Develop a true business vision
Vision means different things to different people. Classically, a vision statement is a snapshot into the future. It should include aspirations of what type of company you want to be. Unlike a mission statement, articulates what success looks like in clear terms (customers, markets, volume, etc.).
Define competitive advantage
The essence of strategy is identifying how a company can deliver unique value to its customers. A well-thought-out business strategy should consider how a company can create space from competition in its service offering.
Define your targets
One of the most significant barriers to growth is poor targeting. Defining niches and specialties allows companies to focus resources (of course, some companies are generalists by design).Clear target markets give a company the ability to create an integrated sales and marketing approach. Sales and marketing plans are executed more effectively when targets are tight.
Focus on systematic growth
The strategic plan should identify in which segments a company will grow and in what proportion, so that the product mix yields a specific net margin result.Only after coming to such conclusions could a company know how much it can afford in terms of capex, overhead expenses and so on.
Think long term
Only thinking quarter to quarter is a trap that may rob companies of their ability to see around the bend. Best-in-class companies create processes designed to treat strategy as an annual cycle rather than a one-time, static event.
Invest time in pre-work
If you want your managers to take strategy seriously, make them conduct research and prepare relevant information in advance of your strategy meetings.
Measure your results and execute excellently.
Every strategy should be actionable. Companies that are best-in-class:
- Have a strategic action plan that they track often (usually monthly).
- Utilize key performance indicators (KPIs) that are predictive and align directly with the strategic plan
Have cascading goals that reach every department and resonate with employees so they understand how their role contributes to the greater good.
- Rinse and repeat your strategy cycle every year.
The execution of strategic planning requires discipline, and it is the responsibility of senior executives to promote processes that keep a team focused on the prize.