Two Steps To Creating A Business Strategy that Really Works

(By Michael Beck)

Taking the time to truly understand the problem is the step that often gets short-changed or, worse, skipped altogether in the creation of a strategy because it is difficult to do.  Even more challenging is trying to foresee where an industry is headed. One of the main reasons it’s so difficult is that we all have blind spots in how we think, in what we believe to be true and in the actions we’re willing to consider. It generally takes an outside perspective to reveal the things we’re blind to.

As an executive coach and strategist, I’ve come to understand that if a business truly wants to develop a strategy—something that makes a real difference to its growth, its profitability and its future—it first needs to gain clarity regarding one of two things. Either it needs to fully understand the main challenge it’s presently facing, or it needs to understand and anticipate where its industry is headed, along with the resultant challenges. In my efforts with clients over the last 13 years, I’ve observed that most strategies that companies develop aren’t strategies at all. Instead, most are a collection of pseudo-inspiring jargon, worded to make the leader appear assertive and forward thinking. The goals don’t really don’t do much more than push up revenues and sometimes profits as well. While sales and more profits are certainly a good thing, they are not the keys to strategy. Instead they serve as a bandage to cover up the real issues that beg to be addressed.

Taking the time to truly understand the problem is the step that often gets short-changed or, worse, skipped altogether in the creation of a strategy because it is difficult to do.  Even more challenging is trying to foresee where an industry is headed. One of the main reasons it’s so difficult is that we all have blind spots in how we think, in what we believe to be true and in the actions we’re willing to consider. It generally takes an outside perspective to reveal the things we’re blind to.

Identify the Real Problem by Asking Why

Let’s use a simple example of a company with weak sales. The feeling may be that the problem is weak sales, but in fact, that is a symptom of a more fundamental issue. It requires persistent digging to uncover the core problem. Start by asking why the apparent issue exists and continue digging by asking why at each successive answer until it becomes clear that you’ve arrived at the real problem. You’ll know it’s the real problem rather than a symptom when you ask why and there is no further cause. Once the real problem is accurately identified, a general course of action can be decided upon that becomes the overarching strategy.

Establish Solution-Oriented Actions

Let’s assume we’ve identified the core problem: The products offered lack sufficient distinction and value in the marketplace. The overarching strategy should then be to innovate in an effort to drive value and differentiation. Once this core issue is properly addressed, most if not all of the symptoms go away.

With a general course of action firmly established, a series of specific actions can now be developed. The actions should address the problem, but they must also work in harmony to move the company, its products and its services in the same direction.

If the overarching strategy is to add value and differentiation, specific actions you can take might be to survey existing customers, create a research and development department, or rebrand the product line. These actions interlock with one another, moving cohesively to a common end. Putting this all together into a company statement of strategy, the strategic statement might look something like this:

“Our strategy is to elevate our value in the eyes of the customer by determining what they want, adding relevant, unique product functionality, and effectively communicating our uniqueness to the market.”

By properly identifying the problem, determining a meaningful course of action and developing specific actions to be taken, we avoid a “non-strategy” such as “our strategy is to secure a greater market share and become the leader in our industry.”

Having a focused, meaningful strategy will place any company in a position to experience significant growth and profitability.

(Source: Openforum)

“Opinion pieces of this sort published on RISE Networks are those of the original authors and do not in anyway represent the thoughts, beliefs and ideas of RISE Networks.”

RISE NETWORKS

"Nigeria's Leading Private Sector and Donor funded Social Enterprise with deliberate interest in Technology and its relevance to Youth and Education Development across Africa. Our Strategic focus is on vital human capital Development issues and their relationship to economic growth and democratic consolidation." Twitter: @risenetworks || Facebook - RISE GROUP || Google Plus - Rise Networks