What you think is your business strategy might actually be a to-do list or compilation of your goals. Although the two are similar and influence each other, a business strategy and a goal are separate things that can take you down different paths. Once you realize how they’re different and begin to hone in on your real strategy, you’ll notice an impactful change in your business. You will make decisions with greater confidence because you’re guided with solid direction, and you’ll begin to create a recognizable space for yourself in your industry.
The Difference Between a Goal List and a Clear Strategy Statement
New business owners make the common mistake of creating a list of goals when thinking about their strategy. Goals are what you hope to accomplish and what you strive toward. They can represent milestones and stepping stones along the way to achieve a larger overarching goal. A strategy, on the other hand, illustrates how you’re going to get there. Strategy drives a to-do list. It directs what to prioritize and and what to leave off your list.
Examples of tasks that new business owners mistake as strategies but are actually goals, objectives, or statements of intent:
– Growth
– Boosting product sales
– Expanding into other markets
– Optimizing ROI
These aren’t taking the customer into consideration, mentioning the value proposition of the company or how the company is different from the competition. It’s no secret that Dell Computer is focused on selling quality computers direct to individuals and organizations. Though they have many divisions and list of goals and to-dos, they are grounded in that core strategy.
What Defines a Clear Business Strategy
You should be able to summarize your business strategy in under 15 words. A business strategy statement may mention your target customer, identify the value proposition, and explain why the value proposition is different from your competitors. Declare what you want to offer and in some cases what you DON’T want to offer, clearly knowing what you don’t offer saves your business time and money.
Some businesses write hundred page document for their business strategies, however it’s better to write a clear strategy in just one page that you can summarize in sentence or two. The problem with longer documents is each person tends to interpret it in his own way and often leaves with a different strategy in mind than another person. Clarity can be lost in a document that’s too long. For instance, Southwest Airlines has a ruthless focus on being THE low-fare airline and a dedication to highest quality customer service.
How to Create a Business Strategy
First, determine which stakeholders you rely on for success . . . how do you make money. Then, work through if you’re really meeting their needs and defining their needs. What your target customer wants from you only, how does your business serve them as a competitive advantage? And then ask, what you want from them? Use the information you’ve gathered from a strategy thinking session to begin shaping a strong strategy statement.
Amazon is another great example. Amazon has a technology strategy to provide a broad selection, good price and excellent service. Their strategy is concise and simple and helps direct the company on priorities.
Developing a business strategy is simple when you understand what it is, why it’s important, and how to create one. Don’t make the mistake of essentially creating goals and to-dos when you write a business strategy. Remember that the strategy is what will lead to the formation of relevant, targeted goals. Aim to make your business strategy as clear as possible and condense it to a statement. That way, everyone in your organization will be on the same page and understand the ultimate mission for company.
You can find more than a dozen company examples of a focused strategy and their subsequent success in one of the most read business books by Tom Hall, Ruthless Focus.