FORMING A BUSINESS STRATEGY

  1. Find Your Purpose
    “What is your organization’s purpose?” This seems like a simple question, but there are a million different answers. If your business is struggling to find its identity, it’s worth asking what you are setting out to do, that isn’t just making money. Maybe you’re developing a revolutionary new piece of software with the potential to streamline the operations of an entire industry, causing reciprocal gains for you and others. This is often referred to as ‘creating shared value’. If you choose to center your strategy around helping others or creating long-term sustainability, there comes the potential to carve out your very own, highly-lucrative space.
  2. Adapt to Your Environment
    A common cause for a business strategy to stagnate is to forget to consider it within the context in which it is implemented. Put simply – taking current events in both your industry and the economy as a whole into account when strategizing. The reason this is often passed over is that it is an ongoing process which must be constantly refined and adjusted. It’s good to think of strategy as a whole in this way, as a 24/7 process rather than a single event, planned for at the beginning of one quarter and put on the shelf until the next.

    This isn’t exclusive to purely fiscal concerns. As circumstances change, your stated purpose may shift; nearly every industry felt a shake-up in both day-to-day operations and/or long-term planning following the Covid-19 pandemic. Many companies took this as an opportunity to help their communities while also improving the brand messaging of their business. A famous example is L’Oréal USA, who went above and beyond with very public donations of money, hand-sanitizer, and PPE. They even froze payments coming from small businesses in their distribution network that had trouble operating during the pandemic. This move ultimately cost the company money, but created value by positioning themselves as a socially-conscious brand.
  3. Read and Experiment
    Your business, while conducting business as usual, is providing a wealth of useful data to draw from and examine. No long-term strategy should be planned without close examination of your organization’s financial statements. Comparing these with case studies of similar businesses and their underlying economic principles, you can try to draw from what has and has not been historically successful. Use this information as a means of experimentation – you have to be very intentional when studying data and knowing what to apply.
  4. Ongoing Communication and Your Goals
    A commonly touted (and shocking) statistic is that roughly 95% of employees don’t understand or can’t articulate their company’s strategy. This figure should be incredibly alarming when you consider that the successful execution of strategy requires organization-wide cooperation and effort. John Hamm, general partner at VSP Capital, likens intelligent implementation of strategy to a professional golfer’s meticulous set-up and swing. “In the long term, consistently positive results spring from intelligent strategy and an incessant focus on the quality of execution… Once the ball is in the air, there is no way to control it; it will land where it will.”

    The actual crafting of a strategy is crucial, but in order to be successful it must be effectively and cohesively communicated to the entire organization. Every employee should feel empowered and responsible for helping the company reach its eventual goals.
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