Do you know where you are taking your company and how you will get there? In this video I discuss why you must have a company strategy and how it is vital to growing your business.
Simply put, a company strategy is how you are going to reach your long-term goals from here. If
I need to get to San Diego from El Paso in the next couple of months, my options are almost
endless. If I wanted to, I could copy one of those Bike Across America guys and ride 20 miles
every day until I got there. But if my goal is to get to San Diego tomorrow, then my strategy
better include finding a flight or jumping into the car now for a 12-hour road trip.
At its most complicated, a company strategy is the unique formula for success that forms the
foundation of a business plan and governs day-to-day operations. This strategy is not a business
definition and summary of pertinent markets; it is an account of the one or two key factors that
distinguish the firm from its competition and are most expected to contribute to the firm’s longterm
success.
To be effective, a company’s strategy should be no longer than one page. For many businesses a
single sentence is ideal. The strategy should be easily and frequently communicated to
employees so that a cohesive business focus is always maintained.
Why develop a strategy? Your strategy helps you understand and properly communicate to your
investors, employees, and your customers who you are, what you do, and why you are the best.
It helps you understand who your best target audience is and discover the best way to reach
them.
By serving as a jumping-off point for annual business planning, your strategy will become the
nucleus around which an annual business plan is developed. It will also form a framework for
considering mid-term deviations from the plan. It will help set a consistent direction for key
functional areas.
A good strategy should endure year after year and tie one year’s business plan to the next. This
enables the company to easily build upon the accomplishments of the previous year. This does
not mean it doesn’t change or that once done, it should be stuffed in drawer to be forgotten. It
should be considered a “living” document that changes as your business grows and new
opportunities present themselves.
Without a clearly defined strategy, companies of all sizes tend to lose direction when they run
into temporary difficulties, or when management gets bored operating “the same old business.”
It is amazing to see so many very small businesses, after having had a few moderately successful
years, start adding completely unrelated product lines or services that only muddy their
identities. This tactic signals to customers that management has no clue as to what the nature of
the business really is.
If I haven’t sold you on the importance of a strategic plan, consider this: 79 percent of the
largest, most successful companies said that strategic planning was their most important and
favorite growth tool. One quick way to success is to see what the best of the best do and copy
them.
Can you quickly state your company’s strategy? If not, now is the time to start creating one. I
would recommend buying two books: The Plan-As-You Go Business Plan by Tim Berry and
Strategic Planning Kit for Dummies by Erica Olsen.
What Is Your Company Strategy?
Action Tips:
1. Re-read the article.
2. I would recommend buying two books: The Plan-As-You Go Business Plan by Tim
Berry and Strategic Planning Kit for Dummies by Erica Olsen.
3. Write down your long-term goals.
4. Decide how you will reach these goals. Your plan is your new strategy.