Defining an Executable Business Strategy

Sorin Dumitrascu
Nov 28, 2020 · 5 min read
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Define the strategy

Business strategy involves making decisions about what the company should do and how it should allocate resources. These decisions should take into account current competitive conditions and growth opportunities in the industry. Remember, good execution begins with good strategy.

  • review the current situation with an emphasis on internal and external influences and the existing strategy, and
  • create strategy direction statements.

Clarify the mission, vision, and values

The first step in defining the strategy is to clarify the mission, vision, and values. These three items form the basis of the company’s purpose, actions, and aspirations. Essentially, they clarify why the company is in business. The executive team should return regularly to the mission, vision, and values statements, as they tend to remain stable over time.

Review the current situation

Once you’ve clarified the mission, vision, and values, it’s time to review your company’s current situation — the second step in defining the strategy. To do this, you examine three things:

  • internal influences — When you examine internal influences, you consider your own company’s performance and capabilities. To do this, you might use a balanced scorecard or rely on financial information to do the assessment. Another common method for assessing internal influences is to identify the processes required to deliver products and services to customers. The company’s goal should be to identify the processes that it can do better or differently to differentiate itself from competitors.
  • the existing strategy — Examining the existing strategy means identifying the company’s existing strengths and weaknesses. Then you summarize the conditions that aren’t currently being addressed. These conditions must be addressed when developing the strategy. Figuring out what a company’s strengths and weaknesses are can give it a clear indication of its current situation. A thorough examination of external and internal influences can uncover a lot of information — categorizing it as strengths or weaknesses can help the management team identify the key issues that need to be addressed.

Create strategy direction statements

You’ve clarified your mission, vision, and values. You have a good idea of your company’s current situation. Now you can use that information to create strategy direction statements. This is the third, and final, step in defining your strategy. The information you gleaned during the first two steps is used now to set targets for how the organization intends to create value in the future.

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