Creating a business strategy will improve the chances of good things happening to your business or organisation. This is because it speaks directly to your vision and mission for being in business in the first place.
If you want to stay competitive you will have a strategy that combines your organisations’ goals and insights into the world in which you do business. Scanning your business horizon for opportunities and threats, spotting them early and responding promptly, will give you a competitive edge and resilient strategy, under many possible scenarios.
Important questions: How well do you understand the world in which you now operate? What is emerging on your business horizon for the next one to five years? Do you know what business scenarios you could possibly face?
To create a sound strategy you will need to consult with all of your internal and external stakeholders to draw out their assumptions and uncertainties regarding your vision for good business. Then streamline your choices.
Brainstorming meetings or workshops are a useful way of bringing people together. It is interesting to observe teams as they begin to feed into the discussion to explore options, identify shared values and opportunities for creativity and innovation. This is a good way for everyone to look at complexity, challenge assumptions and review the multiple ways that events could unfurl, in order to increase the resilience and reliability of your organisation and its capacity for innovation. It is also a great team building exercise and makes sure everybody feels that they have a stake in your organisations’ success. Be sure to consider how market trends, incidents and geopolitical events could affect the timing of some of the things that you want to do, during your brainstorming session too. You may decide afterwards that it is not possible to do everything you want to do. You may have to disregard some of your original ideas and postpone starting others.
You will eventually agree a time frame together for delivering your strategy. Its alright to choose a longer time frame to achieve your goals if you think you may need it, some companies have a one year strategy and others prefer to go longer term …three to five years. The important point is to make sure to set some milestones along the way, so that you have an opportunity to step back and check that you are on target and you are achieving the things that you visualised doing in the beginning. This is also a good point to reconcile your outcomes with your Mission statement too. Milestones and regular review will also help everybody to feel as though they are getting somewhere. Give you all time for a well-deserved pat on the back! (Now make sure you document your decisions well. Project Managers’ are great at this sort of thing!).
On the subject of uncertainties… this is a time for a bit framework building, that will support your staff to manage risk the way you want them to. The way that supports your organisations vision, ethics, ambition and cash flow.
During strategy setting you will want to discuss with one another how much appetite you have to take risk in every department of your business. Do this by fleshing out all of the things that are keeping your teams awake at night. Create a matrix for measuring the impact they could have (a simple traffic light coding will do e.g. green = very little impact, amber = this could hurt us and red = this is going to hurt a lot!) and then set a defined line in the sand, a step too far for the business to swallow. This part can also be called setting your risk tolerances. When you have articulated your risk tolerances for every department, it is a good idea to take a step back and look across your organisation to summarise all of your tolerances in just two or three short sentences. This is called your organisations ‘Risk Appetite Statement’. Ask yourself whether your organisations’ Risk Appetite Statement ‘sings to’ your Mission Statement and purpose now. If not, you may have to go back and tweak those departmental risk tolerances until everything aligns.
Lets recap-
- You have thrown your choices to ‘the lions’, you have been made to disregard some of them, some new ideas have been added to the pot and others have been forced onto the back burner. Your staff have enjoyed helping you do this and they are really bought into your business strategy. Everyone knows where they are going!
- You have decided how much risk you, your wallet and values are willing to take for each of the things your company is going to do and you have developed a consistent matrix to help your staff understand when the company can ‘push it’ and when to ‘please stop now!’
- Next you have to divvy up the things your business is going to do. You need some SMART (Specific, Measurable, Attainable, Realistic and Timely) objectives and owners to become accountable for each.