9 Tips for an Effective Business Strategy
In this article, we will take a look at what a business strategy is, why it is important, the different strategies there are, things to think of when creating your own, and some examples of strong business strategies.
The company’s management team will implement this plan in an attempt to gain a competitive edge within a given market, delight customers, maintain effective operations, and achieve specific targets.
Within business, a business strategy is a kind of long-term image of what the leaders want to achieve. It is the direction in which the business should be steered. It is a blueprint of corporate intent and action, which is carefully thought through and flexible enough to:
A company’s business strategy, the set of actions decided by the company’s leadership, will enable them to gain new clients, compete effectively, increase performance, and reach company goals. It sets out a plan of action for how the company should operate to reach the desired outcome.
By establishing a business strategy, leaders are able to spot, evaluate and exploit relevant opportunities, to manage and adapt to threats, to use business resources and strength optimally, and to counteract weaknesses.
Business Development vs. Sales
Sales is the task of converting leads or opportunities into new clients. Business development is a broader term that encompasses many activities beyond the sales function. And while there is some overlap, most traditional BD roles are only lightly involved in closing new clients.
Business development is often confused with sales. This is not too surprising because many people who are clearly in sales have taken to using the title of Business Developer. Presumably this is done because the organization believes that the BD designation avoids some possible stigma associated with sales.
Nowhere is this practice more prevalent than in professional services. Accountants, lawyers and strategy consultants do not want to be seen as “pushy sales people.” This titular bias is firmly rooted despite the fact that developing new business is an important role of most senior members of professional services firms.
Since so many clients want to meet and get to know the professionals they will be working with, the Seller-doer role is well established in many firms. The preference for Seller-doers also tends to discourage firms from fielding a full-time sales force.
As an alternative approach to leveraging fee-earners’ time, some firms have one or more Business Developers on staff. In the professional services context, these folks are often involved in lead generation and qualification, as well as supporting the Seller-doers in their efforts to close new clients. In other organizational contexts, this role might be thought of as a sales support role.
The result of this confusing picture is that many professional services firms call sales “business development” and make it part of every senior professional’s role. They may also include some marketing functions, such as lead generation and lead nurturing, into the professional’s BD responsibilities.
How to Create a One-Page Strategy
You can’t deliver on your strategic plans if you aren’t crystal clear on what exactly you want to achieve and, in turn, what areas of your business you need to focus on to achieve those aims. Having spent many years working with companies and governments big and small to develop successful strategies, I believe the most valuable strategy tool is a clear and concise one – preferably a single-page document that absolutely anyone in the company can easily understand.
To help businesses create their one-page strategy, I’ve developed the SMART Strategy Board. It’s divided into six simple sections, which form the six critical areas that every business strategy should cover.
In this section, you need to set the scene and provide an overarching context for your strategy by laying out, in simple terms, exactly what your business is aiming to achieve. A good way to do this is by including your purpose and ambition statements. These are two different statements, fulfilling different jobs.
Your purpose (or mission) statement should be a brief, simple statement that neatly encapsulates why your business exists. As the name suggests, it answers the question, “What is our purpose?” A mission statement is usually intended for internal use. It communicates your company’s intentions, motivates internal stakeholders, and defines what success looks like for your company. It should include your target audience, what services or products you deliver, and what makes your offering unique.
An ambition (or vision) statement defines what the organisation wants to achieve in the future, it spells out the destination of where the company is heading. Available to both internal and external stakeholders, a vision statement sets out your ambitions in an inspiring way. A good vision statement should inspire employees to perform at their best, inspire customers to choose you over your competitors, and inspire shareholders to invest in the business.
This section is about understanding your customers, specifically: what you already know about them, what you don’t yet know, and what you need to find out if you’re going to successfully deliver your strategy.
First you need to set out who your target market is. For example, are you targeting a particular segment, geographic region, or demographic? Define exactly what you need to know about the target market in order to improve your chance of success.
Next you need to clarify your value proposition, which means what you offer your target market. Essentially, you need to define why customers will choose you. Is it because of quality, innovation, customer service, price, or something else?
In this section, you need to clearly set out the company’s financial goals and ambitions. What is your business model? How will your strategy generate revenue? What are your specific revenue goals? What about profit, cash flow and growth goals? Also, you should consider how you are going to finance your strategy. It’s vital you have the funds to properly see your strategy through.
Here you need to carefully consider your operations or the things you need to focus on internally and be really good at if you’re to be able to deliver your strategy. This section is divided into two: partners and core competencies.
Start by defining which partners, distributors, suppliers or other parties are vital to delivering your strategy. Do you already work with these partners or do you have to create the relationship from scratch? If you already work with them, is the relationship healthy? If you don’t already work with them, how will you go about forming that relationship?
Then look at your internal competencies in terms of the competencies your organisation needs to execute the strategy successfully. Define whether there are any gaps in your competencies and, if so, how you intend to fill them. Also look at which systems and processes need to change or be improved if you’re to achieve your goals.
The aim of this section is to define exactly what resources you need if you’re to execute your strategy properly. This covers IT systems and data, infrastructure, people, talent and cultures; and value and leadership.
This means you need to carefully consider a number of questions. For example, what IT systems and data are you going to need? What infrastructure – property, machinery or plant – are you going to need? What are your requirements in terms of talent and people? Do you have the right people and, if not, how will you go about finding them? Do you plan to train your current staff or recruit new people? And finally, what are the key culture and leadership deliverables that will allow this strategy to succeed?