Internationalization involves designing products to meet the needs of users in various countries or...
How to Create a Strategy
Discover the art of strategy creation in this comprehensive guide, where we break down the practical steps and essential components to build a robust business framework.
There are different ways and methodologies to create a strategy. Below I will describe the steps of one robust way that I use with my clients to develop a strategy. These are in cronologic order.
Understanding the Foundations: Initial Analysis and SWOT
First thing needed is to get a snapshop of the business as is and the markets as well as make an assessment of the megatrends and how they are connected with your buiness.
Creating a successful strategy begins with a deep understanding of your business environment. Conducting an initial analysis is crucial. This will help you get a better understanding of the starting point and have also a comparison for future reference. In order to do this you can start by documenting as well as possible the situation of the business or entity as is. The more detailed the better. Tools like PESTEL analysis help you examine external factors such as Political, Economic, Social, Technological, Environmental, and Legal aspects that could impact your business. Additionally, internal surveys and assessments provide insight into your company's current situation, strengths, and weaknesses. Conducting external surveys together with your current customers and/or potential clients is good to get a perspective of the market and feedback from the people who will benefit from your services.
Once you have gathered sufficient data, performing a SWOT analysis is the next step. This involves identifying your business's Strengths, Weaknesses, Opportunities, and Threats. The SWOT analysis will give you a clear picture of where your business stands and where it can go, forming the bedrock of your strategic planning. Also this will give a perspective on aspects you should keep, reinforce or minimize.
Defining Core Values, Mission, and Vision
With a solid understanding of your business environment, you can now define your core values, mission, and vision. Core values are the fundamental beliefs that guide your business practices and decision-making processes. They shape the company culture and influence how employees interact with each other and with customers. This should be made before the rest as it will have an impact. Of course you can iterate, and should. There isn't a golden rule or perfect outcome. I recommend keeping it to a minimim. 3 to 5 is recomended, but more than 3 is too demanding for anyone to remember and becomes more of a wish list than actual core values that characterizes the business and makes it unique.
Your mission statement articulates the primary purpose of your business. It answers the question: Why does your company exist and to whom? In some cases the mission statement is quite descriptive of what the business does, who are their customers, in which geographies, what are the objectives and more details when relevant. In other cases the mission is short and less detailed.
Your vision statement, on the other hand, describes what you aspire to achieve in the future. It sets a long-term goal that motivates and directs your team. Together, these elements create a strong foundation for your strategy.
Here are a couple of examples
- Vision: Create economic opportunity for every member of the global workforce.
- Mission: The mission of LinkedIn is simple: connect the world’s professionals to make them more productive and successful.
- Vision: Our vision is to create the best People Flow experience.
- Mission: At KONE, our mission is to improve the flow of urban life.
- Vision: To remain the most authentic, connected, and distinctive brand.
- Mission: To bring inspiration and innovation to every athlete* in the world.
*If you have a body, you are an athlete.
- Vision: Leading the way towards a sustainable future together
- Purpose: Creating a healthier planet for our children
- Vision: We will build the world’s most desirable cars
- Mission: As a pioneer in automobile manufacturing, the Mercedes-Benz Group has set itself the objective of shaping the future of mobility in a safe and sustainable manner.
Identifying and Analyzing Critical Success Factors
After the porevious section is somehow created even if the first draft it comes the Critical Success Factors (CSFs). CSFs are the key areas where satisfactory results are essential for your business to achieve its goals. Identifying and analyzing your CSFs requires a thorough understanding of your business objectives and the factors that influence them.
By focusing on these critical areas, you can allocate resources more effectively and ensure that your strategic efforts are directed towards achieving your most important goals. Analyzing CSFs also helps in recognizing potential challenges and opportunities that may arise in the implementation of your strategy.
In this stage you can create several but the rule of thumb is to create 3 to 5 CSFs. In the next section we will break them down into smaller items and so having many CSFs will exponationally increase the complexity but also, again as mentioned in the values, it won't bring focus but caos.
Setting Strategic Objectives and Action Points
For each Critical Success Factor, you need to set specific strategic objectives. These strategic objectives will be more concrete than CSFs but less than the action points. Should be done before the action points and the purpose is to document what are the things that need to happen in order to achieve a specific CSFs. The prupose is to break down the bigger picture into small and understandable tasks. Setting strategic objectives is in the middle.
Alongside these objectives, you must outline strategic action points. These are the concrete steps that need to be taken to achieve your objectives. Each action point should be assigned to a responsible party and have a clear deadline. This ensures accountability and keeps your team focused on the tasks that will drive your strategy forward. For a clear accountability the responsible party should not be a title but a specific person, i.e. a name. This way unabiguity gets reduced to a minimum.
Developing Effective Metrics, Implementation Plans and Messaging Plan
Finaly comes a more operation task. How to follow it on a daily basis and how to communicate it effectively internally and externaly.
Metrics are essential for tracking the progress and effectiveness of your strategy. Develop key performance indicators (KPIs) that align with your strategic goals. These metrics will help you measure success and identify areas that need improvement. These should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.
An implementation plan outlines the timeline, resources, and responsibilities required to execute your strategy. It should include detailed steps and milestones to ensure that your strategy is implemented effectively and on schedule.
Finally, a messaging plan is crucial for communicating your strategy to your stakeholders. This includes internal communication with your team, as well as external communication with customers, partners, and investors. A well-crafted messaging plan ensures that everyone understands the strategy, their role in it, and the benefits it will bring.
