Some people treat business as a game. The ones who treat it like a high-stakes chess match are more likely to succeed. When you play chess against a worthy opponent, if you just start moving pieces around and hope for the best, the game will be over quickly—even if it takes a few minutes for your Queen to fall. You need to have a strategy. Developing a big picture for your company gives you a long-range plan. But companies also need a mid-range plan.
When I meet with business owners, I urge them to develop a three-to-five-year strategy. And to be honest—with the rate at which things change in the business world today—I recommend a three-year strategy. What are some of the key components of a good three-year, mid-range strategy?
Define Your Financial Targets: Creating a strategy requires you to be specific. “Increase sales” isn’t specific enough. By what dollar amount or percentage do you want to increase sales? “Improve profitability” is too vague. Again, by how much do you want to improve it? “Multiply market share” is impossible to measure. What percentage of the market do you want to own? Your specific financial targets will require specific steps in order to make them happen. If your targets aren’t specific, how will you hit them?
Determine Your Thrusts/Capabilities: In order to achieve your financial (and other) targets, you’re going to need to decide what specific thrusts or business actions you’re going to take. You can’t just keep doing “business as usual” and expect things to change. But your thrusts or activities will depend on your ability to deliver. That means you need to decide which areas you’re going to expand and how you are going to develop your ability to deliver.
Describe Your Sandbox: Your sandbox or your playing field is where you play or compete as a company. It’s comprised of new and existing markets, new and existing products and services, and new and existing geographies. It’s also defined by a timeframe (and we’re talking about a three-year period). Again, doing the same thing you’ve always done won’t result in different results. You need to strategically (and specifically) decide what you’re going to do differently in the areas of markets, products and services, and territories over the next three years.
Develop Your Brand Promise: Your company brand promise (what your company brand promises to deliver to help your clients) needs to stay fresh and relevant. One hundred years ago, U.S. railroads thought they were all about locomotives, railcars, and iron rails. Customers were looking for someone who would promise to move people and goods, efficiently and effectively. Are you letting customers and prospects know how you can help them meet their needs? Do you really know what those needs are? You need to revisit your brand promise at least every three years.
Keep it Simple: You need to capture the essence of your core strategies in a single phrase or sentence. If you need a whole paragraph (or more) to describe your strategies, they aren’t clear enough in your mind. And if they aren’t clear—continually—they’ll get lost in the shuffle when things get busy. And without a good strategy, it’s “game over.”
What else would you include in your three-year strategy?
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