5 Common Strategy Mistakes Your Company Must Address Now
Even if your strategy has worked well for the past few years, the day will come when something will change. A disruptive competitor will show your customers a better way; perhaps a new regulatory attitude will slash your margins in a critical area. You can’t respond to threats if your strategy doesn’t leave room for growth.
Strategies should evolve, not stagnate, yet many companies treat their strategic blueprints as if they were written in stone. Effective strategies consider changes in data and markets, then adapt to meet the needs of the times.
New doesn’t always mean better, though. Identifying where to improve and where to stay the course can be tricky for even the most seasoned executives. If you’re not sure about your company’s strategy — or if you haven’t laid out a detailed plan yet — make sure you don’t commit these common strategy sins:
Looking too far ahead
How many years should your business strategy consider? According to Ken Favaro, the answer is, as usual, that it depends. In some industries, 20 years could be a short-term plan. Massive construction projects and costly research tend to require tons of time and money to build momentum. For most small businesses, however, three to five years should be sufficient.
Beyond that time frame, consider larger goals in accordance with your core values. What kind of impact can the business have on the world? How would it accomplish that goal, and what kind of growth would it need to achieve to realize that vision? Start with the long term, then work backward to develop measurable goals that keep the end game in mind.
Following best practices instead of pursuing advantages
Something that works for everyone else might not work for you. Disruptors succeed because they approach problems in ways that others have deemed too risky, not because they aggressively retread familiar roads. Instead of researching best practices and following them to the letter, think about your company’s specific strengths. Consider how to leverage those strengths for your long-term strategy.
Speaking on B2B brand strategy, Renegade agency understands the pressures executives face. An overabundance of options means marketing leaders must either find success quickly or find new jobs. In cutthroat environments, bravery, not sameness, leads to the best results. Embrace what makes your business unique, and turn those differentiators into competitive advantages.
Failing to involve important stakeholders
Not many businesses grow by depending solely on one person. Employees, investors, partners, and even some vendors and customers may deserve a say in where your business goes next. If you fail to give other stakeholders a fair say, you not only lose their valuable input, but you could also lose them for good.
Before you start thinking about your company’s new strategy, think about the parties who need a seat at the table. Your executive team, your board, and your business partners all have stakes in your company. Going it alone will only deprive you of the valuable knowledge and skills of the talented people around you. Work as a team to hash out a better plan than you could develop on your own.
Mistaking revenue goals for strategies
Many companies that fail do so because they run out of money. Many companies that run out of money do so because they mistake revenue goals for real strategies. When money doesn’t materialize, they lack the underlying strategy necessary to right the ship.
Your strategy should help you make decisions based on the areas in which your business can beat the competition. Financial goals, while important, don’t provide insight into what to do if a major competitor enters an unexpected market or your biggest supplier goes bankrupt.
Only firm positioning can guide you in times of hardship, so look beyond the balance sheet to consider the factors that make their presence felt behind the numbers.
Pursuing the wrong markets
How many small businesses have hungered after high-growth markets, only to fold as they go in without a strategy while more established players take their shares? The biggest markets don’t always lead to the best rewards. Even businesses of significant size grow more, in some cases, by focusing on modest yet underserved markets.
Develop a strategy that considers where the company can do well, not one that looks at the market first and the business’s capabilities second. Your company won’t succeed in trying to infiltrate a market where more prepared competition has a better foothold.
Move into high-growth areas when the move makes sense, but don’t chase money for money’s sake when your strategy would have you do otherwise.
These common mistakes share one underlying thread: When you fail to verify your assumptions with data, you head blindly into situations where you can’t be sure of your odds of success. Better to do your research and steer clear of unnecessary risk than to charge in on gut instinct and waste your shot. Fly in the face of common wisdom only when you know that you’re making the right move.
Others may call you crazy, but when you’re confident in your well-researched strategy, you’ll get the last laugh.
5 Common Strategy Mistakes Your Company Must Address Now was originally published on ReadWrite on March 3, 2020 by Brad Anderson.