Strategy for Smaller Businesses

A strategy is a set of decisions on where you want your business to be in the future, in line with your company’s mission.

A strategy is usually created in a strategic planning process by the senior leaders of an organization. Models that involve employees in developing strategies are on the rise and seem to pay off.

How do you know your strategy is the right one? Well, you don’t. But with some clear strategic goals, you avoid the confusion that prevents many companies from growing. Or to phrase it differently: “We might be wrong, but at least we’re not confused.”

How do you get there?

How do you make your strategy a reality?

Roadmap

The roadmap is your first step in executing your strategy. It defines where you are right now, where you want to be according to the strategy and then describes which milestones you need to reach to get to where you want to be.

STEP 1: DEFINE WHAT’S NECESSARY

To create a roadmap, make a list of things necessary in your strategic target state. To guide this, stick to the categories: People, Processes, Tools and Partners.

STEP 2: WRITE DOWN WHERE YOU ARE TODAY

In the next step, you define where you are today. Again, it makes sense to stick to the categories.

STEP 3: DEFINE AN EFFECTIVE WAY TO CLOSE THE GAP

Now create the actual roadmap – a high-level execution plan on how you will close the gap between today and your strategic goal. This road-map will be the basis for goal-setting for your organization and successful strategy execution. The roadmap will always have a time component to it as it lays out the milestones in a chronological way.

STEP 4: OBJECTIVES AND KEY RESULTS

Use the milestones identified in the roadmap to lay out the most critical tasks for the next three months. An excellent tool for this is Objectives and Key Results (OKRs). You are breaking down the 1-to-5-year horizon into manageable steps of three months. This clarity will help your team to set the right priorities. You will have to handle your regular business in parallel while working on strategy implementation. Staying focused on three topics per quarter will make sure your resources are used most effectively.

People

ALIGNMENT

You want your team moving jointly in the new direction. You must be able to transport the message of why the new set of strategic goals is important for the company. Your team needs to have a deep understanding of the strategic roadmap. Senior executives and team managers need to communicate the meaning of the strategic initiatives over and over again in team meetings. Provide insights into how the strategy execution process is going, where you stand and what the next steps are. The more visual, the better.

TRAINING

As for any change process, training your team is a powerful tool to ensure effective execution of your strategy. There are different training demands that arise from a strategic shift.

• Make sure everybody has an in-depth understanding of the strategy
• Create the capabilities and expertise that might be necessary but missing as per your roadmap
• Executive education to develop the right leadership skills across all management levels

REWARD MECHANISM AND INCENTIVES

When you change your strategic direction, the way you incentivize and reward your team might have to change as well. Make sure your strategy is reflected in your compensation components as well.

ORGANIZATIONAL RESTRUCTURING

Your new strategy might make it necessary that you restructure your teams. Let’s say you want to diversify your product offering for your two main customer groups, it could be a good idea to change from a functional structure to a divisional structure.

RECRUITING

When you need new roles or new employees, create a recruiting roadmap that is in sync with your strategy execution roadmap.

Resources

Your organization’s ability to effectively execute your strategy not only depends on your people, but also on the way you distribute resources. There are two possible implications.

WHERE YOUR RESOURCES GO

You might need to reallocate resources from one topic to another which is more important for your strategy. Make sure you cut budgets that don’t have relevance for your new strategy. That can be painful for the teams, but with the right people measures, the change will be easier to digest.

HOW YOU DISTRIBUTE RESOURCES

Depending on your strategy, it’s possible that you have to change the way resources are distributed. Where it is a top-down budgeting approach today, you might want to switch to a more autonomous and agile approach to enable your product teams to develop products quickly. This all depends on what your strategic goals are.

Measure Success

Last but not least, while executing on your strategy it makes sense to measure your success frequently. This will enable you to give feedback back into the organization, showcase the successes on the way and keep engagement up. And of course, you want to know if your measures are paying off. Share the progress widely and in graphical form, e.g. as a big printout of your roadmap and an up-to-date dashboard of your measures. Also, use the quarterly OKR workshops to communicate progress.