The world changed in early 2020. There’s no getting away from it. The coronavirus pandemic has had – and continues to have – wide-reaching implications. That’s both for individuals and for businesses. Everyone is going to have to get used to what’s increasingly getting called the “new normal”.
It’s critical, as a result, for organisations to evaluate their business strategy. They must understand if their present approach is still relevant. More than that, they have to devise a structure that’s most likely to steer them safely through the economic uncertainty created by the pandemic.
Depending on your niche, you may find that your pipeline’s a little thinner than usual. That makes it the ideal time to think long-term. With that in mind, let’s delve into the critical subject of business strategy.
Defining and Tailoring Strategy
Either formally or informally, all businesses look at strategy. It’s just good business sense. Larger organisations may perform strategic reviews or draw up physical strategy documents. For smaller companies, things can be more casual.
However they approach business strategy, organisations often repeat similar mistakes. Too often, a board or a founder thinks of a strategy review as a one-off, occasional task. It simply mustn’t get thought of that way.
Strategy must be something that always impacts everyday operations. If you have a strategy document, it should be a living and breathing entity. It must change with the daily fluctuations of business. Strategy isn’t something you think about once a year or even once a quarter, and then put aside.
In the same vein, business strategy should also be a shared endeavour. It’s tough to define and implement a well-rounded strategy if it only exists in your head. All stakeholders in your firm must play a part in devising and implementing strategy. It can also help to seek guidance from outside. That may mean an external board advisor or non-executive director.
Whoever you involve in the process, to define a strategy, you also need a specialised toolkit. Good structure and robust processes are vital to setting a clear plan. It’s management tools that give you that framework and organisation.
Three Essential Tools to Build the Right Business Strategy
There are a multitude of tools you can use to help define and tailor your business strategy. We’re going to share three of the most useful. With SWOT analysis, crisis strategy assessment, and MOST analysis, any firm can chart a successful course. So, with further ado, let’s discuss each tool in turn.
SWOT analysis the simplest of our three tools. It’s still, however, a critical part of your business strategy toolkit. As you probably know, SWOT stands for:
Essentially, SWOT analysis is a tool to aid brainstorming. The stakeholders in your firm come together as a group and share their thoughts and ideas. Ideally, you’d have a facilitator – who may be a non-exec director – to help keep the session on track.
Your brainstorming group is looking to identify items for each category of the SWOT analysis. That means the internal strengths or weaknesses of your company. It also encompasses external threats you’re facing or opportunities you might grasp.
You might choose to arrange the ideas that you come up with in a grid like that shown below:
As with all brainstorming, in SWOT analysis, diverse ideas should get welcomed. That means creating the right environment for sharing them. Everyone should get encouraged to share thoughts off the top of their head. There must be no fear of criticism when they do so.
When your group starts to run dry of ideas, it’s time to analyse what you’ve got. Try to group together the items in each category and identify common denominators. Are there, for instance, two or three significant issues that together explain your list of 10 or more weaknesses?
By doing this, you get an idea of the most critical issues impacting your firm. You can also get a sense of scale. You know how weaknesses and threats stack up against more positive impacts. That puts you in a better position to define the right strategy for you.
We’ll come back to the ideas you’ve developed in your SWOT analysis a little later. They’re relevant to the third of our tools. For now, though, let’s turn our attention to crisis strategy assessment.
Crisis Strategy Assessment – developed in-house by Boardroom Advisors Ltd
As its name suggests, this tool regards assessing the impact of a crisis – any crisis – on your business. In essence, it’s about asking yourself the right questions and developing the answers. An excellent way to approach this is to start with a broad focus and gradually bring things back to your organisation.
So, begin by defining the crisis in one sentence. You won’t be able to get specific with such a short definition, but that’s not the point. Then, start listing the changes in the world that will result from the crisis. And we mean the whole world. Not just for your business or even in the business world; in THE world.
For each change, you can then begin to narrow your focus. Ask yourself what impacts a change may have on business or commerce. Then, look at your industry or niche. Finally, you can then bring things round to your company specifically. You need to ask yourself a range of questions and seek the answers. Here are just a few examples:
- Will the change you’ve identified mean you have to change your value proposition?
- Will you need to start targeting a new audience?
- How might your relationship with existing customers change?
- What will be the impact on your human resources? Will you need fewer staff?
- Will you need to restrict your budget or change how you spend?
As you can see, the questions are comparatively straightforward. Some, too, you won’t be able to answer definitively. When that’s the case, you’re looking to make an educated guess. By doing so, you’re better placed to define a business strategy to steer you through a crisis, and out the other side.
So far, so theoretical. We’ve covered two tools to help you better understand your business and where it stands. We’ve not dealt much, though, with practicalities or implementation. That’s where our third tool comes in.
The most significant benefit of MOST analysis is that it gets down to brass tacks. At the end of it, actionable items and tasks get added to your team’s to-do lists. At the outset, a MOST analysis looks pretty similar to SWOT. You start, after all, with four categories once again:
In this case, though, it’s better to think of these as four layers or levels. You work through them from top to bottom, beginning with mission.
Often, defining a business mission takes up most of the time devoted to MOST analysis. That’s because you must be specific and hard-nosed. A wishy-washy statement like “we want to be industry leaders” doesn’t cut it. You need to define clear timescales and definite goals you want to achieve.
For the purpose of MOST analysis, it pays to stick with sales and profits when defining your mission. There’s likely to be more to your mission than that, but it’s best to take this high-level focus. Try to understand your present financial situation. Then, think about where you want it to be at the end of the given timescale.
Precise missions will differ by organisation. What’s crucial is to gain consensus. Make sure your board, team, and other stakeholders are on the same page. With agreement on your business mission, you can now turn to objectives.
Your objectives are the key planks you’ll build on to achieve your mission. Identifying those crucial aspects isn’t straightforward. But, you can turn back to your SWOT analysis to help you. We did say we’d circle back round to it.
You can use what you identified through SWOT to define your objectives. For instance, by solving one of the key weaknesses you identified, you may move closer to achieving your mission. Alternatively, you may reach the same ends by grasping an opportunity you pinpointed.
Before we move on to strategies, you need to apply the acid test to your objectives. That is to ask yourself if they truly will move you closer to achieving your mission. The simple phrase “which will” can help here.
Add “which will” to the end of an objective, and then complete the sentence. That lets you predict the impact of meeting the objective. Work through as many “which wills” as you need until you end up with “which will help us achieve our mission”.
By now, you may have something like a dozen objectives. It’s now time to discover your options for achieving them. That’s key; strategies are options. They’re the routes available to you, to work toward your objectives.
We’re back, therefore, in brainstorming territory. Get your stakeholders together again and blue-sky the things you can do to achieve each objective. Once you have your list of options, delve into each one, and assess its viability.
It’s here that you must make a decision. You’re defining the route you’re going to take to achieve each objective; it’s not theoretical. That may mean reaching a consensus on one or two of the potential strategic options. It could be pulling all options together into one well-defined option.
Either way, make sure to keep a record of the ideas you disregarded or opted against adopting. You may wish to circle back to them.
Your tactics define how you’re going to put your chosen strategies into action. What activities or processes need to happen to enact each strategy? There’s likely to be several tactics for actioning each one.
What you need to keep in mind for each tactic is ownership and timescale. When you identify a tactic, think of who will organise or be responsible for it. Also, consider by when it must get completed.
When we reach this part of MOST analysis, you’re adding real jobs to individual’s to-do lists. You’re not merely defining your strategy; you’re implementing it as part of the same process. That’s one real beauty of MOST analysis.
Another strength of the tool is that there’s a “self-check” aspect. You drill down to individual tactics and give ownership of each to a member of your team. That person knows what they must do and by when it must get done. It keeps the overall business strategy as part of day-to-day operations.
You won’t know at the outset that your tactics are definitively the correct ones. Continual review, therefore, is critical. Keep going back and looking at your tactics, strategies, and even objectives. Ask whether the path you’ve taken is genuinely moving closer to your mission. If not, revisit some of the other strategies and tactics you brainstormed.
Download the business strategy toolkit now.
Business strategy is a living, breathing thing. It can and should evolve continually. With the right tools you can keep moving in the right direction.