Strategy in Focus - Your Compass for Business Growth
Have you ever wondered how vision, mission, strategy, and tactics interplay to form the solid foundation for a successful and flourishing business? Your entrepreneurial journey begins with a vision and a mission, but ultimately it's the strategy that transforms these elements into tangible actions. These actions define the path to your success.
In this section, we look at the application of key concepts, including aspects such as business, product, marketing, and technology strategies. We reduce complexity and show you how to clearly and effectively define and implement your strategy.
Strategy: Activator of Vision and Mission
Welcome to the dynamic world of entrepreneurship. Here, where innovation and creativity meet reality, things change faster than anywhere else. Amidst this constant change, it's easy to lose focus and get swallowed up in the day-to-day operations.
Successful entrepreneurs, burgeoning startups, and even global giants have one thing in common: They all follow a guiding star - their vision. But to consistently pursue their path to this guiding star, they need a clear and concrete route that guides them there - their respective mission.
But what exactly do these terms mean and how can you effectively formulate and use them for your own business?
The Central Role of Vision
The vision of your company is like a lighthouse on the horizon - it does not mark the final destination, but it gives you a clear direction and guides your path in the darkness. It's the big, bold picture of the future that you paint for your company. It's the audacious dream that inspires you and your team, showing where you're steering and what you intend to achieve.
Let's say you run a small startup that develops a personal finance management app. Your vision could be: "A world where everyone has full control over their finances." This statement not only shows the direction you're striving for, but also the impact you want to have on the world. It shows that you want to develop a product that helps people better understand and manage their finances.
Another example could be a small, environmentally conscious clothing company whose vision is: "A world where fashion doesn't come at the expense of the planet." This vision makes clear the company's focus on sustainability and shows that they want to influence the industry and promote a change in practices.
These examples illustrate that your company's vision should be far-reaching and inspiring. It should not only represent the goal of your efforts, but also what drives and motivates you and your team. It keeps you on track when things get tough, and points the way when you're unsure which path to take.
Mission in Harmony with Vision
In navigation, both the lighthouse and the North Star are crucial points of reference. While the lighthouse helps avoid dangers, the North Star provides a constant position that serves as a reference point. But the actual path is determined by the sailor, depending on the destination of the journey and the prevailing conditions. The same goes for your vision and your mission. The vision is the lighthouse, shining in the distance, helping you stay on a safe course. The mission, however, is the reason why you embarked on the journey and determines the impact you want to make with your company.
In the dynamic world of business, adaptability is crucial. Obstacles and challenges can arise, and it may be necessary to correct the course to achieve the goals. In this context, the flexibility of the mission is central.
Your mission is your concrete 'why' - the drive that motivates you to keep going. It should provide clear instructions and priorities for your team, but also offer enough flexibility for changes and adjustments. It should act as a "flexible plan" that sets the direction but leaves room for creativity and innovation.
To formulate your vision and mission, I recommend a method known as "timeboxing". Here, you set yourself a limited span of time in which you deal intensively with a topic. The goal is to generate ideas quickly and focused, not to get lost in details. So set a timer and start collecting keywords and sentence fragments for your vision. Don't worry if they aren't perfect right away, it's about starting your flow of thought. Then use another set span of time to do the same for your current mission.
Take some time the next day, but now with the goal of turning these fragments into complete sentences. Why the wait? It allows your brain to process the information and form new connections, which often leads to clearer and more creative results.
Once both are accomplished, it's time to share your results. Involve a person you trust and who knows you well. Ask them for their assessment, with the focus on the creative possibilities and potentials that could emerge from your vision and mission. It's about exploring the inspiring and positive potential of your ideas, not the challenges or difficulties that need to be overcome. Because in the end, it's about your dream and your mission. Yes, there will be work to do, but that's inevitable. To realize the vision, we must be willing to question the status quo and make necessary changes.
Finally, use this feedback to refine your vision and mission. This iterative process allows you to develop clarity and power in your statements.
Your Action Plan
- Set yourself a limited time span (timeboxing, e.g., 30 min) to collect keywords and fragments for your vision.
- Use another set span of time for your mission.
- Formulate complete sentences from these keywords the next day.
- Get feedback from a trustworthy person, focusing on the possibilities opened up by your vision and mission.
- Use the feedback to revise and refine your vision and mission.
Remember, vision and mission are not static but can and should evolve with you and your company. Good luck!
Strategy is Action
You have a lighthouse showing you the way - your vision. You have the reason why you embarked on this journey - your mission. Now, you need a plan to get there. This plan, this course of action is your strategy.
Strategy is what you actually do to reach your vision and fulfill your mission. It defines how you allocate your resources, what priorities you set, which projects you pursue, which challenges you address, and which opportunities you leverage.
While vision and mission are rather abstract and large, strategy is concrete and specific. It is the collection of decisions and actions that determine the daily operations in your company. It is the tool you use to make your vision become a reality and fulfill your mission. In short, strategy is action.
The Unseen Power of Corporate Strategy
The goal of your corporate strategy is to define the path you want to lead your company to success. It should include concrete plans on how you intend to fulfill your vision and mission, efficiently use resources, and leverage competitive advantages in the market. The choice of corporate strategy strongly depends on your individual business goals and capabilities, and requires careful analysis and consideration.
Strategy Options
Product-Oriented Strategy: Here, the product or service is at the center of your interest. You dive deep into research and development, ensuring you always have a finger on the pulse of your users. Consider this as a journey to perfect your offering.
Consulting Strategy: Use your expertise and experiences to empower others. This strategy is all about building sustainable relationships and delivering outstanding services. This is your path if you want to improve the world through knowledge transfer.
Mixed Strategy: Combine elements of various strategies to generate multiple income streams and reach a broader customer spectrum. Consider this model as a kind of business versatility, where you combine the best from different worlds.
Trading Strategy: Focus on trading goods or services produced by others. This route requires excellent negotiation skills, a solid network, and sharp market knowledge. Consider this as your opportunity to become a master of goods flow.
Refinement Strategy: The focus here is on improving or customizing existing products or services to make them more attractive to a specific target group. This could happen through adaptation, addition, or combination of products or services. The success of this strategy strongly depends on your understanding of customer needs and your creative approach.
Partnership Strategy: Form alliances with other businesses or individuals to achieve common goals. Consider this as an opportunity to expand your network and discover new horizons. It is the collaboration that makes this strategy a powerful catalyst for growth and success.
Deciding on a corporate strategy requires several considerations, taking into account factors such as financing your business, structuring your staff (like choosing between freelancers and permanent employees), and the degree of direct customer contact.
Each of the presented strategies has its own requirements and merits, and the choice must be based on your individual goals, abilities, and circumstances. There is no one-size-fits-all solution. Your corporate strategy should be flexible enough to adapt to changes in your business environment. Therefore, it is important that you are willing to review and adjust your strategy as your situation changes.
A flourishing company can be imagined as a well-oiled machine - each department is an essential gear that contributes to a perfectly coordinated overall system. From marketing to product development to sales: Each department should have its own strategic focus, but should always be aligned with the common vision and mission.
It is this common alignment that ensures the smooth functioning and interaction of all departments and drives your company. Allow your company to unfold its unique dynamics by ensuring that all strategies are aligned with the company vision and mission. This will not only promote effective collaboration and communication, but also strengthen the health and growth of your company.
Corporate strategy is therefore more than just a plan. It is the central drive that connects all areas of your business and enables it to achieve goals together.
Exercise: Define Your Corporate Strategy in 60 Minutes
Step 1: Return to Your Vision and Mission (10 Minutes)
Before you dive into planning your strategy, take a moment to remind yourself of your vision and mission. Take the vision and mission you wrote down in the previous step and read them out loud. Keep them in sight throughout the exercise. If you have these in digital form, take a blank sheet and write them legibly.
Step 2: Define Your Basic Corporate Strategy (30 Minutes)
Now it's time to define your basic corporate strategy. Remember that "done is better than perfect". At this stage, it's about setting a general direction for your business, not perfecting the details. Your strategy is a living document and can and should change and refine over time.
Remember the basic business strategies we discussed earlier (product focus, customer focus, hybrid approach, expertise or knowledge focus). Choose the strategy that best fits your vision and mission and write it down.
Make sure you think about topics such as business financing, workforce (freelancer vs. employee), proximity to customer vs. complete virtuality, etc. when developing your strategy. Note who your target customers are and what their needs are. What resources do you have available (skills, financial resources, networks) to meet these needs?
Step 3: Daily Reality Check (20 Minutes)
Create a brief "reality check" that you can perform daily in one minute to make sure you stay on track. This could look like reading your strategy out loud every morning and considering whether the actions and decisions you've planned for the day align with your strategy.
Write down this daily reality check and stick to it. It will help you keep your strategy in mind and refine it as needed.
A Clear Strategy
Every day as an entrepreneur or employee you are faced with countless decisions. From small, daily tasks to big, strategic decisions that can influence the long-term growth and direction of your company. Without a clearly defined strategy, it's easy to get lost in the flood of these decisions or to stray from the course that leads to your vision and mission.
A well-thought-out and clearly articulated strategy serves as your guiding star. It provides you with a direction, facilitates decisions, and ensures that all activities and resources are aligned with your overarching goal. It's not just a tool for orientation, but also a means to increase the efficiency and effectiveness of your business.
In this exercise, you will develop a workable strategy that serves as such a guardrail. It is intended to help you make decisions faster and more confidently and to ensure that these decisions are in line with your vision and mission. This way, you ensure that you make progress towards achieving your business goals every day.
Remember, strategy ultimately means "doing". So let's get started!
Strategic Entanglement and Collaboration Across Various Levels
In the implementation of the company vision and mission, the corporate strategy is the steering wheel that sets and guides the course, while the derived business, functional, and operational strategies are the tools that keep this ship on course.
Even in a (one-person) startup, where many decisions initially rely on intuition and flexibility, certain patterns and structures start to form over time. These emerging strategies, often resulting from daily experimentation and learning, can then be consciously formulated and further developed to achieve a clearer and stronger alignment. As the team starts to grow, the decentralization of decisions becomes important. To ensure everyone is working towards the same goal, clear communication becomes essential. Without it, there's a risk that team members pull in different directions, undermining the collective efforts. A well-thought-out and clearly communicated strategy is thus an essential tool to ensure everyone is rowing in the same rhythm.
A good example is the interaction between financial strategy, product strategy, and IT strategy. Imagine your financial strategy requires strong cost control and a focus on high profitability. This could lead to the product strategy being aligned with efficient products with high sales potential. This shift in focus in the product strategy could in turn impact the IT strategy: it might be necessary to invest in cost-effective technologies, utilize cloud solutions, or even modernize the IT infrastructure to support product development.
Conversely, a more aggressive product strategy, focused on innovation and rapid market introduction of new products, might require an adjustment of the financial strategy. It might be necessary to invest more money in research and development and increase financial resources for marketing and sales. These changes in financial and product strategy could, in turn, have effects on the IT strategy. They might require a larger investment in new technologies or the hiring of more IT staff to support product innovation and quick market launch.
That's the beauty of well-integrated strategies: they allow a company to use its resources efficiently, create synergies, and extract the maximum benefit from its strategic decisions.
Transparency is the non-negotiable signpost to success, by ensuring a comprehensive understanding of the connections between the strategies for everyone in the team. It shapes the corporate culture, promotes dialogue, and drives innovation and improvement. As a foundation of an agile corporate culture, transparency enables a consistent alignment towards a course of success, especially in times of change.
How to proceed?
The development of each sub-strategy starts with a solid understanding of the corporate vision and mission. These form the basis on which all further considerations are built. In a next step, the own area of influence is defined to delineate the possible fields of action. It is important to realize that one cannot control every aspect, but can indeed influence design and decision-making.
Now it's time to formulate the concrete change goal. What is to be achieved and why is it important? This clarifies the focus and sets the direction. Subsequently, various strategy options are developed and weighed against each other. The selection of one or more options should be tied to clear expectations: Which KPIs will change in what time and to what extent?
At the end of the process, there is the continuous monitoring and adjustment of the chosen strategy. Regular checks and evaluations ensure goal achievement and allow timely adjustments if necessary. This keeps the company always on course and allows it to use its resources effectively.
In detail, the action plan looks like this:
- Internalize corporate vision and mission
- Define your own area of influence
- Formulate change goal
- Develop strategy options
- Select strategy option(s) and link with expectations
- Monitor and adjust progress and effects
The transparency of a chosen strategy option is a key factor to gain the understanding and support of the entire company. By clearly communicating your decisions, you make your strategy comprehensible and create an environment of inclusion and responsibility.
It is just as important to disclose the discarded options. Why were they not selected? What considerations led to the decision? By sharing this information, you show the breadth of your considerations and create a deeper understanding of the chosen direction.
In practice, this could mean organizing regular meetings in which the strategic decisions and their backgrounds are explained. Or you could create an internal document or platform where all important information is accessible.
Ultimately, the transparency of your strategy options helps to create a common understanding, strengthen trust, and foster collaboration. By understanding the strategic context, everyone in the company can better align their daily work with the overarching goals.
Curious about your next step
We'd love to hear about your outcomes and ideas. Let's learn from each other and inspire one another, for every great journey begins with a single step.
