Why strategy is so fundamental for business success

A business without a strategy goes nowhere!

Strategy is vital – everything else that happens in the business is, or at least should be, subordinate to the strategy.  In its fullest and most complete form, strategy encompasses everything the business does today and will do in the future – at least during the lifetime of the strategic plan.

Military strategy – the original

“The science and art of command as applied to the overall planning and conduct of warfare” – may seem a long way from running a business but the principles are the same.  Just as in war, strategy in business needs to be holistic. A good strategy will embrace the realities of the current situation, marshal and make best use of all the available resources, recognise the disposition and strength of the enemy. The strategy brings all the available forces and resources together in a coordinated way to focus on securing specific goals.  Strategy must therefore based on sound intelligence and accurate, objective assessments of all the very many factors at work. Developing a sound strategy requires a sound understanding of how all the various parts of the organisation function, interact with customers and can support and complement each other.

So, what goes wrong?

In small businesses a number of things can get in the way or go wrong.  Most commonly:

  • The owners are so busy they cannot find the time to develop a strategy – which makes for a very reactive operation that is vulnerable to competitive activity
  • The owners, especially during the good times, see no value in developing a strategy. So, “It’s a waste of time when everything is fine anyway!
  • The analysis of the market situation or competitive position is incomplete or inaccurate – or perhaps simply out of date because the market has changed while the business has not. Flawed information will always produce a flawed strategy
  • There is not enough information about the current performance of the business to make sensible judgements about where to focus activity – so effort goes into areas that yield the wrong results
  • The strategy exists only in the head of the owner – so the staff do not understand their roles in delivering a successful outcome – and energy is dissipated
  • Often, the skills needed to develop a strategy and take true control of the business are not sufficiently well-developed within the company but owners are reluctant to seek help or guidance

It should be clear that developing strategy needs to be an objective, dispassionate and analytical process.  So, it is no surprise that not everyone will have the skills and experience the job requires.  It is probably the biggest single topic where small businesses will derive the greatest long-term benefit from engaging with an external advisor.  You can read all the books by all the experts but the biggest problem for the business owner is securing enough distance from day to day operations to achieve true objectivity.

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About Bob Brown

Helping business owner to grow and transform their businesses in preparation for a successful exit, transfer control to a new management team or the next generation. Work with owner/managers over time to develop and execute their exit strategies.

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