No matter the size of your business, you should consider a strategy reboot. That’s especially relevant as we shift from response to recovery following the Covid-19 outbreak and businesses continue to face supply chain disruptions, travel interruptions and accelerating technology.
Strategy is simply an action plan to achieve a long-term goal. It defines how businesses operate, narrowing choices so they can determine their own futures. Having a clearly defined strategy fit for these turbulent times can be the difference between a business that merely survives and one that thrives.
How can owners and business leaders develop a contemporary strategy?
First, make sure your leadership team has clarity and alignment about where you’re trying to go and why. Understanding choices that will drive your business towards an agreed path or target is part of a coherent strategy. It’s important to identify a direction, ambition and purpose from the outset. While business leaders used to take a five-year view, in today’s uncertain world a three-year timeline may be more suitable.
Second, ensure everyone across the business is clear about the organisation’s objectives. Your company may have a different success lens than others. For some organisations, the next strategic objective will be profitability while for others, it might be attracting a different type of customer. Some businesses might be looking at diving into new markets. Define your strategic competitive advantage in those areas, and devise ways to sustain it.
Third, it’s important that everyone is part of the strategic process from the beginning. Failing to get representation from throughout the organisation may mean missing good ideas and cooperation from key people. Having your employees on board leads to inclusive decision-making, where downstream problems are solved early. It means leaders don’t have to re-explain priorities that team members have already helped define. No extra steps are necessary in the execution and adoption of the strategic plan, since they’ve already been accounted for during the formulation process.
Finally, stop doing activities that don’t contribute to your goals. The dividend from this is savings on time and money. You can reallocate that into something more meaningful, or take the win and bank it.
What are the key components of a successful strategy?
While the planning umbrella stretches across the organisation, not every component may need a strategy makeover. Your strategy reboot might focus on a single aspect of your business.
Digital acceleration, for example, may be at the heart of your business strategy. Businesses that successfully implement new tech systems can benefit from better operational efficiency. Another facet of strategy today is environmental, social, and corporate governance (ESG). Measuring ESG factors can help an organisation gauge its sustainability and societal impact and build trust with key stakeholders. Leaders at smaller businesses are at an advantage as they can then make changes quickly.
Having a coherent strategy means looking at how a master plan delivers on your ambitions. It provides clarity, direction, and a consistent basis for decision-making. It’s useful to people across the organisation to provide direction and inform choices such as investment and resource allocation.
How can a successful strategy help my business thrive?
PwC private business research locally and internationally shows companies with an up-to-date and coherent strategy outperform their competitors.
Not only do they shine financially, but they also excel in other areas including brand recognition, people engagement and sustainability.
The pandemic has changed business-as-usual. Businesses with a current and comprehensive strategy, formulated openly and in a collaborative way, are able to assess the environment against their strategy and make clear choices about opportunities and trade-offs. The days of a board drafting organisational strategy in a dark room are gone.
It’s about how organisations can operate efficiently and effectively, while including input from representatives across the business.
By Andrew Jamieson, Partner PWC New Zealand