SIX STEPS TO MAKE STRATEGY STRAIGHTFORWARD FOR YOUR SMALL BUSINESS

Strategy sounds massively daunting, especially for a small business. When thinking of business strategy, two key obstacles must be overcome to understand the importance of strategy for businesses of all sizes. 

Firstly, understanding that a strategy is a roadmap to achieve your business vision and objectives. In this way, strategy is intrinsically related to processes. Processes allow you to track and monitor the objectives established as crucial by your strategy. Regardless of whether you have 150 full-time employees or you’re a one-person show, you need to understand how your work is translating to your desired results. 

Secondly, to reap the benefits of a small business- for instance, the ability to engage with customers and their desires, with great agility, and a clear brand purpose- you have to have a clarity of understanding about where your business currently is, and how your strategy links to processes. 

Overall, we can see how important strategy is, and crucially, that strategy planning does not have to be an incredibly elaborate and expensive endeavour.  Following the six steps to straightforward strategy for small business outlined below is a great first step in developing your strategic plan and creating a process for adapting and re-evaluating your plan.

  1. Understand your ‘as is’ situation 
  2. Identify your strategic barriers
  3. Refine your business value and vision
  4. Define Critical Success Factors
  5. Draft a 1-page strategy document
  6. Create an action plan with measurables and accountabilities 

Taking these six steps forward, small businesses will be well equipped to break down a massive strategy into small, manageable, accessible steps. This process should be cross-functional, incorporating information from across your business. Achieving clarity in your strategy will help your business reach your vision in a measurable manner, leaving room for adaptability and reappraisal.  

1. Understanding your ‘as is’ situation

Knowing where you are is crucial to support the realisation of your goals.  Identify the critical areas needed to understand the status quo of your organisation, where you want to be, and how you can get to the desired future. Take the time to understand how your business slots into the modern business landscape- including evaluating whether you’re a reactive or proactive business, understanding current clients, anticipating client needs, and numerous other functions. 

Several key headings can work to structure the questions you need to ask about your business to understand the ‘as is’.  Our high-level suggestion includes, customers, human resources, contractual negotiations, competitors, industry development, market and industry segments, partnerships, and processes and systems. Though this seems exhaustive, questioning your business is crucial to identify areas for development. 

These questions may include: 

  • What is the revenue and profitability of your key customers? How would you like to see this improve?
  • How many services do your customers use?  How dependent are they on this offering?
  • Can our experts drive the business forward in the future and, if not, which areas need to be addressed with additional expertise?
  • What is the preferred profile of your ideal customer?

Ultimately, this differs based on the specifics of your business, but core functionalities must still be considered.  Likewise, it may help to execute a SWOT analysis on key areas of your business, like your business processes or IT Infrastructure, to support this understanding.  An inability to answer questions due to a lack of data can also indicate a weak process as there is no tracking or monitoring taking place.

2. Identify your strategic barriers

As a continuation from your questions and analysis, small businesses must understand their strategic barriers. Strategic barriers are obstacles which will make your strategy plan difficult or impossible to action. These are easier to divide by business function.  This is also a useful as it facilitates the collection of quantitative data, as you can mark yourself on a scale, 1-5 for instance, in response to the questions identifying strategic barriers. Our suggestion includes 5 key functions, namely human resources, process and systems, customers, contractual requirements, and sales and marketing support. 

Grade yourself on questions like: 

  • How effective is your organisation in knowledge sharing, working together to share new ideas, and developing innovative ideas?
  • How effectively does your organisation link processes from a commercial perspective? 
  • Has your organisation proactively adapted to customer needs? 
  • How effective is your organisation at continually optimising solutions to customer challenges by looking for new solutions?
  • How successful is your communications team in creating effective marketing material and presentations for your business? 

Creating a qualitative way to measure your strategic barriers is a useful precedent to put into place moving forward, especially as it creates a measure for your internal barriers. Likewise, it will then support the process required to track your strategy and progress, as we will later discover.

3. Refine your business value offering

Now that a clear understanding of the business ‘as is’ exists, it’s important to refine what your unique business offering is to your customers.  There are numerous models and techniques to clearly develop your business value proposition. This may be a set of instructive questions, or a multi-step checklist to determine value propositions. Likewise, this is an important time to understand your business drivers. Drivers should be clearly identified based on your business, and a maximum of 3 or 4 should be outlined. When identifying Drivers and Values important to your organisation, keep in mind what is important to your business and industry.

 Our preferred method of clearly delineating the value proposition for our clients is using the Strategyzer Value Proposition Canvas. 

This allows you to make quick links between your gain creators and pain relievers versus the gains and pains of your customers. Find out more on this link to Strategyzer’ s Value Proposition Canvas.

Regardless of which method you use, refining your value proposition is crucial, be that whether your business is nearing its 15th anniversary or its 5th month. 

4. Define Critical Success Factors

Critical Success Factors, CSF, can be understood as the high-level elements of your business that are necessary to achieve your mission. In other words, if you do not complete these elements, you will not achieve your mission. To qualify as an effective CSF, it must: 

  • Be vital to business operations
  • Offer clear measured benefit to the business
  • Link to a high-level goal

An example of a CSF includes, for instance, increasing Market share through current customers. This will then also assist decision making further down the line. It indicates the requirements for decision making and can deter ‘analysis paralysis’ by offering basic thresholds which must be met, otherwise the risk of failure is relatively modulated- you know what your Critical Success Factors are.  To meet this strategic objective, your teams will then develop a cross-functional process. 

5. Draft a one-page strategy document

Having gone through the process of determining your ‘as is’ and understanding your goals, it is time to draft your 1-page strategy document.  This should consider all the components you derived for the development of your strategy.  A one-page summary should include milestones with measurable targets and/or anticipated dates of completion. A one-page summary also provides a quick reference guide to help remind you and keep your business on track. To compile a one-page summary, we suggest the use of a strategy map. A Business Model Canvas is another great tool to support a clear and simple strategy document. Strategyzer’ s Business Model Canvas template is easy to use and a free resource. 

6. Create an action plan with measurables and accountabilities

According to research, over 70% of strategic transformations fail. This is largely due to an inability to transform theory into practice. To make sure your business takes action, the key to success is establishing a scheduled of milestones and review timeline for the strategy. Therefore, Identify Action believe that processes are necessary- processes align with strategy execution. The success of your strategy is measured continuously through the KPIs and measurables established in your core processes. If there is a failure in understanding how processes work together, your core business functions will not follow your strategy plan. Likewise, processes ensure that you have a clear understanding, communicated across the business, of responsibility and ownership over tasks. If you sought the expertise of your people throughout your strategy process, which is highly advised, they should have a clear buy-in into your plans. By aligning processes with strategy execution, you are also able to demonstrate to employees how they fit into your business journey. 

In conclusion

Strategy is a buzzword which will never fail to be misinterpreted, misused, and misaligned with business goals. However, when approached correctly, your strategy is the clearest roadmap possible to business success. Remember that it is not static, it is adaptable. Keeping it in mind and reviewing your plans will keep your business aligned to achieve you aims. 

Want to learn more about our strategy work? Get in touch via action@identifyaction.com