How to create a successful business strategy?

4-step process to create a successful business strategy

It’s easy for business owners to get lost when it comes to creating a business strategy. We constantly hear that a strategy must have a vision statement, oh, and a mission statement too. Not forgetting strategic objectives and long-term goals — at times, it all gets a bit much.

What is required is a simple approach to creating a business strategy for business owners and managers alike. That’s what I’ve created here for you now.

Before we get to this 4-step process to creating a business strategy, it’s worth understanding what a business strategy is.

What is a business strategy?

For many businesses, there is a lack of understanding of what is a business strategy. A great place to start is with the dictionary definitions of both these words.

The dictionary definition of the word business is certainly revealing.

An organisation or economic system where goods and services are exchanged for one another or for money. Businessdictionary.com

This definition of business brilliant in its clarity. Its simple meaning reminding us of the essence of business.

The dictionary definition for Strategy is as follows.

The Google search result for the definition of the word Strategy

Author Screenshot — Google Search result

A simple Google search reveals the answer, a plan of action designed to achieve a long-term or overall aim.

By combining the two words we now see how business strategy comes together. The ‘business’ element providing the operational framework to the strategy, as well as framing the outcome or aim.

The Power of Inversion

Some of the world’s greatest thinkers & problem solvers use inversion in their quest to solve hard problems. As this brilliant article on Inversion explains it can also help avoid stupidity as well! Inversion in this instance allows us to simplify and create the foundations of our

4-step process.

Firstly, let’s break down the strategy into bite-size chunks.

A (plan of action) (designed) to (achieve) a (long-term or overall aim).

I believe that many businesses fail with creating a business strategy because of the definition of the word strategy. The definition suggests that a plan of action needs to be designed to achieve a long-term or overall aim. All too often, the plan of action becomes the focus, with little thought applied to the goal. Think about something simple like a car journey. How can you plan your journey if you don’t know your destination?

If I use inversion and turn the strategy definition on its head — we get something very different.

(Long-term or overall aim) (achieved) by (designing) a (plan of action).

Inversion now gives us a logical path to follow. If we apply the inverted definition to our car journey, we start with where we want to travel to (overall aim). We can then decide upon the method of transport we will use (achieve). And assess the route (design) to create a safe and quick path for us to follow (the plan of action).

4 Steps to creating a successful strategy in business

For me, this is a logical and easy process way to create and build a business strategy. It breaks the complex process of creating a strategy into 4 simple steps. Let’s follow them through — remember to commit each section to a strategy document.

1. Decide upon a Long-term or overall aim within your business by creating a diagnosis.

A diagnosis is the first step in building your strategy. You might be asking what’s a diagnosis? A diagnosis is an assessment of the current position your business is in, both in isolation and within its chosen marketplace. In effect, it’s a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). It allows you to define what you know to be true, thus preventing wildly outlandish business goals.

It should help you focus on exploiting your value proposition. This is something that your business offers that really benefits customers and ideally your competitors don’t offer.

Your long-term aims can then be more logically set once you have this all this information within your diagnosis.

2. How will you achieve this long-term or overall aim?

Once you have your diagnosis you then come to the stage of writing a guiding policy. In practical terms, a guiding policy is a simple statement that defines the long-term goal with a summary of how the business will achieve this goal. Remember, this isn’t the plan of action. This is just a statement that provides a guide on what your business will do.

3. Consider the Design of your action plan.

How can you most efficiently deliver the guiding policy for your business strategy using the tools you have?

The process of design is often understated as it should play a critical part in the creation of any strategic plan. The steps that form your action plan should be coherent — as in they should be linked together — building momentum towards your long-term aim. When individual steps don’t align with each other, momentum is lost — which can de-rail your strategy. Hence, why design is another important part of the process. It empowers you to identify and understand the steps that will allow you to maximise any points of leverage.

An example of this might be having a team of sales reps out visiting 5 or 6 customers a day when an email campaign with a telephone follow up could achieve the same with less cost and less time.

4. Create a plan of coherent actions — a plan of action.

Coherent actions detail the ‘how’ in the business strategy document. It’s about taking the lessons from the design stage and creating a meaningful plan. You’ve got your guiding policy and your thoughts from the design phase. You should now be able to write out the detailed actions that need to be taken. The detail contained with the plan of action enables everyone within the team to know what they’ve got to do. It is an essential part of what it takes to deliver a successful business strategy.

How to create a business strategy

I think it’s worth just pulling this together because what we have is a 4-step process to creating a business strategy.

1. Decide upon a Long-term or overall aim within your business by creating a diagnosis.

2. How will you achieve this long-term or overall aim? What’s your guiding policy?

3. Consider design. How can you most efficiently deliver the guiding policy using the tools you have?

4. Create a plan of coherent actions — a plan of action.

Remember, this has all come from the definition of strategy and inverting it. For me, it’s a great demonstration of the power of inversion. It’s a great tool to use when solving hard problems.

This 4-step process is designed to give you a simple and logical path to follow when it comes to creating a business strategy. If your business is struggling to make progress with creating a strategy, then please use this process I have mapped out.

How do you set about creating a business strategy which works for you?

The linkage website

https://strategyforexecs.com/business-strategy/