BUSINESS STRATEGY
Andy Lambrecht, Founder & CEO, Jumpbeat Strategy
9 July 2018
“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where – “ said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
“–so long as I get SOMEWHERE,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if you only walk long enough.”
Lewis Carol, Alice’s Adventures in Wonderland
The above passage is often paraphrased, while still being attributed to Lewis Carol as “If you don’t know where you are going, any road will get you there.”
What Is A Business Strategy?
A business strategy is a well-designed plan for a particular business to achieve its vision and encompasses everything from products and services to marketing to finance. Sustained success of a business is most likely the result of a solidly designed strategy and successful execution of the strategy.
Successful businesses have a unique set of goals and objectives and a defined timeframe in which to achieve them. A solid business strategy reflects the strengths, weaknesses, resources, and opportunities of the business, and is distinguishable by the following features:
- It guides the business toward its vision
- It is easy to understand, and widely disseminated within the company
- It creates change by exerting positive pressure
- It thrives in competition and creates friends and enemies
- It creates the solution to multiple business problems
What are 7 Reasons that Business Strategy is Important?
With that in mind, let’s talk about why a business strategy is important.
1.Strategy Provides a Roadmap for the Business
A business that has well defined vision, goals and objectives needs a plan on how to achieve them. The business strategy is that plan. A business strategy is similar to the turn-by-turn directions provided by your GPS where the destination is the vision. Assuming a business has a clear-cut understanding of its goals (this is not always the case), the strategy defines how it plans on using the available resources to get there. The strategy helps the company keep track of its priorities and progress toward its goals.
2.More Efficient Progress Toward Business Objectives
A well-planned strategy, coupled with everyone working as a team towards a common vision, puts the business on the most efficient path towards its goals. Continued monitoring and refinement of the strategy fine tune the path before the strategy becomes too far off course.
3.Critical Decisions are More Easily Made
Without a clear strategy, decisions big and small often are made with the wrong criteria in mind resulting in inefficiencies in execution of the strategy. Even small day-to-day decisions compound over time to impede progress When decisions are framed with the strategy, the decisions become almost effortless to make and bring the business closer to its goals.
4. Resources are Used More Efficiently
When resources are allocated in alignment with the business strategy, efficiency is improved and the rate of progress along the path is optimized per the available resources. Allocation of resources in a way that is not fully aligned with the strategy pulls the business away from its path, or at best, slows down progress.
5. It Forces a Better Understanding of Strengths, Weaknesses, and Environment
A well executed cycle of strategy development, strategy execution, strategy evaluation, and strategy refinement should make clear where the strengths of the organization lie and expose weaknesses and gaps that can be improved and filled. A more thorough understanding of the market and competitive environments are developed as part of a healthy strategy cycle.
6.Helps in Hiring the Right Team
A clear strategy, along with a clear picture of the existing team, makes it easier to build the right team. The strategy should help clarify what roles need to be filled along with the characteristics needed in the candidates. Furthermore, a clear strategy will help attract the right people and make it easier to hire them.
7.Improves Teamwork Toward a Common Goal
With the right business strategy in place it is easier to gain commitment of the team in that strategy, and in turn, easier to motivate team members to work toward the common goal. Progress toward the vision is most efficient when everyone is working in tandem toward the vision.
Summary
A business that is operating with sound strategy gains a number of benefits. The benefits are seen when executing the strategy effectively. Using the strategy as a guide when making critical decisions, hiring decisions, resource allocations, etc. increases the efficiency of the organization in achieving its goals. I didn’t include “improved business results” as benefit as I consider this to be the goal, although it could certainly be argued that continued improved results are one of the largest benefits.