Productivity and efficiency are key drivers of profitability. To make your management task easier, we will regularly post “best practice” articles relating to business management. We would welcome your comments on the articles. Please also share the articles with your friends and colleagues.
The latest Business Matters articles are listed below.
Is strategy design really a linear process
STRATEGY ALSO IMPORTANT FOR SMALLER BUSINESSES
Let’s first dismiss the myth that strategy is only for big businesses. A strategy is important for any business; big or small, new or established. It charts the path your business intends to take towards a specific goal, while the action plan outlines what must be done to reach the destination including by when and who will be on board. Likewise, a business that faces many external pressures such as a complex regulatory environment needs to formulate a strategy that navigates around these challenges for its continued sustainability and success. You probably spend most of your time working in your practice, including day-to-day activities like meeting with clients, modelling scenarios for client portfolios and overseeing the activities that speak to the bottom-line and generate profits. However, it is key to take time out to think about the current state of your business versus the future environment considering factors that threaten business continuity, internally and externally, and building defensive strategies to overcome these threats.
Finding the right strategy and then translating it into effective goals and actions are an Achilles heel of many business owners. Unfortunately, the process is not as smooth and direct as one might expect. A strategy is not a linear, two-step process of strategy formulation and implementation. It is interconnected, interactive and intertwined and requires interaction between formulation and implementation. A beautiful, wellthought- out strategic plan will not get you across the river if you are not capable of actually building the bridge.1
REVIEWING YOUR STRATEGY
The iteration of strategy action plans is also key due to the ever-changing world in which we live. Reviewing and monitoring outcomes to recalibrate deviations from strategic objectives should become a regular exercise. As you regularly review your clients’ portfolios and rebalance performance, the same applies to business strategy and the frequent monitoring of the performance on strategic goals. Strategy formulation is not limited to asking questions, but a much more involved process building a fine thread between the challenges your business faces and the alternate ways to overcome these.
HAVE AN ACTION PLAN
It is vital for the outcomes of a strategy to have an implementable action plan. The goal-setting method used must bring structure and measurability into your strategic goals and objectives. Instead of vague resolutions, set specific goals that create verifiable trajectories towards a certain objective, with clear milestones and an estimation of the goal’s attainability. Every goal or objective, from the intermediary step to the overarching objective, can be specific, measurable, realistic and attainable. It is also imperative to communicate the outcomes of the business strategy with your staff. Doing so ensures that there is goal alignment in the business. More importantly, it gives employees a sense of direction and purpose when they know their worth to the business. It also makes decision-making easier in your absence and empowers staff to offer a client experience of a high standard. For a sustainable and future-fit business, tactical digital strategy design is crucial. Social media requires this in many aspects of the business. Its touchpoints are target marketing, client acquisition, engagement and retention, risk management, budgeting and forecasting of expenses as well as the value chain of the business. Failure to implement this can be the straw that breaks the camel’s back.