“Strategy” shouldn’t be complicated. A strategy is simply a way to get from where you are, to where you want to be. You want to get as clear as you can on the start and end points, so that you can work out what needs to happen in between. That’s all a strategy needs to give you, but it’s surprising how few strategies do it well. Here’s a story to help objectively evaluate your strategy (Alex is an amalgam of three people)
Alex wants to sell his business sometime in the next few years. In around 18 months he plans to start talking to advisors about selling it. He’s got an idea of what he thinks it’s worth and hopefully there will be someone out there who will make a good offer. That, along with ambitious sales goals, some promising conversations around expansion, and a new range about to launch, is Alex’s strategy.
Luck plays a far greater part in any business than we’d like to admit, and who knows, Alex might get lucky. But he’d stand a much better chance of being lucky with these three basic bits of strategy in place:
Imperative Goal: Selling up “at some point soon” is a soft goal. Alex needs an absolutely compelling reason to sell by a specific point in time or he will avoid the tough calls.
What is your five-year goal, and on a scale of 1 to 10 (life and death) how imperative is it that you hit it?
Few Big Things: To sell his business as a going concern Alex needs three things: a compelling financial trajectory backed by a solid history; a management team that can run without him; and as broad a reach for potential buyers as possible. Alex is focused on just one of the three.
What are the few big things you’ll need to get to your goal and, on a scale of 1 to 10, how clear are you on what they all need to look like?
Reality Check: Alex’s “few big things” mean he requires: a strong senior team, exposure to overseas buyers and a pipeline of higher margin sales. That’s a big shift from the current reality, which means tangible actions, tough decisions and genuine risks.
How big are the reality shifts that need to happen in your business, and from 1 to 10, how robust is your plan for delivering them?
So how good is your strategy?
25+: sure, you still need luck, but you’re well positioned to get it
16 – 24: your goal is at risk; focus on improving the lowest-scores
Below 16: re-visit your strategy to get the odds back in your favour