Do you have a strategy for your business? Well, many people and some quite significant businesses don’t have very good ones, and some have none. They have various plans from time to time, often prompted by events, but nothing you could really call a strategy. Isn’t strategy just another name for a plan anyway?
Well, Henry Mintzberg famously said it had a multiple personality – his famous five P’s. Other academics concede that actually there is no agreed definition for business strategy these days. Not a great deal of use then for most small business owners. In order to help I have my own definition, that probably wouldn’t get much recognition amongst academics, but it seems to help my clients.
My definition of Business Strategy is “consistent behaviour that makes the most of what you have.”
There are three important elements to this:
1. Consistent Behaviour. Once you have decided what to do you need to act in a very aligned manner so that every aspect of the business is geared up to implement a plan of actions that will materially increase the value of the business over time. On a timescale of years not months. Many plans are more tactical, short term, than this.
2. Make The Most. Your plan should set out the choices you have made about the line of least resistance for you and your business to achieve its aims, having considered all the other options and constraints you are facing, both internally and externally. You do this by being very clear about a couple of seemingly simple questions: “What business are you in?” and “Why do people buy from you?” You then focus on the answers, to develop your plan, as the foundation of your future success will often be buried in your past activity. You need to really understand the reasons for your success. You’d be surprised just how many people don’t.
3. What You Have. To have been successful at all you will have had something that persuaded people to buy from you, rather than from others. Understanding very clearly just what that is the key to “making the most of it” and then behaving consistently to exploit it.
So, put even more simply, a good business strategy is based on a very clear understanding of: what gives you an edge over your competitors, other than price; how to best exploit it; and then deploying your resources in a consistent way, over years, not months.
Pretty simple idea eh? Well, many find that they need a hand to put it to work in their business.