Have you developed a written winning strategy for your business? If so, how well is it working for you right now? Of the Four Decisions needed for scaling your business, strategy is one. People, Execution and Cash are also important to your business. Must you have your strategy nailed down before you are able to make progress? Must strategy come first for business success?
If you start with strategy, you create several advantages for your business. You determine exactly what you want to accomplish, and within what time frame. You decide how you want to allocate your resources. You determine what you are promising customers, where and whom you are targeting, and what you are going to sell to them when you’ve got their attention. Your strategy describes the position you want your business to hold in the market, and its competitive advantages – or the ones you want to develop. Above all, your strategy articulates your “why”, and your ground rules for how you and your team are going to engage.
Your strategy, however well written, is just a document. It takes people to implement it, and depending upon the size and age of your business, you may or may not have the horsepower on board when you write it to know what’s truly possible. If you don’t have the right people doing the right things, and if you don’t have a culture that is engaging employees to do their best work – your very best strategy may be a moot point. Your management of the people dimension affects whether your team is capable or incapable. It determines whether they are resistant or apathetic or supercharged to accomplish your strategic intentions.
With or without a formalized strategy, effective execution means your processes run without excess cost, time, errors and drama. Well-executing team members are responsible for their individual and collective results. Communication flows up, down and sideways across functional groups. Problems are identified promptly, at the closest point to their point of origin, and resolved promptly. In a company that executes well there is a rhythm that creates the structure for daily, weekly, monthly, and quarterly interaction. And at the end of every meeting, each participant knows Who is going to do What, and by When. They know that at the next meeting there will be follow-up on the Who-What-When commitments. And the company that executes well keeps count. Each individual and group knows the key numbers and how they are performing against them.
Which comes first, the strategy or the cash? You needed cash to start your operation, cash is the desired output from business activities and it’s the fuel for growth, so it’s an integral part of any strategy. If you determine that cash is your current top priority, you could choose to take actions today that help you stockpile the funding for a strategy that may be a year or two away. Cash gives you flexibility and opportunity. You can build it by reducing errors in work processes, by shortening cycle times, or by modifying your business model.
If it looks to you like the opening question was a trick, you may be right. Many companies have assumed that a strategy is a fixed sort of thing that must be perfected before it is implemented. The traditional strategy was intended to last for 24-36 months. But in reality, many of the multi-year, locked-and-loaded strategies are obsolete by the time they are communicated, much less implemented. Effective strategies evolve as markets change, supported by people and execution and fueled by cash. The Four Decisions together form a framework that helps a business grow. Where do you need to start with your business? That’s something we can talk about.