8.5 MIN READ
As a business owner, you’ll find yourself increasingly delegating more and more tasks as your business grows. But as CEO, the one thing you always get to hold on to, no matter the size of your business, is your strategy.
Over the years, strategy has become somewhat of an overused buzzword thrown haphazardly around the business world. But strategy should not be destined for the buzzword graveyard. It deserves better than that because it’s not just a convenient, catchy word. Strategy is important.
So, what exactly is it?
There are countless definitions of “business strategy”—there are even advanced degrees on the topic—and even more resources on how to create one.
The typical definition goes something like this: A business strategy is a set of guiding principles that generates a desired pattern of decision-making.
A good strategy should, therefore, act as a roadmap that outlines a set of rules defining the actions you should—and should not—take and things you should—and should not—prioritize to achieve your desired goals.
But I have an even simpler definition. Ultimately, a business strategy boils down to the business you’re trying to build—your vision.
Your vision really should be the driving force behind your business strategy.
Strategy Starting Point: Define Your Vision
Without a vision, a business is like a ship without a rudder, constantly in danger of drifting aimlessly. Your vision pulls your business forward. Therefore, when creating a strategic plan, setting a vision is the natural first step.
There are countless companies that sell leadership and strategy models, tools, and courses. But none of these can replace the value of you taking the time to determine what matters in your own business.
Contemplate the vision you have for your business. Ask yourself the following questions:
- What does my business stand for?
- What do I value?
- What impact do I hope to make?
- What segment of the population do I wish to serve?
- How do I want my business to be viewed?
- What type of growth do I want to experience?
When considering your responses, remember there are no right or wrong answers.
One of the greatest myths around entrepreneurship is that when it comes to questions and decisions about your business—whether those questions and decisions are about growth or goals or structure or what have you—there is a right or wrong answer.
There’s simply your answer and what’s right for you.
Break away from looking for the right answer and instead try to find your answer. In doing so, you’ll stop shoulding all over yourself.
When creating and evaluating your vision, keep the following in mind:
- Your vision should be concise and give purpose to your business.
- Your vision should be inspiring but also realistic, with the power to motivate. Strive for big picture aspirations over simple objectives. Allow yourself to dream, but don’t stray too far into fantasy land.
- Your vision will be the cornerstone for everything you do in your business and will help link your actions to your strategic goals.
A strong vision will help you connect with clients and your community, and help you better understand whom you serve and how you add value to their lives.
If you aren’t able to clearly articulate your vision, you aren’t ready to build your business strategy.
Tying Your Vision, Mission, Values, and Strategy Together
Many business owners fail to understand the distinction between vision and mission, not to mention where values come into play. So how exactly does your vision differ from your mission? And what roles do your vision, mission, and values play in this whole thing we call strategy?
Your mission statement is your business’s reason for being—it’s actionable.
Your vision statement is about where your business is going—it’s aspirational.
Your mission statement is based in the present and offers a brief description of your business’s fundamental purpose. It is designed to convey a sense of why your business exists. (Pro-tip: the secret to creating a great mission statement is focusing on why your business exists, not what services your business provides.)
Your vision statement is based in the future and is meant to inspire and give direction to your business. It is an articulation of your hopes and dreams for the future, what kind of mark you want to make on the world with your business, and how you see your business evolving into the future. Your vision reminds you of what you are trying to build.
Your values represent your highest priorities and deeply held driving forces. Core values are meaningful statements that define what’s important to your business and govern how you conduct it. Your values underline your work, how you interact with others, and which strategies you will employ to fulfill your mission. Your core values are your governing principles.
So how do your vision, mission, and strategy interact? Your strategy outlines ways of using your mission to achieve your vision. Your mission statement, vision, and values are all core elements of your business, but your vision statement should serve as your business’s north star. It is both the inspiration and the framework for your strategy. The fundamental purpose of strategic planning is to align your business’s mission with its vision.
Values ground the strategy and provide a touchstone for developing appropriate tactics for achieving your vision. If any part of your strategy is in opposition with your business’s values, it should very clearly be reconsidered.
Your business strategy must be tightly tied to your vision, aligned with your company’s mission, and congruent with your values.
What to Consider When Developing Your Strategy
- Clear, long-term objectives. Your strategic plan must be realistic, but should also be visionary. When defining your objectives, ask yourself questions like “What market(s) do I want to serve?” and “What services will I offer to get to my desired future state?”
- Opportunity. Think about what opportunities might exist in the future, and how your business might evolve over time. This is key to positioning your business as proactive versus reactive. Obviously none of us can predict the future, but that doesn’t mean we can’t plan for the future we hope for.
- Innovation. You must ensure that the services you plan to build are unique, with clear differentiation, and that they are, of course, aligned with your values. One of the most important decisions you’ll make as a business owner is which segment of clients you want to serve. Once you’ve identified your niche, you can focus your entire business in a laser-like way on meeting their needs.
- Risks and failures. Factor risks into your strategic vision and allow your business to accept failures, because they are inevitable. Let insights gleaned from both successes and failures inform your strategy, which will evolve over time. Strategy should be amenable—not resistant—to change.
- Ensure your strategy is true to your vision. Your strategy should adjust to your vision, not the other way around. Your vision is the anchor that holds all the rest together—don’t let it be buffeted by the winds of change.
Bringing Your Strategy to Life
One of the most critical elements in any strategy is its translation to reality. No matter how good your strategy looks on paper, the only true measure of success is its execution.
The majority of strategy failures occur because of a business’s inability to implement and execute a plan. A great strategy without execution is one of those “a tree falls in the forest” moments. For many business owners, bridging the gap between strategy and execution can feel daunting. But it’s critical.
If your strategy is poor, even the most excellent execution won’t help you; if your strategy is brilliant but the execution is flawed, it will undercut your strategic intention.
Once you have your strategy, you must align this strategy with your (and your employees’ if you have any) day-to-day execution-level work. By doing so, you connect the actual work of your business to the broader purpose. Solid execution of tasks can’t really be considered a win, no matter how great the work being done is, if that work isn’t tied to a long-term goal.
You, and any employees you have, must understand how your daily tasks relate back to your strategy. This understanding is really the bridge between strategy and execution.
Your strategy, just like your business, shouldn’t be stagnant. It should evolve over time. It is meant to be a road map for your business, not to lock you in a particular direction.
Amazon CEO Jeff Bezos is famous for saying, “We are stubborn on vision. We are flexible on details.”
Great businesses need to stay focused—and “be stubborn”—on their high-level vision but flexible on how—meaning the strategy by which—they achieve that high-level vision. The best, most successful businesses are those that are, like Amazon, stubborn on vision and flexible on strategy.
Because strategy is a long-term plan, it may need to change in response to internal or external changes. But strategy changes should only happen with considerable thought. Sit down once a quarter and evaluate what’s working and what’s not. If you feel your strategy is failing, ask yourself why. Has it strayed from your vision? Is your whole strategy a failure, or can you tweak some tactics to get back on track? Tactics are much more flexible, so if some tactic isn’t working, adjust it and try again.
It is much easier to do some spring cleaning than a complete overhaul. If you evaluate your business regularly, it makes it much easier to make adjustments.
A periodic review of your strategy will help you stay the course if things are working, set a new course if required, get your business back on track if necessary, and determine whether any modifications are needed.
A lot of advisors don’t have business plans, or a strategy that’s laid out on paper. Many simply keep track of their business in their head. In fact, it likely consumes much of their thoughts.
You may be wondering what the value of going through the formal process of crafting a business plan and strategy is when you can keep track of your entire business in your head. A business strategy helps you focus. When you’re in the thick of building a business, it’s easy to get stuck in the now. But as a business owner, you must always keep an eye towards the future.
A strategy helps keep you focused on reaching your core goals, and it holds you accountable of achieving them in the ever-changing, distraction-filled day-to-day.
About the Author
Alan Moore, MS, CFP® is the co-founder of the XY Planning Network, a support network for advisors looking to serve next generation clients. He is also the CEO of AdvicePay, the first and only compliant payment processor for financial advisors. He is passionate about helping financial planners start and grow their own fee-only firms to serve Gen X & Gen Y clients largely ignored by traditional firms. Alan has been recognized by Investment News as a top “40 Under 40″ in financial planning, by Wealth Management as one of a “The 10 to Watch in 2015″, and was the first recipient of the NAPFA Young Professional award in 2015. Alan frequently speaks on topics related to technology, marketing, and business coaching, and has been quoted in publications including The Wall Street Journal, Forbes and The New York Times. He is also the host of XYPN Radio, one of the largest podcasts for independent financial advisors. He currently lives in Bozeman, MT so that he can hit the slopes on powder days.