5 Key Strategy Questions

Posted by Chuck Kocher
On March 5, 2013

If you’re serious about working on your business instead of just working in your business, you have to pay attention to your business strategy. Great businesses don’t just happen. They evolve out of careful planning and execution. And that planning needs to be strategic. It’s not enough just to have a plan. Your plan needs to reflect your specific goals, objectives, market, budget, and what specific steps you’ll take to achieve your goals. It requires that you and your employees understand what your company is about and the unique value proposition you bring to the marketplace.

Here are give key strategy questions you need to answer if you want to build a great company.

1. Do you have a clear strategy for growth for the next three-to-five years? Of course, this starts with having clear metrics for your growth. Be specific. What are your goals for sales, for profits, for market share? What specific numbers are you attaching to each of those goals—and why? Then you need to write out specific steps you plan to take to make those things happen. Just having goals isn’t good enough—you need a plan (a measureable plan) for achieving those goals.

2. Can you—and your team—clearly state your business strategy in one sentence or a single phrase? If you need a 15-slide PowerPoint presentation to explain your strategy, it’s too convoluted. It probably means that you’re trying to justify your strategy. A good strategy may not be easy—but it should be fairly simple. If employees can’t understand it, there’s not a chance they’ll be able to execute it.

3. Are you reviewing your strategy at least once every six months? The marketplace is changing all the time. And the marketplace doesn’t care about your strategic plan. You have to adapt your plan to reality. Even if your strategy was great to begin with, if market conditions have changed, you’ll need to adjust your strategy to reflect that. Strategies aren’t sacred—they’re strategic.

4. Do you understand your business model? If you built your strategy on a particular business model, you need to understand how all of the parts of that model work. What are the forces driving demand? What economic factors are at play? What other technologies affect how people will use your products or services? Are there cultural changes that could affect how your model works?

5. Do you have an innovation process in place? How will you respond to changing needs and desires? You can’t be content to simply meet today’s needs. You need to stay a step ahead of your clients and anticipate what they will want tomorrow. It won’t matter if you make the world’s best DVD player tomorrow if the whole world is streaming video from the Internet. What you’ll end up with is a huge inventory of the world’s best DVD players—nobody wants. True innovation means anticipating needs and developing solutions before the market even knows what it wants.

What other questions would you add to this list of key strategic questions?