Many entrepreneurs do not even know what a strategy is, never mind a “good” strategy so it is not surprising that so many get lost in this process.
The definition of a strategy is: “A plan of action designed to achieve a long-term or overall aim.”
Creating a strategy should simply help you identify where you are now (lets call this A) and where you want to be (lets call this B) and to then put a plan in place to get you from A to B.
A “bad” strategy has little or no chance of getting you from A to B, or wastes a lot of time and/or money in the process.
A “good” strategy gets you from A to B as fast and efficiently as possible.
The difference between good and bad strategy usually comes down to 3 things:
1. Good diagnosis
Good strategy requires an accurate diagnosis of what is holding you back from achieving the results you want – the obstacles to moving from A to B.
For example, one of my clients, David Walker, had spent 9 months writing a book, developing a course and was then focusing on selling these at events. He was struggling to get sales, so he decided to offer more free content to increase the number of people who showed an interest.
However, no amount of doing this helped – the fundamental problem was that there wasn’t demand for his product. When the diagnosis changed, he realised his strategy needed to change to find a product that there was demand for. As soon as he did this, selling the product was much less difficult!
2. Use others’ experiences
Good strategy utilises input from experts who have relevant past experiences and insight on how to most easily overcome the obstacles.
For example, when Mark Zuckerberg was in a tough patch with Facebook, he sought advice from one of his mentors, Steve Jobs. Steve suggested Mark needed to reconnect with his long-term vision for the company, even going so far to suggest a specific temple in India that would be worth visiting.
Zuckerberg has been great at utilising input from mentors, another example of this would be from Don Graham who advised him to hire Sheryl Sandberg (and advised Sheryl to work for Mark), resulting in Facebook moving to a new era.
3. Simple underlying concept
Good strategy has a clear underlying concept or theme that explains how to overcome the obstacles to success. Rather than a load of separate, complex workstreams, tasks and milestones, good strategy provides a simple, integrated approach to getting the desired results.
In Richard Rumelt’s excellent book, ‘Good Strategy / Bad Strategy’ he shares the story of a CEO who has an ambitious growth goal of 20% annual revenue increase, with a 20% profit margin. When Richard asked the CEO what “had to happen to achieve this ambitious goal?” he was seeking to understand the underlying principle of his strategy. But the CEO pointed to a long list of company values (such as ‘we will foster and open and honest work environment’) and suggested the key to success was having the drive to succeed and setting targets high.
In this case study, the CEO was confusing goals (and motivation) with strategy.
Strategy should be simple. It can probably be communicated in one sentence, and takes advantage of some strength, weakness or position that is unique to the business.
For example, one Parentpreneur I’ve worked with was experiencing great financial success with their training business but was heavily reliant on a single client for 80% of their income. This made it difficult for them to increase prices, plan expansion or feel confident of future income. Their goal was to have 6 clients (of which no single client would provide more than 25% of revenue) to provide a better foundation for growth.
They had an advantage vs. competitors because their Managing Director had some celebrity status as an ex-Hollywood actor. As a result, their strategy was to forge strong relationships with a small number of clients using their celebrity status as a ‘hook’ to spark engagement with key senior business leaders who would normally be difficult to make contact with.
This isn’t a complex strategy, nor does it attempt to be the strategy ‘forever’. this is the strategy this Parentpreneur followed to get from where they were to where they wanted to be. They achieved it in 9 months, then set a new vision for ‘where they want to be’, with a new strategy.
How to create a good strategy
Creating a good strategy can be mentally challenging, but when you have a good strategy, achieving your goals is a lot easier!
So, to create a good strategy:
- First identify where you want to go (B).
- Review where you are now (A) and the reasons you aren’t already at (B).
- Diagnose what obstacles stand in your way, that if overcome, would men you achieve (B).
- Speak to others who have experiences with achieving (B) and get their view on how to overcome the obstacle(s) you face.
- Develop a simple core principle of your strategy that underlies everything you need to do.
- Add detail where needed to explain how you will apply the strategy to each major obstacle, and how parts of the strategy work together to succeed.
- Identify how and when you will review your strategy to decide whether you need to make changes (so you don’t end up waiting too long , or changing it too soon).
This process is actually a lot harder than it sounds – for example, just point (1) above – setting the vision is very difficult… Most people’s visions are either too close (not ambitious enough) too vague (e.g. make enough money to give me financial freedom) or feel disconnected with reality (e.g. become the best widget company in the universe, and make $100bn).
Fortunately in my upcoming articles I’ll help you set your goal, and then help you lay out your strategy to get there. (Join the Parentpreneur Accelerator Facebook community to be notified when these become available).
The really good news is that as a result of working with lots of Parentpreneurs who have similar goals (B) and situations (A) to you, I can share the strategies that have been shown to successfully overcome the obstacles they faced.
For example, if you are an early-stage Parentpreneur wanting to create a successful startup business, I highly recommend you watch this video and use this checklist to help you identify and follow the right strategy for you to follow.