Every ambitious business needs a strategy for success. But can you state your strategy simply?
If you struggle to explain your business’ unique strategy in one clear sentence, you’re probably not too sure about what’s driving your objectives.
Simple is best for your strategy. The more complicated your strategic plan, the less likely it is that you and your team will understand it – and if you don’t understand the plan, how are you going to deliver on it?
Based on the ‘Seven strata of strategy’ pioneered by Verne Harnish’s Gazelles education and coaching program, here are seven tips for creating a strategy that’s real, genuine and backed by everyone on the team.
The seven strata of strategy
At the core of your strategy: values.
It matters who you are and what you stand for. And by taking the time to define your business’s values you can start to embed them directly into your long-term strategy for success.
Choose the words you want to own in your marketplace
In the world of digital business and online marketing, key words are important.
Whatever your sector or industry, decide on the key words and search terms that you want to own. And do your best to work these key terms into your website, your content and your online marketing.
For example, if you’re a veterinarian, think about utilising words like ‘vets’, ‘animal health’, ‘veterinary services’ etc. to improve your search engine optimisation (SEO) and create a defined focus for your business.
Offer a unique brand promise
This is the experience you are promising your customers that differentiates you from the competition. It’s a short, sharp reminder of why you are the business to choose.
For example, if we continue with the veterinarian theme, the brand promise may be ‘Treating your animals with the same level of care you give’. This may sound simple as a brand promise, but it allows you to set key performance indicators (KPIs) and measure team and company performance against these criteria.
Make it hurt to break your promise
If you let your customers down, there should be something set up in your internal processes to introduce an element of ‘pain’ to the business.
With the veterinarian example, if your company finds it’s not delivering on its service promise, you may choose to give the customer a discount for the next few visits. Give yourself an incentive to meet that brand promise every time.
Create a one-PHRASE strategy
Something that underlies your brand promise is a one-PHRASE strategy that drives your business model.
This isn’t a customer-facing strapline, but a simple strategy that drives everyone internally within the business. It’s an unspoken rule for your team to have ‘front of mind’ at all times.
For example, if you’re a local restaurant business, your one-phrase strategy may be ‘Making customers smile with food just like momma made’. Keep it short, keep it snappy and (importantly) keep it in the family.
Support your one-PHRASE strategy with differentiating actions
To help deliver your one-PHRASE strategy you need a set of specific actions that explain HOW you’re going to differentiate yourself from your competitors.
It’s best to keep your actions simple, but these internal tactics create a unique experience for your end customer that they can only get by choosing your product or service.
If we use the local restaurant as an example, their differentiating actions could be:
- ALWAYS deliver the customer’s order within 20 minutes of the initial order
- For every 5 minutes the order is late, deduct 5% from the bill
- Free soft drinks for all children dining with their family (or maybe fruit drinks, so you aren’t in trouble with their parents!)
It’s these differentiating actions that mean a family dining at the restaurant get their unique experience, while also giving an incentive for the waiting staff to deliver the food on time. Happy faces all round.
Establish your ‘X-Factor’
It’s important to hold on to your competitive edge. And to do that, you need to highlight where you have a clear competitive advantage over your competitors.
Again, this is information that’s only for you and the team (not a marketing angle). These are the ways you believe your business is the leader in the marketplace. And by identifying your competitive advantages, you can play to these strengths.
So, if you were running a hardware store, for example, your X-Factor may be:
- More branches state-wide than any other hardware store.
- The widest range of power tools in your sector.
- Fastest turnaround on deliveries for trade and construction customers.
- A year guarantee on all hand tools bought from you.
You get the picture. These are the things that make your business shine more than the competition. And if you know what makes you shine, you can keep focusing on being the brightest and best.
Measure your profit per X and BHAG
Ambition is what drives the next step in your business’s development. But there are two key elements that provide the way to measure how the business is performing against your core ambitions and goals.
Understanding the financial model that fuels your business is so important. And that’s why the business leader and writer, Jim Collins, came up with the ‘profit per X’ term to help aspiring business owners consider and define the key driver behind their model. In short, your profit per X is the KPI for the whole business. It’s what powers your economic engine. It’s the number that tells you whether you’re firing on all cylinders (or in need of a quick stop to the mechanic’s shop).
That KPI will be different for every business. It may be your net profit per month, or it may be a percentage of customer growth. But once you know it, you can measure it.
Closely linked to your profit per X is your ‘Big Hairy Audacious Goal’ (BHAG). This is your BIG dream for the business, whether it’s an aspiration to open five more stores in the next two years, or whether it’s to increase turnover to $1m dollars in ten years.
Having your BHAG written down and clearly communicated gives you an objective. And with an objective and a strategic plan in place, you can easily measure your performance over time against this audacious goal.
Talk to us about defining your strategy
If you’ve got the drive and the motivation to take your business to the next level, that journey becomes a whole bunch easier when you have an experienced business coach on your side.
Get in touch to talk about setting up an Awesome 8 strategy session with us. We’ll review your existing financials and business plans to help you create a strategy that has success built in from the ground up.