Updated: Oct 27, 2020
How Having a Strategy Impacts Your Business
According to the Bureau of Labor Statistics’ annual business survival rate report, more than half of all business startups never make it to the second year. The surprising fact is that although there are small differences in business failure rate every year, the figures are generally consistent, meaning that year-over-year economic dynamics have little impact on the success of businesses. The problem, it seems, is deep-rooted within the organizations themselves and does not necessarily stem from external factors.
Many business and commerce analysts agree that poor business planning and poor leadership are to blame for most business failures. Skipping business strategy, especially during the early stages, is a grave mistake. While some companies do survive and somehow thrive without a solid strategy in place, this is nothing more than a fling. As an entrepreneur, you must never confuse luck for success.
Business strategizing is all about creating goals, determining actions to reach those goals, and availing the necessary resources to execute the actions. Strategizing is a lot more than just planning; it's about shaping the future by figuring out how to achieve the desired results using the available means. Here are some of the main reasons you should consider adopting a strategic decision-making approach in your business.
Avoid Growth Stagnation
Creating business goals and objectives is not enough organizational motivation. You also have to layout a well-defined path to achieving your business desires. Failing to have either the path or the goals means you never get the full picture of where your business is headed. This is the main reason why some businesses flat-line and get stuck on a plateau after steady growth and seemingly realistic projections.
It’s important to realistically define where you want to be and how to get there. A business strategy should be your “big plan” and must also incorporate short-term plans to give momentum to the overall effort towards success. It helps you gain a perspective into your enterprise in the near and far future, and it also defines your business direction, marks out the targets, and sets the milestones.
Get Everyone On Board
A business that lacks an actionable strategy also lacks unity. There is always a sense of empowerment when an organization works as a unified entity towards a common mission. A business strategy portrays a clear vision for the business and defines what must be done to realize every objective. The strategy calls upon every party involved, including the management, employees, and even customers, to uphold the business’s brand vision by instilling a sense of shared responsibility.
If your overall business approach does not seem to care about your brand or your employees, then the target audience and market, will not care either. Working together towards common goals motivates commitment and loyalty to the brand and its mission.
Create a Response Framework
Changes in fundamental business elements such as competition pressure, economic dynamics, customer expectations and behavior, employee morale, and financial standings heavily influence the success and direction of a business. Many organizations fail to anticipate these critical changes, leading to catastrophic results due to poorly implemented adaptation efforts. A business strategy helps you predict and prepare for both external and internal business challenges. You may not have control over everything, but you can at least adapt to the changes by adopting a practical course of action when specific changes occur.
The idea is to keep the ball rolling without losing any business momentum even when facing unprecedented hurdles. A business strategy should not be one-dimensional or too stiff; leave some wiggle room to make any necessary adjustments down the road – but without losing sight of the big picture.
A business strategy provides the foundation and framework for the entire organization. It also helps you measure your business success and performance. Keep in mind that the business context is present, whether you intentionally set it or not; it’s up to you to either define it or let it define your business. Your business results depend on the intentions you define right from the very start.
The big question is, what direction is your business setting right now, and how much control do you have over it?
We’ve found that 100% of our clients who don’t strategize carefully end up coming back to us in crisis, while those who start off on a strategic foundation experience growth. So, yes, a business strategy is important, and it can make a huge difference. Is your business strategy robust enough to take your enterprise to where you want it to be? Book a strategy evaluation session with Elizabeth Mead and her team and find out. Get valuable research-based insights, feedback, and recommendation on your strategy to ensure that your business stays on track to success.