Strategy is a widely used word these days, yet this can obscure the necessity of taking on board essential concepts for the long-term health of an organisation. I find that businesses benefit from focusing on six basic elements to ensure they are thinking deeply enough about their strategy:
What is it that you are seeking to achieve as a business, are you really clear on this? This might contain a broad vision of what the company will look like, and also what you aim to provide for your customers, suppliers and employees in the future.
The second ingredient requires insight into the external environment. Every good strategy needs to be mindful of what is taking place in the outside world; what are the trends that are creating change in the way customers buy or the technologies you are using? Are there new competitors we need to understand further?
You should recognise the things you are particularly good at doing, the things that set you apart from other businesses, because they can be the future sources of advantage. Work on an understanding of your current and potential capabilities as the third element of strategy.
The fourth element is timing: what is the timescale you are working to? Most strategies tend to operate on a three- to five-year strategy timescale, perhaps with a five-year strategy refreshed every two or three years. Decide what is right for your business, make it long enough to make you think differently, but short enough to remain realistic.
A key element in a sound strategy is being clear on the scope or boundaries of the strategy: what is it you are not going to do, as well as what you are going to do? Good strategy requires some hard choices; and clear choices help to move an organisation forward. Sending out a clear message of what we are not going to do is often a very effective way to demonstrate what the strategy means in practice.
The final element of the six key areas is implementation – often the most problematic and often the area where strategies may become an aspiration, never really applied in practice. Implementation has to take the broad ideas down to detailed plans and initiatives, but most of all it has to impact on actions and the day-to-day activities of those in your business.
Check out your strategy against these criteria, involve others in this discussion and seek to keep your strategy current and relevant.
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