21st February, 2023

Is Your Business Strategy Effective?

by Team Pinnacle

In preparation for a boxing match against Evander Holyfield, Mike Tyson was asked whether he was worried about his opponent’s plan. He famously replied that, “Everybody has a plan until they get punched in the mouth”. So often, our business strategy, or plan, can be like that fight plan – it looks good, it sounds good, and it is well-intended – but when stress-tested, it is ineffective.

What is a strategy? The oxford dictionary defines a strategy as, ‘a plan of action designed to achieve a long-term or overall aim’. However, with the prevalence of business speak, rolling news feeds and Instagram-able life and business journeys, strategy has become a big picture term that often fails to stir thoughts of action plans, long termism, and the achievement of goals.

Strategy development is often an extremely popular activity amongst leadership teams. A strategy day or workshop generates all kind of enthusiasm amongst its participants, however, at the conclusion , there is often a much smaller group of participants willing to actually develop and undertake the actions required to implement the new strategy. This is often where strategies fail  – without that action plan to make it a reality, it’s just a vision.

I believe that an effective strategic plan needs to be simple and concise, and that it should  cover four key areas: 1)Set the vision;2) Create objectives;3) Allocate Resources; and 4) Prioritise.

Business leaders should ‘set the vision’ by determining and agreeing the high-level direction of the organisation. They must understand where the business is going, what it will look like, how it behaves and what it stands for. Nowadays, values and behaviours are increasingly important to staff, investors customers and stakeholders. This includes your organisation’s approach to the environment and its commitment to sustainability.

Taking this a step further, to formulate an effective strategy, business leaders should  ‘create objectives’. These should follow the SMART model that many of us are familiar with – to ensure that they are Specific, Measurable, Achievable, Realistic, and Timebound.

Creating objectives allows us to ‘allocate resources’ by assigning them to ourselves or our team members, pledging financial support, or contracting others to support on delivery. Importantly, allocating resources, and measuring delivery, creates accountability.

Finally, we can ‘prioritise’ our activities and actions, managing our capacity and competence to ensure that those involved don’t try to do everything at once, and end up achieving nothing.

Creating a really great strategic plan is only the beginning of an organisation’s strategy journey. To ensure that the strategy is effective, and useful to the business, it is important to evaluate its progress (annually for most organisations), review it and be willing to adjust it at least every two years. Business leaders must also employ an agile approach and be willing to  react to market forces as required. This is especially important during times of crisis, like the Covid pandemic.

The American economist and author, Michael E. Porter once commented that, “The essence of strategy is choosing what not to do”. Many smaller or scaling businesses are keen to do everything right now . However, refining your business direction, your objectives, and your actions, and prioritising effectively, can lead to an extremely clear and well-defined  business strategy.

To find out more about Pinnacle Growth Group, visit: https://pinnaclegrowth.group