1. Create a clear vision.
Vision is a broad term that has varied connotations for different people. A vision, often known as a vision statement, is a projection of the future. It should include ambitions for the type of organization you want to be, and, unlike a mission statement, it defines success in concrete terms (customers, markets, volume, etc.).
2. Identify the source of competitive advantage.
Identifying how a firm can give distinctive value to its customers is at the heart of strategy. Companies in many sectors of the economy are drowning in a sea of similarity. In its service offering, pricing model, delivery method, and other areas, a well-thought-out business strategy should evaluate how a company might create space from competitors.
3. Establish your objectives.
Poor targeting is one of the most major hurdles to growth. Companies suffer from confusing message and, as a result, misalignment between sales and marketing in the absence of extremely specific aims. Companies can focus resources by defining niches and expertise (of course, some companies are generalists by design).
Clear target markets enable a corporation to develop an integrated sales and marketing strategy, in which marketing facilitates sales productivity. When deadlines are tight, sales and marketing plans are more effective.
4. Concentrate on long-term growth.
"A thriving company is a growing firm," states one of our Vistage member clients. Companies can only afford to invest in things like technology, the best staff, and new equipment if they are growing. The strategic strategy should specify which segments and in what percentage a firm will grow, such that the product mix yields a specified net margin outcome.
Only after reaching such conclusions will a corporation be able to determine how much capex, overhead, and other expenses it can afford.
5. Make decisions based on facts.
It's a "garbage in, rubbish out" exercise when it comes to strategy. Executives frequently complain about a lack of excellent data, but we regularly uncover knowledge that aids in strategy development.
We once assisted a Vistage member who was attempting to calculate the value of various segments served. We were able to quantify real shipments of merchandise by potential customers by consulting the public records of a local port.
6. Consider the long term.
Planning horizons are shorter than they used to be in the face of rapid change. Only thinking in quarters, on the other hand, is a trap that can rob businesses of their ability to see around corners. Best-in-class organizations develop systems that regard strategy as a yearly cycle as opposed to a one-time, static event.
7. However, keep your wits about you.
Companies can consider long term while remaining agile. An external forces analysis, for example, is an important part of strategy. Companies should be reviewing long-term external pressures and pivoting based on fresh knowledge (meetings should be held on a regular basis, possibly quarterly).
Amazon CEO Jeff Bezos has a strategy meeting every Tuesday to keep the topic in front of his management team.
8. Be welcoming to all.
Companies are involving more people in their strategy than in the past in order to remain nimble. There is more openness at a time when corporations are hiring more youthful staff. While I am not a proponent of firms opening their records (as this is a personal decision for the entrepreneur), there is undoubtedly a trend toward greater inclusiveness and transparency.
Choosing who to involve in the strategy development process is a crucial decision. We advise business owners to surround themselves with individuals they can trust and who can think strategically.
9. Set aside time for pre-work.
Make your managers perform research and produce important information in advance of your strategy sessions if you want them to take strategy seriously.
10. Track your progress and execute flawlessly.
Every strategy should be able to be implemented. Best-in-class companies include:
Have a strategic action plan that they monitor on a regular basis (usually monthly).
Encourage leaders and departments to share ownership of the plan.
Use predictive key performance indicators (KPIs) that are in line with the strategy goal.
Create a system of cascading goals that reach every department and are understood by employees, so they can see how their work contributes to the greater good.
Establish a performance management cycle that supports cascading goals and objectives to all employees, and set up their corporate calendar to promote productive meetings.
Every year, they repeat their strategic cycle.
Strategic planning involves discipline, and it is the responsibility of senior executives to encourage these processes.