It’s true that you can start a business and obtain a reasonable amount of success without formal strategic planning. Filling a niche, offering a valuable service, creating a unique product, combined with grit and tenacity can get a person quite far without necessarily being strategic about it.
But there comes a time when strategic planning will help push your business forward, or help get you unstuck, or even bring you back from the dead. Call it an entrepreneurial milestone, or growing as a leader, but really defining your strategy is what will set you apart. The question is, where to start?
Over the years the word “strategy” has adopted a certain connotation that many people, not just business leaders, shy away from. Strategy is more than an outline we reference, and it’s much more than an analytical tool. Don’t mistake strategy as something that has to be complicated to figure out.
Cynthia Montgomery, author of The Strategist: Be the Leader Your Business Needs, says strategy needs to be rebranded and thought of as “the animated force, the energy, that directs everything a company does.” When you think of it in these terms, it’s much easier to get started.
Where to start with figuring out your strategy?
Really, the most important part is identifying the “essence” of your business. This will be your core strategy. Once you hone in and determine what that is and what it means, you can begin to build out your reinforcing systems.
Start at the root and form clarity. The five critical questions your purpose has to answer are:
- Who you serve
- What sort of products or services you offer
- Why do you matter and what are you bringing as a company?
- What you do that’s different or better
- What enables you to do that
If you can identify the answers to those questions, then you can manage to it, and help customers who care about those answers find you. If you lack a clear idea of what you want your business to be, you cannot create the reinforcing parts of your strategy.
Hallmarks of great strategy
How do you know if your strategy is any good? Cynthia Montgomery has defined the following as the hallmarks of great strategy:
- Anchored to purpose
- Has systems of advantage (not isolated points)
- Produces a difference that matters
- Creates barriers to imitation
By successfully doing the first four parts above, it makes it easier to succeed in the last part. Blocking imitation from competitors is never 100% guaranteed, but you can make it a lot harder for others to imitate you by nailing the rest.
As the strategic leader in your business, what should your role be?
After being clear about your purpose, as the leader, you have to live your strategy every day. Do not think of your business and your strategy as separate things. Your strategy isn’t merely the steps you follow to achieve the objectives of your business, the two need to be united and inseparable.
While setting the strategic direction, it’s up to you to guide your business. Don’t leave anyone out of the loop when it comes to your strategy, every single member needs to know what it is. Keeping it a secret from the rest of your team just doesn’t make any sense. Your ability to inform, motivate, and connect with everyone on your team is as vital to your success as anything else you do.
Realize that it’s a nonstop responsibility. Coming up with a strategy isn’t a fix only intended to be used for a window of time. Once you step into the role of strategist, it’s your job to watch over your business and make sure that all decisions are leading you back to your centre and reinforcing your purpose.