A Strategy for Building a Strategy
As a startup, we constantly strategize, think of where we are going, where we want to be, and how to get there. Obviously given our size, it is easy for us to align internally and make difficult decisions quickly. Unfortunately as companies grow they lose flexibility, speed, and alignment. From working with different clients over the years, we have come up with the below great strategy for building a strategy:
1. Have big dreams
Dreams are free, so might as well dream big. Don’t tolerate the usual incremental thinking. Go disruptive, and follow up with a great execution plan. This will excite your employees, your customers and you!
2. Profit = Revenue – Cost
Never forget this formula. You are a business. You are a converter of customer value to share holder value. Nothing more, nothing less.
3. Create unparalleled Customer Experience
In the digital age customers are buying experiences, not just products. Experience is not only about the quality of the physical product that the customer uses; Its about your website, quality and friendliness of customer support, packaging, delivery times, and many other factors depending on your particular business niche.
4. Understand precisely how your customers see you.
How many train operators became airliners? None. Why? Because they didn’t understand that they were in the business of transporting people from one place to another. They thought they were in the business of running trains from one place to another. The world is a rapidly changing place. Understanding what value you provide to the customer will help you plan through these changes.
5. Get as many decision makers on board as possible
A marketing, sales or product strategy must never be created without alignment with other departments within the organization including finance and HR. Ensure representatives from these organizations are onboard during all phases of the strategy creation process. Include representatives from your customers, or at least your customer service teams who talk to customers everyday.
6. Create the future and work backwards.
Define your 3-5 year business strategic objectives and dreams. Strategic objectives should be broad enough and disruptive enough not to need changing based on market conditions. Work backwards using small, measurable well defined steps until you get to the current situation. Make educated guesses for information that you don’t have.
7. Verify your Assumptions
Most of the failures we have seen are usually due to unsubstantiated assumptions. Check and recheck all your assumptions. It is OK to make educated guesses when data is missing. It is NOT OK to believe that you have made an educated guess when the data is readily available for checking but no one made an effort.
A strategy is not worth the paper (or memory banks) it is written on if it is not followed by a solid execution plan. Flawless execution requires constant alignment between all stakeholders to ensure everyone understands the what, where, and when of delivery. Product, Marketing, Sales, HR, Finance must all be in complete sync.
9. Things will Change, and the plan must change.
Strategic plans are important because they help define within an organization what must be done, and why. However, it is safe to assume that a lot can change during 3-5 years. While your strategic objectives should be broad enough and disruptive enough not to need changing, your actual plan of how to get there will need to change based on changing market conditions.
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