Strategy – that intangible part of business planning. The right one could see your business double in the new year. The wrong one, or none at all, could see you miss out on the big time, writes Louw Barnardt.
Some 11,000 start-ups are founded every hour around the world. But very few of these manage to successfully scale up. A reason for that is business strategy – or the lack thereof.
Founder and management teams need to carefully contemplate and craft solid long-, medium- and short-term strategies to put and keep their business on the path of success. Failure to do so has been the demise of start-ups and giant corporations alike.
Can you state your company’s strategy in a sentence and is it driving growth within your business? Strategy will determine the direction in which your business heads and will keep your whole leadership team on the same page. These are our five core steps on how to set an actionable business strategy for the year ahead:
1. Gain insight from your leadership team
The first step is to make sure that you cover your own blind spots by gaining insights from your whole leadership team. They are the ones on the ground with clients, product, operations and the likes, seeing and hearing things that the founders may miss.
Asking questions like “what has gone well this last year” and “what has not” offer deep insight on your current strongest and weakest business areas. Asking them to “name one thing that we should stop doing right now” and “one thing we should start doing right now” gives you great input on the key areas of opportunity and weakness in the business. Build a short questionnaire and gain honest feedback from your team to direct and expand your thoughts on what is important for the next phase of business growth.
2. Setting the vision straight
Vision directs strategy. Without the right vision in place, it’s impossible to set a good strategic direction. Articulating the vision consists of clear and cemented company core values, an easy to unpack company purpose statement and a clear brand promise. Having these in place, visible and discussed often helps the whole team to remain aligned.
Lastly, set a big, long-term goal or vision for the company. I’m talking twenty, twenty-five years out – a lifetime’s work. Something that would blow your mind if you can achieve it. From here it becomes easier to craft a five-year strategic direction for the business.
3. Mind the trends
With technology and markets moving faster than ever, watching trends globally, locally and in your industry is key to avoid becoming irrelevant and to ensure competitive advantage in the future. Spend some time with your management team unpacking all the trends that can impact your company in years to come. This often lays out big opportunities to take advantage of current trends or red flags that you need to avoid by pivoting your business in the years to come to avoid falling behind.
4. Clarify before you build
You will now have team feedback, company vision and industry trend analysis on the table. The next thing to do is to get clear about a few critical things. Define what the “words you own” are. Define – in painful detail – what your core customer looks like. Name your key differentiating activities that give you a big competitive advantage in the market. These will be the last part of what you need to set this year’s strategy.
5. Execute – 90-day planning
Now it’s time to put strategy into action. From all of the above, try to state your core strategy for the year in one sentence. Then get practical – set up a 90-day plan for the first quarter that includes all of the key action points that you need to achieve in the first quarter in order to have you on track towards achieving this year’s goals. This naturally needs to fit into the bigger picture of what you want to achieve in the next five years as well as your life’s work of achieving that massive twenty-plus-year vision for the business.
Now you and your team can decide on who takes what responsibility, giving three to five big quarterly goals to each management team member. At the end of the first quarter, review how it has gone and set goals for the next 90 days. Following this approach to long term and short term strategy will make sure that your team is focused, aligned and working on the right things at the right time. You will be on your way towards your best year ever.
Africa needs scale-ups to help solve its economic growth and job creation challenges and the social issues caused by them. Scaling up with the right strategies requires discipline and focus. Set your strategy straight and contribute to the business and entrepreneurship wave that is driving our continent forward. Africa needs you! Now go out there and smash those new year goals!
Louw Barnardt CA(SA) is the founder of Outsourced CFO, a CFO and cloud accounting services company that helps scale-up companies navigate growth.