Every business needs a clear strategy. It also needs the capability to implement that strategy throughout the organization. Although strategic focus is essential for all businesses, it may take different forms throughout a company's life cycle.
Organizations of all sizes, at any phase of growth, must observe a simple but often missed distinction between strategy content and strategy process. Strategy content defines what your organization needs to do, while strategy process is the implementation of this strategic direction. The best-laid plans on earth are useless unless they are implemented. The strategy content must be translated into action items with clear priorities that make sense to the business units and to the functions that are called upon to implement them.
For example, consider a startup that has started to meet some of its initial business objectives. The company is earning revenue, and may even profitable. Now the company is faced with the challenge of expanding, growing and consolidating its gains. At this stage, the workload begins to grow and as new resources are deployed to manage the workflow, strategic focus begins to flag. And, as data from real customers becomes available, those early strategic plans are out of step with the market. This is the stage at which a young company needs to revisit its strategy and sharpen its strategic focus.
Another type of company is in a phase of rapid growth. The organization has already scaled to a certain degree but has reached a point where the operational competence is no longer sufficient to sustain its growth rate. The company may have a viable strategy but it starts to lose focus. What is clear to the strategic planning office may not be clear to the functional leaders. When this happens, priorities in the supporting functions begin to become unclear, leading to wasted resources and lost opportunities. The larger strategic decisions should no longer remain the bailiwick of top management alone. The IT, HR, finance and other managers need to also think and act strategically.
A third type of company finds that it has started to stagnate. Revenues have plateaued. The company may still be profitable but it is not seeing new opportunities. The organization ought to revisit and revitalize the company’s strategic approach to the market in addition to improving its operational effectiveness. A good time to refresh the business’s strategy is when a company is ready to reach for a new level of success.
One of the biggest mistakes made by companies of all sizes is failing to revisit its strategy. Changing circumstances, from macro-economic shifts to new technologies, necessitate that companies revisit their strategy content and revitalize their strategy process. Even minor tweaks can have a large impact in terms of gaining market share, bolstering competitive advantage and leveraging opportunities.Effective business strategy for any organization is founded on two pillars:
Our inter-connected world provides businesses with many opportunities to know its markets and its customers. Companies that think strategically know how to gather that data and build a base of market knowledge.
It is fundamental to know the strengths and weaknesses of one’s own organization. Organizations that are effective strategically know how to leverage their strengths and avoid competing on weaknesses. They have a clear identity and clear strategic aims that are communicated throughout the company. The overall corporate strategy is visible to all and linked to each function or department’s actions plans, priorities and performance measures. Such a company avoids waste and churn, targets the sweet spots in the market and responds to shocks in the marketplace.