How To Write A Business Strategy: Your Four-Step Guide for Success

Creating a solid business strategy happens in three parts: 1) understanding where you stand strategically as an organization right now; 2) deciding where you want to be in the future; and 3) determining how you’ll get there. The steps below cover each of these areas, with steps three and four both being part of the final phase.

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How To Write A Business Strategy: Four Steps

Step 1: Conduct a SWOT analysis.

The best way to understand your organization’s current state is to conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis. A SWOT analysis provides wide-ranging insights about your company from multiple perspectives. Not only does it reveal where things are going well and where you can improve internally, but it also requires you to evaluate the environment outside your company to understand potential threats and opportunities you can minimize or leverage (respectively) going forward.

To glean these insights, you’ll need to do some information-gathering from your employees, external stakeholders, and even your customers (where relevant). You can read more about how to do a SWOT analysis in this article, but in brief, here are the questions you should ask:

Once you’ve gathered all this information, study it. Identify seemingly significant points, things to follow up on, and trends. Also, look for connections between the areas. For example, some of your strengths may naturally support the identified opportunities, and eliminating certain weaknesses might present additional opportunities.

Step 2: Clarify your mission, vision, and values.

Next, with your SWOT insights in mind, you can begin thinking about where you want your company to go. This direction should be reflected in your organization’s mission and vision statements. A mission statement articulates your purpose—why the organization exists and the value of the product or service it provides. A vision statement clarifies the direction in which your organization is headed by stating the outcomes you expect to achieve in the near future.

Another element to consider is your core values; these define your organization’s fundamental beliefs and practices.

All of these elements are a foundational part of your organizational structure, and form the linchpin of your strategy.

The SWOT analysis you completed in Step 1 is helpful because it serves as an objective assessment of your company—what you’re good at and your weaknesses. Knowing this information will help you formulate realistic goals, and create a plan that the organization is reasonably prepared to execute. Without those insights, it’s possible you could be busy developing a business strategy that’s categorically beyond your reach.

Another way of articulating your strategy is with an OAS statement:

• Clarify your organization’s objective, or the reason you exist.
• Clarify your advantage, or how you do things differently, better, or more efficiently than competitors.
• Clarify the scope—what you’re doing (and not doing) to achieve your objective.

Step 3: Select a strategy management framework.

Before you begin to write a business strategy, choose a strategy management framework to hold it all together.

A strategy framework brings structure to your plan, connecting your projects and initiatives with the outcomes you hope to achieve. It serves as support for your organization’s daily activities, and makes your priorities clear to everyone involved. Think of it as the master plan for your strategy, unifying all activities organization-wide.

There’s no shortage of frameworks to choose from, including (our favorite) the Balanced Scorecard (BSC), Theory of Change (TOC), and Objectives and Key Results (OKRs).

Step 4: Develop your five-year plan with SMART measures and objectives.

Now that you know where you’d like to go, it’s down to the details of creating a business strategy—what can you do that will get you there? Note that the framework you’ve chosen may use specific terminology, but you’re still essentially going through the same exercise: clearly identifying high-level goals and performance measures.

Using the Balanced Scorecard as an example:

• You’ll create objectives, which are high-level organizational goals. To do this, focus on what your organization is trying to accomplish strategically. A very general example of an objective would be “Become an internationally-recognized brand.” Organizations using the BSC typically create 10 to 15 strategic objectives.
• You’ll create measures, which help you understand if you’re accomplishing your objectives. Using the above example, a measure would force you to answer the question, “How do I know that I’m becoming an internationally recognized brand?” Create one to two measures per objective. Also known as KPIs, measures use the process of measurement to help you understand what you can influence and which actions you can take. (Note that these might change if you discover over time that a particular measure is not accurate.)
• You’ll set targets for your measures. By setting targets, you’ll be able to see whether or not you’re on track to meet your specific goals.

In ClearPoint, you can structure your plan with common elements, creating linkages (as many as needed) to show alignment. You can also customize the terminology you use to match the framework you’re using.

Tip: Use the SMART framework to create objectives.

SMART is an acronym for specific, measurable, attainable, realistic, and timely. This methodology will guide you in creating goals that are clear and achievable. Each objective you create should be:

• Specific: Goals should be well-defined and explicitly state who, what, when (see “Timely,” below), where, and why.
• ‍Measurable: Goals should be quantitative and number-oriented.
• ‍Attainable: Goals should be feasible given your organization’s capabilities and resources.
• Realistic: Goals should be realistic given the external environment and your company’s current stage of growth.
• ‍Timely: Goals should have an end date, and, if applicable, dates for completion of various phases.

What happens after you write a business strategy? How To Complete The Strategic Planning Process

Learning how to write the business strategy itself is only part of the strategic planning process. Once you’ve created your plan, there are a few more steps to complete in order to set yourself up to execute it successfully.

Execution is the most difficult part of strategy. It’s easy to generate excitement around the initial writing of a plan; the hard part is sustaining momentum over the space of three to five years. Doing the following as part of the planning phase will put you in the best possible position as you begin strategy implementation:

Communicate your plan organization-wide.

No matter how good your business plan is, it won’t work if your co-workers at the executive, management, and employee levels don’t know how to contribute to it, or if they simply don’t know about it. That’s why you need to create a strategy communication plan that builds awareness.

A strategy map is a visual representation of the things your organization must do well in order to execute its plan successfully. It is easy to understand and share. For more ideas on how to communicate strategy effectively, read this article.

Set up a way to measure your results.

To know if you’re making progress, develop a plan to report on your strategy regularly. The best way to do that is with strategy reporting software like ClearPoint. ClearPoint bridges the gap between strategy creation and execution, helping you to maintain focus on the big picture (your objectives) while managing all the operational pieces that will bring it to fruition.

In ClearPoint, you can work within the framework of your choice (Balanced Scorecard, OKRs, etc.) and focus on the data that drives results.

ClearPoint users are more likely to achieve their goals because they can:

• Clearly see how measures and projects align with objectives
• ‍Spot trends and learn the key influencers of outcomes
• ‍Understand how all departments contribute to the organization’s goal

In addition, they are more likely to stick with strategy execution for the long haul because they can:

• Automate data collection and report generation, removing the burdens traditionally associated with manual reporting
• ‍Keep conversations continuously centered around strategy, using ClearPoint as a guide
• ‍Provide open access (if desired) to progress data to keep employees informed and motivated‍‍‍

Developing a business strategy is only a prelude to the hard work entailed in putting it to work. But with preparation and the right tools, you have a very good chance of being the kind of organization that actually accomplishes what it sets out to do. If you want to talk more about how corporate strategy software like ClearPoint can help, please reach out.

FAQ:

What are the different types of business strategies?

Different types of business strategies include:

- Growth Strategy: Focuses on expanding the company’s market share, product line, or geographic reach.
- Cost Leadership Strategy: Aims to become the lowest-cost producer in the industry to attract price-sensitive customers.
- Differentiation Strategy: Involves offering unique products or services that stand out from competitors.
- Focus Strategy: Concentrates on serving a specific market niche, either through cost focus or differentiation focus.
- Innovation Strategy: Emphasizes creating new products, services, or processes to gain a competitive edge.
- Sustainability Strategy: Integrates environmental and social considerations into the business model to meet the needs of present and future generations.

How can I conduct a SWOT analysis for my business?

To conduct a SWOT analysis for your business:

- Identify Strengths: List internal strengths such as strong brand reputation, skilled workforce, proprietary technology, and robust financial health.
- Identify Weaknesses: List internal weaknesses such as limited resources, outdated technology, or gaps in capabilities.
- Identify Opportunities: List external opportunities such as market growth, emerging trends, technological advancements, and regulatory changes.
- Identify Threats: List external threats such as competition, market volatility, economic downturns, and changing customer preferences.
- Analyze and Prioritize: Analyze the items in each category and prioritize them based on their impact on your business.

How can I clarify my mission, vision, and values?

To clarify your mission, vision, and values:

- Define Mission: Articulate the purpose of your business, what it does, who it serves, and how it serves them. It should be clear and concise.
- Define Vision: Outline your long-term aspirations and what you aim to achieve in the future. It should be inspiring and forward-looking.
- Define Values: Identify the core principles and beliefs that guide your business’s behavior and decision-making. They should reflect your company culture and ethics.
- Engage Stakeholders: Involve employees, customers, and other stakeholders in the process to ensure alignment and buy-in.
- Communicate Clearly: Ensure the mission, vision, and values are communicated clearly across the organization and incorporated into all strategic planning.

What are some different strategy management frameworks?

Different strategy management frameworks include:

- Balanced Scorecard: A framework that balances financial and non-financial performance measures across four perspectives: financial, customer, internal processes, and learning and growth.
- SWOT Analysis: A tool for identifying strengths, weaknesses, opportunities, and threats to inform strategic planning.
- Porter’s Five Forces: Analyzes the competitive forces within an industry to understand its attractiveness and potential profitability.
- PEST Analysis: Examines the external macro-environmental factors (Political, Economic, Social, Technological) that could impact the organization.
- OKR (Objectives and Key Results): A goal-setting framework that defines clear objectives and tracks the outcomes to measure progress.
- Growth-Share Matrix: Helps businesses prioritize their product portfolio based on market growth and market share.

How can I develop a five-year plan for my business?

To develop a five-year plan for your business:

-Set Clear Objectives: Define long-term goals that align with your mission and vision.
- Conduct a SWOT Analysis: Assess your business’s strengths, weaknesses, opportunities, and threats to inform strategic decisions.
- Define Key Initiatives: Identify the key initiatives and projects needed to achieve your objectives.
- Create Action Plans: Develop detailed action plans with timelines, resources, and responsibilities for each initiative.
- Allocate Resources: Ensure you have the necessary resources (financial, human, technological) to support your plans.
- Establish KPIs: Set key performance indicators to measure progress and success over the five-year period.
- Review and Adjust: Regularly review the plan and make adjustments based on performance and changing external conditions.

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