Tips on Executing Effective Business Strategies

Can you honestly say that your business strategy is (or will) drive improvements in your company’s results and ultimately it’s’ value?

Many companies spend significant energy and resources in developing a business strategy. Developing a good business strategy requires a lot of hard work and the company’s leadership should expect this hard work to pay off. However, in many cases, company executives are not satisfied with the results of this exercise.

Just having a logical business strategy is not enough. The business strategy must be effective.
In our experience, many business plans are not effective. This can result in the company’s leadership either: (1) concluding that the plan is unworkable and abandoning the effort or (2) continuing to invest additional significant time & money to redo the strategy until it is effective.

There is a practical third option. Execute a Business Strategy Diagnostic Review of your present plan. In this review, a knowledgeable consulting professional can assess your present plan and recommend the appropriate changes to transform it into an effective strategy in a more efficient manner.

No one can guarantee the success of any business strategy. However, companies can improve their chances of creating an effective strategy by simply avoiding a few classic mistakes.
In our experience, five of the most common steps that can be taken to improve the effectiveness of many business strategies are:

1.      Your Business Strategy Must Fit Within Your Capabilities and Be Specific Enough For Effective Execution. An effective business strategy leverages the strengths of a company. It should also fit well with the company's internal capabilities and culture or it will be difficult to implement. In our experience, many strategies do not address these requirements causing difficulty in execution. 

2.      Create More Inspiring and Specific Company Goals. First, it is a misconception that a business strategy will not contribute to the company’s results until years in the future. The plan should not be viewed as being only a long-term exercise. An effective business strategy properly implemented can begin to have an impact on business results almost immediately. In fact, a good strategy should be formulated with both defined short & longer term targeted business goals to drive better performance. Second, another way to drive more effective plans is to create business specific goals that can be measured against the market and competition in addition to past company performance. For example, do you have a goal to grow at least or greater than the growth of the market?  When you use market driven targeted results, it helps to ensure that once your business strategy is completed it will not be dull but inspirational. It will be targeted to achieve the desired results in the marketplace.

3.      Develop a Strategic Market Position That Truly Differentiates You from Competition. This is perhaps one of the most common omissions that we see in business strategies today. Many companies produce a very flexible, broad and generic strategy statement that makes everyone feel comfortable and does not limit any future potential business opportunities. However, the result is usually predictable. It makes the company look very similar to every other company in the market. A strategy statement should include a competitive differentiation that can be sustained over the long term.

4.      Develop a Greater Understanding of the Market and the Market Segments. We find many companies need a better understanding of the market in which they do business. Most companies are aware of the approximate market share of the major competitors in a market. A number of companies can also identify current market trends and project the impact these trends will have on the market and their company. However, in our experience, few companies truly understand important market issues such as: (1) the buying factors of customers in the market: (2) the differences in buying factors among the various market segments, and (3) the importance of these buying factors to the customers. We believe that overall strategic intelligence should track a broad array of indicators with emphasis on identifying changes that may affect the short and long term strategy of the company.

5.      Know Much More About Your Competition. Many companies do know their major competitors and some key information about each including their products, their prices, and promotions. However few companies evaluate the cost structure or marketing & sales approach of their competitors and compare it to their own. A much better working knowledge of competitors is critical when trying to understand your competitor’s business strategies and how you can develop strategies that are competitive within the buying factors within specific market segments.

These are just a few examples of issues that our professional consultants uncover when completing our Business Strategy Diagnostic Reviews. We work closely with our clients to identify both the additional information needed and the additional analysis necessary to transform their present plan into a more effective implementable business strategy that drives results.

While there is no guarantee that the business strategy will be successful, addressing a number of these areas for improvement may significantly improve your chances of success.