Ok, so most people understand the importance of developing a business strategy.
Companies need to set goals and objectives for the next 2 – 5 years so that informed business decisions can be made around growth strategy and stability.
So how is this done to ensure that the decisions made today have a positive impact on the future?
Predicting the future is always going to be the toughest part of developing a business strategy.
How do businesses know who their major competitors will be in the long-term? Can we predict what direction the economy is going to move in the coming 12 months let alone the next 5 years?
As the old saying goes, if you put 100 economists in a room and ask them to predict coming trends you’re likely to get 101 different opinions – so who do you believe?
Will a change in government provide stability or head us into a recession? Will a new political party arrive on the scene to throw our political landscape into turmoil? Will the actions of China and the USA’s “Trumpenomics” mean that this is all out of our control anyway? How are wars, terrorism or even weather patterns going to affect our business operations?
Even if we get all this reasonably correct, what sort of technological changes will we need to confront or adopt just to be able to stay in the game? After all, the iPhone and social media are only 10 years old and these have changed the landscape completely in terms of how we communicate with our markets -all within the time frame that a typical business would’ve run through just two strategic planning cycles.
So, what’s the answer? Do we just throw our hands in the air and declare it all too hard? If it’s so hard to predict the future then what is the point in planning for it?
Well the whole idea of planning a company strategy is for that plan to be dynamic and not static.
In other words, we don’t develop a plan and then stick to it blindly. Rather, we add to it and adapt it as we see changes on the horizon.
The key word in today’s business environment is ‘agile’ so we need to revisit our strategies often and review where we are headed. Importantly, we need to continually monitor what is happening externally to our business as these are the things we can’t control.
The external factors such as technology changes, current competitor activities (and new kids on the block), economic fluctuations, political and legal shifts and sociocultural trends can all be monitored closely to see which direction they are heading.
But it needs to be part of a continuous, business process improvement program that links directly back to business strategy.
We can’t afford to let the difficulty in predicting all this stop us planning where we want to be in the next few years. If the plan is to expand, contract or even maintain stability in the business then we need to know the implications for facilities, people, technology and financials of these decisions and take steps accordingly.
All this does require a bit of crystal ball gazing but if you are continually monitoring the environment that you are operating in then trends and changes become a lot easier to spot. Adjusting to shifts in the landscape through an agile approach then becomes a part of your overall strategy and almost second nature and this can then become a substantial competitive advantage over your more conservative competitors who are rusted onto the processes and strategies that have served them well in the past.
The past used to be a good predictor of the future but, in most scenarios, this is no longer the case – and constant monitoring provides opportunity in a competitive market.
Of course, being psychic would help, but you knew I was going to say that didn’t you?