Your business can't be all things to all people, and excel at anything. Every entrepreneur and every business needs a strategy to keep them focused. In fact, in this new world of pervasive interactivity, it's time to rethink even how to develop a strategy. Strategy used to come from the inside looking out, but now it must come from a dialogue and engagement with constituents.
These challenges and the processes for a modern strategic approach are highlighted in a recent book by Gerben Van Den Berg and Paul Pietersma, "The 8 Steps To Strategic Success," which focuses on unleashing the power of engagement with customers, suppliers, employees, partners, shareholders, competitors and government institutions, to set your strategic direction.
Van Den Berg and Pietersma point out that strategic planning no longer works as a static event that occurs once a year. Market change happens too frequently these days, and organizations need to quickly change course just to survive. The real challenge is to recognize when and why a new strategy is needed, and optimize the process against three critical success factors:
- A good understanding of the context of strategy definition. Without shared understanding of cause, necessity and ambition, a business trying to formulate its strategy will drift. And without knowing where you stand, there is no way to set a course.
- An adequate use of content in terms of quality, completeness, and depth. Thorough analysis with appropriate models and instruments is needed to really understand what is not possible for the organization and the environment in which it is active. Thorough analysis is the basis for finding the right strategy options.
- An effective and inspiring process. Who are involved at what time, what are the roles, how is participation organized? In other words: applying the correct methods of engagement. These help to increase the intrinsic level of understanding, stimulate creativity, and develop ideas. Three things are essential in engagement:
- High quality level of participants' contribution.
- Willingness in analysis, vision, and numbers to think about the future.
- Initiating and pacing the implementation process.
Every business strategy should still be based first on a long-term business vision and goal - referred to by James Collins and Jerry Porras in their classic book "Built to Last" as the Big Hairy Audacious Goal (BHAG). The BHAG always poses three questions in parallel:
- What are you deeply passionate about? According to Collins and Porras, companies can only be really outstanding in areas where they are fully committed. The answer to this question should be formulated as 'a customer's problem the company is going to resolve like no other.'
- What can you be the best in the world at? This questions going beyond one or two features or best-selling products. It is about identifying a core competence which others cannot match. It might be a patented technology, but it could also be the creativity of employees or logistic competencies of the company.
- What drives the economic engine? This could be the utilization rate of a plant, the price premium of the brand, or the service offered or products sold. It is essential to keep this financial pillar in view.
From the answers to these questions, the strategic process needs to work its way through the futures you need to anticipate, business capabilities, and strategic options. From there, it's time to make a decision, execute on the new strategy, and measure results. Based on results, it's usually time for another iteration, and successful startups and enterprises never stop.
These days, you won't last long as an entrepreneur with one "next big thing." Success is more about your ability to "see around the corner" and sense the potential for market changes before they happen, and change your company rapidly to make them happen. How engaged is your strategic process with your constituents, and how fast can you adapt to their changes?