Writing a business strategy

Hav­ing a defined busi­ness strat­e­gy and plan is cru­cial for every com­pa­ny, from star­tups to multi­na­tion­al cor­po­ra­tions. In order to grow the busi­ness, the board, employ­ees and rel­e­vant stake­hold­ers need to under­stand what the com­pa­ny is try­ing to achieve, and how it plans to get there.

A strate­gic plan sets out these objec­tives in a con­sis­tent way. Typ­i­cal­ly the plan will include the company’s mis­sion state­ment and goals, as well as details of tar­get cus­tomers and the key per­for­mance indi­ca­tors that will be used to mea­sure suc­cess.

Oth­er essen­tial com­po­nents include finan­cial pro­jec­tions, an oper­a­tional plan and analy­sis of the indus­try in which the com­pa­ny oper­ates. From the strate­gic plan, the com­pa­ny can then cre­ate a busi­ness plan which sets out how the com­pa­ny will achieve its strate­gic goals.

Estab­lished com­pa­nies rarely cre­ate a busi­ness strat­e­gy from scratch; the strat­e­gy is usu­al­ly drawn up when the busi­ness is first set up. How­ev­er, the strat­e­gy needs to be reviewed reg­u­lar­ly to make sure it remains rel­e­vant to mar­ket con­di­tions and the company’s capa­bil­i­ties.

“Strat­e­gy should only be writ­ten seri­ous­ly every three years,” says Allan Gas­son, strat­e­gy part­ner at Deloitte. “You can’t change organ­i­sa­tions fast enough to mer­it rewrit­ing strat­e­gy from scratch more often than that.”

Com­pa­nies typ­i­cal­ly write a five-year vision state­ment, which is used as the basis for a three-year strat­e­gy. This is then used to gen­er­ate a one-year busi­ness plan, he says.

Oth­er trig­gers may prompt this strat­e­gy to be reviewed or refined, such as mar­ket dis­rup­tions, reg­u­la­to­ry changes or con­cerns regard­ing the company’s per­for­mance com­pared to its com­peti­tors. A change in chief exec­u­tive or a new acqui­si­tion could also prompt a strate­gic review.

PROCESS

Rob Law, chief exec­u­tive of children’s trav­el prod­ucts com­pa­ny Mag­mat­ic, which pro­duces the Trun­ki brand, says there are always ideas bub­bling over with­in the busi­ness that are brought up in month­ly senior man­age­ment meet­ings or even at board lev­el. “But once a year we go through work­shops with the team to iden­ti­fy the new goals for the year, which forms a micro strat­e­gy,” he says. “That process is cap­tured on a bit of soft­ware that we review once a quar­ter.”

Any size­able organ­i­sa­tion will include input from mul­ti­ple sources when cre­at­ing or refin­ing its strat­e­gy doc­u­ment. Jacque­line Wind­sor, strat­e­gy part­ner at PwC, says two groups of peo­ple should be involved: those who shape the strat­e­gy and those who pro­vide insights. “The group actu­al­ly doing the strat­e­gy is a small­er group – it doesn’t have to be the top team per se, but the lead­er­ship team that rep­re­sents dif­fer­ent parts of the busi­ness,” she says. “Clear­ly this will include the CEO, but com­pa­nies should also include mul­ti­ple lens­es: cus­tomer, trad­ing, sup­ply chain/logistics and finan­cial.”

The strat­e­gy needs to be reviewed reg­u­lar­ly to make sure it remains rel­e­vant to mar­ket con­di­tions and the company’s capa­bil­i­ties

Devel­op­ments in tech­nol­o­gy are mak­ing it more fea­si­ble for geo­graph­i­cal­ly dis­persed teams to work togeth­er remote­ly. “We use var­i­ous online appli­ca­tions where peo­ple around the world can input infor­ma­tion using their iPads,” says Mr Gas­son. “You can do that so quick­ly, with peo­ple in Aus­tralia and New York com­ing togeth­er, and then you can col­lec­tive­ly look at the results and start build­ing a con­sen­sus around what the strat­e­gy is and what needs to be done.”

For oth­er com­pa­nies, hav­ing every­one in the same room is essen­tial to the strat­e­gy-build­ing process. Some spread the process out with a series of work­shops over the space of a cou­ple of months, while oth­ers opt for a more inten­sive approach.

Estelle Rowe, direc­tor of Dot Dot Con­sul­tan­cy, says some com­pa­nies might seek “splen­did iso­la­tion” and lock them­selves away for a week, although she points out that, if the process is too sti­fling, ten­sions can arise. “It’s impor­tant to intro­duce an ele­ment of space so that peo­ple can take time to think about what they’ve heard,” she adds.

Mean­while, Emma War­ren, man­ag­ing direc­tor of busi­ness advi­so­ry firm Port­fo­lio Direc­tors, advo­cates an “open and closed gate” process. “You open it out, data gath­er, close the gate and bring it all back in,” she says. “You can then draw some con­clu­sions and share the next stage with every­body in order to get their feed­back.”

NEXT STEPS

Hav­ing a con­sis­tent and infor­ma­tive strat­e­gy doc­u­ment is impor­tant, but equal­ly impor­tant is what you do with it next. There’s lit­tle point in cre­at­ing a strat­e­gy which is going to sit on a shelf gath­er­ing dust for the next year.

As well as feed­ing into the busi­ness plan, the strat­e­gy needs to be com­mu­ni­cat­ed to the man­age­ment team and fil­tered down to every­one in the organ­i­sa­tion so that every­one under­stands their role in help­ing the com­pa­ny achieve its strate­gic goals. This is illus­trat­ed by the sto­ry of the NASA clean­er who report­ed­ly told Pres­i­dent John Kennedy, “My job is to help put a man on the moon”.

Not every­one will receive the full strat­e­gy doc­u­ment – dif­fer­ent sec­tions may be cir­cu­lat­ed to dif­fer­ent peo­ple, depend­ing on their job func­tion or rela­tion­ship to the com­pa­ny – but all com­mu­ni­ca­tions should present a con­sis­tent sto­ry. “How you com­mu­ni­cate it can vary depend­ing on the audi­ence, but ulti­mate­ly every­one needs to be telling the same sto­ry and singing from the same hymn sheet,” PwC’s Ms Wind­sor con­cludes.

PROCESS

NEXT STEPS