In strategy, it is important to see distant things as if they were close and to take a distanced view of close things”—Miyamoto Musashi, legendary Japanese swordsman
COVID-19 pandemic has changed how businesses are strategizing their operations. Many businesses are still trying to adapt to the swift changes thrust upon them due to unforeseen consequences. Almost all the business conversations are being conducted online while many small and medium scale businesses are still in the process of the end-to-end digital transformation of their value chains. In such a scenario, it has become vital for businesses to understand the right way to build an optimal business strategy that can help them to reduce the incremental costs, bring efficacy to their operations, maintain proper relations with all the stakeholders, and optimize their cash flows.
However, there are certain challenges that businesses need to address to develop a strategy that can help them reach their business objectives. The key challenges to building the right business strategy are listed below:
- Scattered flow of information – Proper knowledge of the business and information flows is essential for developing the right business strategy. Businesses need the right information from the right source in the right form for making strategic decisions. However, the sources of the information being scattered across the value chains make it a challenging task for businesses to gather and collate the information that might be required for developing a business strategy.
- Coordination with multiple teams – Businesses might have multiple parties collaborating spread across varied geographical locations. Improper communication channels make collaboration a daunting task for individuals and teams involved in developing the business strategy. Businesses need to set up the right communication channels to eliminate any barriers that might hinder the flow of the business process.
- Finding the right people – In any organization, people are the drivers of change. No strategy can be developed and implemented successfully if the individuals and teams involved in the process lack the knowledge and skills required to drive the change at scale.
- Overshooting the allocated budget –No strategic decision is devoid of associated costs. Inefficient handling of these costs might falter the pace of strategy implementation. Businesses need to stick to the allocated budget and find the right tools and resources within the budget which will help to implement the planned business strategy effectively.
- Resistance to change – To start the process of developing a business strategy, businesses must first be adaptable and open to change. In the business world, change is the only constant. In a world that is technologically leapfrogging from one advancement to another, only the businesses which quickly adapt to these demanding advancements survive. Yet, many businesses are still stuck in their old ways and resist these changes.
Process of Building and implementing business strategy
To address the challenges posed by both external and internal factors businesses have to put in place robust business processes which can help them build and implement an effective business strategy. The steps involved in building such a strategy are listed below:
- Building a Team – In this step, businesses scout and recruit the right talent – individuals and teams from varied backgrounds and complementary skills who can help them in the development and implementation of their business strategy. A proper communication channel is then established for the team members to connect without any barriers.
- Understand the Information Flow – the members of the strategy team then try to collect the data needed from multiple sources scattered across the value chain to build the strategy. This involves meeting the key people in the business including but not confined to CEOs, CTOs and CFOs. This data is then transformed into useful information and is mapped against the existing processes to understand the flow of vital information which is needed for making business decisions. All the value-added and non-value added activities are identifiBusiness Strategy Expert, Business Strategy Expert Australia, Business Strategy Expert Sydney, Business Strategy Agency, Business Strategy Agency Australia, Business Strategy Agency Sydneyed and the key challenges that businesses need to address are identified during this stage.
- Identifying the Key Objectives – The challenges identified in the previous step are transformed into specific business objectives in this step. The purpose and the need to attain these objectives are listed in detail. Also, the strategy team might build a list of expected outcomes along with the timelines against each objective.
- Strategizing the Process – If ‘why’ of the strategy is answered in the previous step, the ‘how’ is answered in this step. All the activities that can be done to attain the key objectives listed in the previous step are designed, the processes are modified, and the changes are communicated across all the departments of the value chain.
- Simulating the Process – Before implementing organization-wide changes, businesses may choose to simulate the proposed changes in a controlled environment, where the results can be studied, modifications if any can be made, and then the final strategy can be prepared.
- Implementation – In this step, points of contact responsible for implementation are identified in each department and the processes designed as a part of the new business strategy are implemented. The results of the implementation are constantly communicated to the strategy team to study the progress of the implementation.
- Handling Post Implementation Challenges – Even though businesses take all the steps in the right direction, there might arise certain deviations and exceptions, which are handled in this step by specialized support teams.
Key points to consider
- Never compromise on Cash flow – A profitable business is not the same as a cash-rich business. Budding businesses may need more cash to maintain the required amount of stock to meet the demand, make strategic hires, and spend on new technology. Hence, businesses need to keep track of their cash balances, and inflows and outflows of cash at all times. Whenever a business is planning to implement a new strategy they need to understand where the cash is going and why.
- Eliminate non-value processes –To gain an edge over competitors, businesses must constantly focus on improving their business processes to shorten the lead times and expected delivery times. The best approach here would be to identify all the Non-Value Added activities and implement the lean methodology to eliminate them systematically. Lean can be applied irrespective of the industry vertical and business process.
- Execution is more important than planning – Building a strategy is only the starting point, the real success lies in the effective implementation of the proposed strategy. Again, the right individuals and teams who understand the need and importance of the change must be put in charge of the implementation to bring the strategy to fruition. Depending on the size of the business any new strategy might take anywhere from 3 months up to a year to yield the expected results.
- Be adaptable and open to change – Businesses must always have a mechanism in place to study, analyze, and act on changes in the external environment that might impact the performance of their business. Being agile is the new normal.
- Find the right partner – Building an in-house strategy team is often time-consuming and expensive. It advisable for businesses to hire a partner in the form of consultants and industry experts who can help them in building and implementing the business strategy. This is easier said than done. Within the available budget choosing the right fit holds the key for effective strategy implementation. To get the most out of their external partner, businesses have to engage with them constantly and support them with the right tools, people, and infrastructure. Constant feedback is essential to ensure the smooth functioning of the alliance between the partners.
- Choose the right technology – Technology should augment human efforts and not act as a hindrance to the process. Technology integration if done right can significantly improve the process of building and implementing the business strategy.
Below are certain simple tools that can help businesses to initiate the process of building and implementing a business strategy:
- Stakeholder engagement – It involves having interviews with all the key stakeholders involved in the business process to understand the pain points.
- Brainstorming – This is done by the members of core strategy teams to generate a pool of information and potential solutions for the business problems.
- Focused groups – Customers, Vendors, and business partners scattered across geographical locations are carefully selected and are interviewed to gain insights into the business processes and existing issues.
- Flow diagrams – These diagrams help the strategy teams to map and understand the existing workflows.
- The Cross Matrix for Strategy deployment – A Cross matrix helps businesses to understand the right combination of formulated strategy and the proposed method of implementation.
How to start and not stop at the end of this article piece?
I would recommend starting simply by just taking this approach, which has negligible risk, simple and yet an amazingly effective positive step towards our goal of a proactive strategy
A) Take pen -paper or manual method (start now)
Start tracking the progress of your Business, Products, and events against a defined milestone and benchmarks using simple tools like MS Excell(I know this causes efforts, but this will pave the way for a refined Business Strategy).
B) Take help from technology
Work towards making it unattended, assisted by using Super-fast digital solution such that it works autonomously without losing its efficacy by engaging a solid, affordable solution partner
If you are a CEO/COO/CIO/Managing Director/General Manager who is spending more time in reactive/preventive mode than future-facing, please reach out for an exploratory conversation.
My Contact details
Pradeep Mishra (Director and Co-founder)
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