10 Keys to Effective and Timely Business Strategy

Strategic decisions set the overall direction for your business, whereas operational or tactical decisions set day-to-day operations. Unfortunately, most of the entrepreneurs who contact us for strategic guidance only seem to seek help when they are in a crisis, such as losing a major distributor or being swamped with customer complaints. It’s a bit late when strategy becomes operational.

Every entrepreneur and business owner should set aside time every week for proactively working on strategy. I call it working on the business versus working in the business. Working on the business should not be done in the same ad-hoc crisis manner as operational decisions. I suggest a more formal analysis and decision process along the following lines:

1. Identify potential next business steps based on trends. Force yourself to step outside the proverbial box and come up with a half-dozen innovative changes which might improve your business. Ask your team to prioritize these alternatives, based on benefits, costs, risks, and other impacts. Part of the intent here is to get buy-in from the team that change is not all bad.
2. Challenge your team with strategic questions and issues. The process of asking and answering strategic questions is key to getting everyone to think beyond today. Every entrepreneur benefits from out-of-the-box thinking. The “5 Whys” is another technique used to determine the cause of issues and stimulate in-depth thinking iteratively.
3. Ask for analysis and feedback based on long-term impact. Often, beneficial changes will have a short-term cost to achieve market growth or competitive advantage. Investors, for example, usually want short-term profit distribution versus reinvesting for the future. Thus, every analysis needs to justify the investment in terms of the long-term benefit over a strategic time horizon.
4. Look for objective and current data to support your analysis. Instinct and emotion influence many operational choices made during times of crisis.
   Instead, statistically valid samples of complete and consistent data should drive your strategic decisions. The best analysis done on bad data will still yield a bad decision.
5. Factor in previous results, best of breed, and known failures. Unlike operational decisions, strategic decisions require going beyond your own experiences to look at competitors, industry experts, and failures in the marketplace. Make sure you don’t repeat your own mistakes or the mistakes of others before you. Quantify risk levels.
6. Don’t allow analysis paralysis to hamper strategic decisions. Always identify your top objective for any specific decision and use that to drive everyone to closure. Many business owners overthink critical directional decisions to the point where a change never gets made, or before implementing a decision, conditions have changed rendering that decision invalid. Analysis is essential, but so is taking action.
7. Make strategic decisions based on your values and goals. After listening to the opinions, suggestions, and ideas of others, strategic decisions have to be made by you, tempered by your vision. Don’t try to please everyone with every decision. You need to be comfortable with your business and your legacy. Only you will be held accountable.
8. Every strategic decision needs a “Plan B.” Contingency plans make sense in every case these days since technology and market factors are always shifting. In all cases, there are external factors that you can’t control such as regulatory, economic, and environmental concerns. Having a Plan B must never be a shortcut for not doing a proper analysis.
9. Define metrics to assess roll-out progress and value. Tie your implementation to outcomes that will allow you to determine whether or not your decision truly achieves your goal. Establish milestones that you can tie to your quarterly and annual objectives. If you track your progress against measurable targets, you can adjust tactics as necessary.
10. Communicate strategic decisions to all, with implementation plans. Strategies loudly proclaimed but without a specific roll-out plan will be ineffective or will fail. Everyone has to understand what needs to be done, how to do it, and who is responsible for each element. Your task is to manage the rollout, provide the right incentives, and make any necessary adjustments.

In today’s business world, making sound strategic decisions is increasingly critical and challenging, primarily due to the current high levels of volatility, uncertainty, complexity, and ambiguity in the marketplace. Thus it behooves every business owner to spend more time on strategic planning and to delegate more of the operational elements.