First of all, let’s begin by defining what business is and what a strategy is before we define what a business strategy is. Business is the practice of making one’s living by engaging in commerce and a strategy is a plan of action or policy designed to achieve a major or overall aim.
What is a business strategy?
A business strategy is an overarching plan of action to achieve a commercial goal. Some companies want to hit $1 million in revenue annually while others may want three more clients per year for the next five years. The goals vary per organization, but a business strategy is needed for all of them to complete their various aspirations.
How does business strategy help organizations?
Business strategy helps an organization layout short- and long-term goals with concrete objectives. These objectives give team members and managers alike the ability to track their progress and see the difference over time. Without a business strategy, everything can seem important, and this makes all things unimportant.
Who is a business strategy for?
The business strategy has an impact throughout an organization and requires everyone to contribute to its success. It is not limited to the upper management who hand down the stone tablets to deliver the message to the rest of the organization. Everyone needs to be on board if the strategy is to be successfully achieved.
There is no bottom-up or top-down to strategy. The desired culture of the organization should represent its strategy, along with realistic methods to get there should the culture need changing.
What are business strategy processes, practices, or methodologies?
Any process or practice that takes forward the organization’s goal is a methodology that can be used to implement a strategy. These vary from organization to organization. Some may have a scientific approach to each and every step along the way, while others are more flexible.
Creating these methodologies and practices has benefits. Some tasks can be based on science because they are repeatable and predictable. Production processes come to mind, as the same product is being produced over and over again. Trying to pin down the science of making the best product for the least cost is beneficial. Determining how a worker can optimally perform his or her job is less of a science and more of an art. The human aspect interrupts the data.
Every day, each decision you make should forward the business strategy. There will be conflicts along the way or exceptions to the rules but staying the path is important to executing a strategy. Zigging and zagging at every turn causes confusion and causes a lack of buy-in from team members.
Business strategy and goals
Goals are designed to be reached. It helps those goals become attainable. Strategy keeps a plan in place and helps drive decision-making. It helps answer the question ‘Why?’ Why are we doing this instead of that? Because our strategy states we want X to happen, and this action helps us get closer to that goal. Having a strategy helps explain the purpose and gives workers insight into how their individual role contributes to the wider organizational goals and ambitions.
Realizing goals and accomplishing great heights is the maximum benefit of business strategy. Say you want your product in 100 retail stores. You develop a marketing strategy to get the word out. You develop a production strategy to ramp up production based on the increase buy rates. You implement this strategy to realize the goal of 100 retail stores. Once you reach that goal, you change the strategy to reach the next goal. The point is that strategies can be flexible and adaptable.
How does business strategy impact success?
For a business strategy to succeed, the culture of the organization needs to align with the strategy. Clearly defining your strategy helps people understand the end goal. Setting criteria allows employees and team members to understand the progress that is being made.
Set clear goals that support business strategy
A sales goal is set to not only motivate team members to strive for next-level goals but also make these goals concrete. Abstract targets lead to misinterpretation. A goal can be getting ready for tenants to move in as soon as possible. That timeframe in the goal leaves too much gray area to be effective. ‘As soon as possible’ can be today or it can be a week out pending availability.
Getting ‘make-readies’ done within three days of receiving the work order places a concrete time and date on the task. Anything that can be measured can be managed. ‘As soon as possible’ cannot be managed. Everything becomes a priority with that order. ‘Within three days’ can be managed. You can schedule crews for that end date and allocate resources accordingly.
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Christopher Cook, PMP, MSPM, has an extensive career in the construction industry. Throughout his career, he has been awarded over 40 construction projects that have yielded a 10% profit for each organization. He has a Bachelor’s of Science in Industrial Technology Management with an emphasis on Building Construction Management and Master’s of Science in Project Management. To find out more about him visit EntrePMeur. Christopher writes about strategy and cost management.