suppliers may be required to take this important first step. An added benefit of this approach is keeping customers and employees engaged, and this will help with employee and customer retention.
I have found in the past that some companies forget that their strategy should support these visions. So remember to validate strategic decisions against you company vision to ensure success.
Analysis of business and operations
Once you have an overarching business vision you need to work out how far the organisation is away from meeting it. The strategy will ultimate be designed to fill any gaps so it is vital to understand what they are.
A classic way to achieve this is by using SWOT analysis (strengths, weaknesses, opportunities and threats). Again involving stakeholders, employees and customers. Surveys with questions aligned to the company vision and goals is another approach.
Once you have your vision and have understood how the business currently stacks up against it, it is time to start thinking about options.
Develop and select strategic focuses
As a result of the work completed, you should have a good feel for what the goal is and the gaps that need closing. So what should the focus be on? It is quite easy to focus efforts on the weaknesses to improve them, however a significant shift from strength areas could lead to them become weaknesses. Balance is vital, any strategy must build on strengths and improve on weaknesses.
List out what you learned during the analysis, and think about what can be combined to ensure goals are met. For example a strength maybe a particular product feature and a weakness could be client retention. Therefore an approach could be to increase awareness of the feature to existing customers, which can help retain customers.
Here is a real life example from a company I once helped – They saw the number of ‘contact centre calls per order’ as a weakness. Also their compliance product sales were low. After analysing the business and the wider market it was apparent that call volumes were within expectations. So we developed an approach that encouraged customers to purchase a compliance product during each call. This lead to higher sales, happier (and compliant) customers, and the perception of call volumes shifted from being a weakness to an opportunity.
Planners need to review the analysis and choose the right approach in response. At the end of this process you should have multiple and blended focuses. After these have been established the next step is to understand what success looks like.
What does success looks like?
Strategic planners now need to define success. This should be tied back to original vision/goals but at this stage something more tangible is also required. One of the most common approaches is to use SMART (Specific, Measurable, Achievable, Realistic and Timely) objectives.
Let’s say that a particular product has been chosen for strategic focus, what does success look like?
Specific: The goal needs to be specific. Instead of “Improve product performance” it could be “improve product load time by 50% by the end of quarter 1“. This removes the ambiguity and makes it absolutely clear what needs to be achieved.
Measurable: It is difficult to compare results to non-tangible goals. In our example above we have stated a 50% improvement which is measurable.
Achievable: Is the goal achievable? Research has shown that unrealistic goals will not stretch people further, they will in fact reduce performance. So when setting targets be sure get input from others including the people that will be responsible for achieving it. This will create more buy-in too!
Relevant: Is the goal relevant to the overall vision? If not is it the right goal? In our example does the 50% improvement on load time stack up against the vision of say “delight all our customers”? If so then it is a relevant goal.
Timely: What is the deadline for the goal to be hit? Goals without deadlines have a tendency to drag on and some are never achieved. In our example we have stated “by the end of quarter 1“. Remember of course that the goal must also be achievable.
To hit the overall goal of achieving the company vision you will have multiple SMART objectives. Once collated you will understand what success looks like and how they tie back to the original company vision.
Strategy implementation plan
Once you know what the goals and objectives are planners can move on to implementing the plan. It is time to think about resources, key individuals and importantly how can it all be achieved without dropping the ball elsewhere. By this time the approach will be quite specific to individual companies but here are some things to consider:
- The Timing. Does the business have peaks and troughs? Could strategic implementation be prepared/deployed during down times to reduce the risk to strengths during peak times?
- Does the business need extra workers to either back-fill or to provide expert knowledge or skills?
- What tools and systems can help you to achieve the plan?
- How much investment is required?
One of the most important success factors for an effective implementation of a new strategy is the constant review of the progress and the decision on any deviation from the plan. It is important to decide what to check and with whom the check is made. You should be constantly reviewing, and changing the strategy if needed. Do not see something through if it is not working, and iterate to make improvements.