Key Characteristics of an Effective Business Strategy
A company’s strategy is the game plan business owners and management use to position their organization in its chosen market area, to compete successfully, satisfy customers, and achieve good business performance.
Business leaders have to pay attention to the developments in the world because they are intertwined with market forces that affect consumers and demand. They have to adapt their business strategy to a constantly shifting environment.
Changes in strategy should be done when it’s clear achieving a strategic goal is either impossible or no longer desirable, says Geoffrey James, columnist for Inc.com.
He offers some characteristics every strategy should include.
They are Not Tactical
People often get a strategy mixed up with a tactic. “Strategies define goals to be achieved while tactics define the actions you’ll take to achieve those goals,” says James.
For example, a strategy would be to double sales in a specific territory. A tactic would be to hire more salespeople in that territory to achieve their goal.
They are Measurable
If your goals are vague, you won’t know if you are achieving them. “You can’t manage what you can’t measure,” says James.
When you set goals, also set ways you will measure them to be certain they are successful.
Goals such as achieving thought leadership won’t translate to solid numbers. However if your goal is to double sales revenue in a specific region, you will have data to back up whether it was a success or a failure.
They are Actionable
Strategic goals are achievable through tactics. They are not dependent on forces you can’t control.
James says an actionable goal would be to double sales revenue versus increasing your publicly held stock price by 50 percent. Increasing your stock-price is contingent on the market.
They are Clear
Employees should understand exactly what their organization’s strategy is to achieve it successfully. A strategy requires continuous and clear communication. It should guide their decisions and actions.
They Include a Business Plan
“A strategy is just hot air unless there’s a tactical plan for achieving each strategic goal,” says James.
For example, if you want to increase sales by 50 percent in a specific region, your plan could include anything from investing in better lead generation methods to retraining employees to hiring new ones.
They Don’t Change Much
Strategies evolve as businesses evolve, but it’s important to know what does and doesn’t work. Once you know that, you can adjust your tactics and try new approaches.
A business strategy is an ongoing process, not something to set and forget. Strategic planning is key to looking to the future and creating direction to for a business to be successful. The key is to do what works best rather than trying to do everything.
What other characteristics do you think are critical in a business strategy?