6 Business Strategies That'll Keep Your Company Around for a Long Time
These are the strategies you need to grow your business's size, profits, and potential.
One of the biggest challenges, I find, for new business owners is for them to move from working in the business to working on the business.
You are so engaged in building and selling your product or service that you "don't have time" to focus on strategy and the next round of changes for the business to survive and grow. The result is a business plateau that hits you like a ton of bricks.
As a business adviser, when I bring this up, at best I will hear the defense that you are focused on the strategy of the moment, such as such as how to increase sales, or reach a new market.
I have to admit that I have struggled with this myself many times, trying to understand all the dimensions of strategy, which has always seemed like an amorphous and overwhelming subject.
I was happy to see some good guidance on this subject in a new book, Outsizing: Strategies to Grow Your Business, Profits, and Potential, by Steve Coughran, a thought leader and consultant in this area. He outlines six dimensions of a winning business strategy, with some practical, research-based steps that I like, to focus on in achieving extraordinary results:
1. Above all, deliver an exceptional total customer experience.
The most successful companies today build a strategy to proactively anticipate the needs of their customers, as a group and individually, and totally delight them with all aspects of the shopping experience: value, delivery, and help with any follow-on questions or problems.
For example, Apple has been a master at this, developing products like the iPod and iPhone before customers even knew they needed them, creating Apple Stores with a whole new shopping and support experience, and intuitive usage needing no manuals.
2. Highlight your competitive value, not your technology.
This may sound obvious, but I still see too many companies with a strategy of highlighting technology improvements and features, rather than their value compared with competitors'.
This requires constant study of what your customers value, what competitors offer, and your target market. Converting customer-centric advantages into business value requires a deep understanding of all the financial elements of your business, as well as customer drivers.
It starts with continually optimizing your business model, using analytics on all the data, and creating and using metrics to measure your performance and progress to date.
3. Seek out and capitalize on emerging opportunities.
I wish I could see around corners--and I'm envious of people like Steve Jobs and Elon Musk, who seem to have this ability. I'm sure you are too.
With a little hard work at projecting market and technology turns, as well as the courage to make bold decisions, you can move further in this direction. For example, it doesn't take a genius to see opportunities today because of the massive changes in health care, environmental concerns, social changes around the world, and the new generations of consumers.
It does, however, take effort to weave these into a strategy. That's your real challenge.
4. Unleash the potential of your team and talent.
Strong leaders continually work on a strategy of hiring, developing, and retaining the best and the brightest. Too many business owners I know push these efforts to the bottom of their priority list, in favor of the operational crisis of the moment, or until they feel gaping holes in their teams.
Most successful CEOs now recognize motivated teams and a strong culture as two of the greatest sources of competitive advantage and long-term growth. Empowering people will produce near-term and lasting results for your business.
5. Turn value creation (revenue) into value capture (profit).
Strategy is more than hashing out mission, vision, and value statements. It's making sure that these statements are financially grounded with specifics to assure an adequate return on investment for all constituents.
Focus on user counts, or revenue alone, won't make a long-term business.
Smart growth and value capture strategies usually include selling more to existing customers and your current market--and selling current products in a new market--before developing new products or carving out a new and untested space for your business.
6. Internalize the strategy process keyed to the bottom line.
Strategy can't be a one-time effort. Customers and the market don't stand still, so your strategy can't either. Efficiency is achieved through consistency and innovation, based on the bottom-line results of your business. Establish a strategic cycle of initiatives, actions, and results.
Strategy is about working on the business, as well as in it. It's hard work, and requires learning from your mistakes.
It's an exciting time to operate. You're probably standing on the edge of new and exciting opportunities. Success won't come from a random walk--build a strategy now for your future.