There’s so much written about business strategy but it boils down to two things. Firstly, working through a simple, logical method and secondly adopting the right mindset whilst creating it. Get these right and you’ve got a decent chance of success.
Let’s explore each in a bit more detail.
Method
Influential writers on business strategy tend to break down the method into 3 stages. The language they use and the tools they adopt can vary, but the approach follows this pattern.
Stage 1: Diagnosis
Before you create the plan there’s a diagnostic phase. It seeks an understanding of what’s happening in your market. It’s an attempt to make sense of the many complexities that are in play and assess the implications that emerge.
There are many business tools available to help us do this, such as the SWOT Analysis, Porter’s Five Forces, the Fishbone Diagram, the Purchase Funnel. Some are more popular/fashionable than others. Pick and mix the ones you like best.
At the end of this stage, you will have achieved a detailed understanding of your market. You will also have highlighted the key obstacles to achieving your Vision.
Stage 2: Set Direction
Here, you start to make decisions. You’re setting out the guiding policies and strategies you're going to adopt. For example. Who are you going to target? What markets are you going to focus on? What’s your channel strategy? Here, you’re also setting objectives and goals.
Equally importantly you’re deciding what you’re not going to do. Don’t be tempted to spread your resources too thinly.
Stage 3: Execution
Here, you’re getting into the details - the tactics, timings, budgets and the KPIs. It’s a way of making the decisions from Stage 2 come to life. It’s what your consumers will experience and see. If you’re creating a marketing plan, go back to the 4Ps. (Product, Price, Place and Promotion) It’s still the best way to organise your activities.
Make sure there are clear and obvious linkages back to the decisions you’ve made in Stage 2. If you can’t see the connection, eliminate the activity.
And that’s it. 3 steps to a great plan.
Mindset
Having a great method is the foundation, but you’ll need to adopt the right mindset to deliver a great plan. The mindset you adopt will shift depending on which stage you’re working on.
During Stages 1 and 2 Adopt a Critical Thinking Mindset
This is all about using logic and data to inform decision-making. Too often we rely on intuition and gut feel, which can result in poor analysis. Critical thinking is particularly important in Stage 1, the diagnostic phase. Here, you should question your assumptions, look at a wide range of data and interpret it with an open mind. This will help you mitigate against your biases and form well-structured arguments.
When you’re making strategic decisions in Stage 2, be open and rational. Listen to other people’s points of view. Be willing to change your mind if you feel their arguments are strong enough.
During Stage 3 Adopt a Creative Thinking Mindset
Be creative in the way you execute your plan in stage 3.
Be resourceful and question everything. Ask yourself. Who is willing to help and support you for little / no cost? Are there any interesting partnerships worth exploring? What ideas have never been tried before? What experiments could you try out? Which activities are you prepared to over-invest in? Which ones should you drop completely?
In Summary
To create a business strategy adopt a classic 3-stage method using the tools and frameworks that you feel most comfortable with. Make sure you’re in the right frame of mind for each stage. Critical thinking is particularly important in stages 1 and 2. Creative thinking is particularly important in stage 3.
Creating a business strategy is challenging but exciting. Enjoy the journey!