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How To Write A Business Strategy: Your Four-Step Guide
Not sure how to create an actionable plan for your organization’s future? Here’s a simple guide on how to write a business strategy that works.
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.
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.
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.
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.
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 ClearPoint can help, please reach out.