Knowing Where You Are Going
I have learned over the years that being busy and having a strategy are not the same thing.
You can work incredibly hard, answer every email, post every day, launch new products, attend events, hire people, build a beautiful website and spend a considerable amount of money—and still not be moving your business in the right direction.
Strategy is what gives all that activity a direction.
For me, business strategy begins with a very simple question: Where am I trying to go?
It sounds obvious, but many businesses don’t stop long enough to answer it. Are you trying to increase sales? Build awareness? Enter a new market? Attract a different customer? Become known for a particular service? Grow quickly? Become more profitable? Or perhaps simplify the business and do less, but do it better?
Those are very different objectives, and they require very different decisions.
Once you know where you are going, the next question becomes: Why would someone choose you?
This is where strategy becomes much more interesting. You cannot be everything to everyone. You need to understand what you offer, who needs it, what makes it valuable and why someone should choose your business instead of the many alternatives available to them.
Then you need to understand your customer. Who are they? Where are they? What matters to them? How much are they prepared to spend? How do they make decisions? What problem are you solving for them?
Sometimes we create what we like and then go looking for someone to buy it. Strategy asks us to reverse that thinking and understand the market as carefully as we understand our own product.
And then come the numbers.
A strategy that doesn’t eventually make financial sense isn’t much of a business strategy. What does it cost to deliver what you are selling? What is your margin? How many customers do you need? What are you spending to acquire them? Which part of the business actually makes money and which part simply keeps everyone busy?
Numbers have a wonderful ability to remove emotion from a decision.
Strategy is also about timing. A good idea at the wrong time can still be the wrong decision. Sometimes you have the right product but the market isn’t ready. Sometimes the opportunity is there but the business isn’t financially ready to take advantage of it. Sometimes waiting is the strategy.
And perhaps one of the hardest things I have learned is that strategy is as much about what you decide not to do as what you decide to do.
Not every opportunity deserves a yes. Not every social platform needs your presence. Not every customer is your customer. Not every trend needs to become part of your business. Not every new idea needs to be launched immediately.
There will always be another opportunity, another piece of software, another advertising platform, another event, another collaboration and another person telling you what your business “needs.”
Strategy gives you permission to say: That may be a good idea, but it isn’t part of what I am trying to accomplish right now.
That sentence can save a business an extraordinary amount of money, time and energy.
But strategy cannot be rigid either.
Markets move. Customers change. Technology changes. Competitors appear. What worked last year may not work next year. A strategy should give you direction without making you afraid to change course when the information in front of you changes.
That is why I believe good business strategy is a continuous cycle:
Decide where you want to go. Understand where you are today. Choose how you intend to get there. Execute. Measure. Learn. Adjust.
And repeat.
After years of helping build businesses, managing operations, advising people and eventually creating businesses of my own, I have come to believe that strategy isn’t about predicting everything correctly.
Nobody can.
It is about making decisions with intention.
Before spending the money, ask why. Before launching the product, ask who it is for. Before accepting the opportunity, ask whether it takes you closer to your objective. Before changing direction, look at the information. And before copying what another business is doing, remember that you may not even be trying to reach the same destination.
A successful business doesn’t need to do everything. It needs to know what it is trying to do—and make enough of its decisions in that direction.