Set Your Strategic Direction for Sustainable Business Success
Wednesday, March 9th, 2011
Having a clear strategic direction with which the Board and senior management team are highly engaged is a critical factor in building a sustainably successful business.
Benjamin Franklin said “In this world nothing is certain but death and taxes“. In the business world there is another certainty – that economies peak and trough and, over time, businesses will have their sustainability challenged.
Many new businesses fail within the first five years. Many long established businesses fail or suffer significantly further down the track. There can be myriad reasons for this, including lack of funding, poor leadership, inability to adapt to changing market demands and over-expansion.
The temptation for leaders, particularly during busy times, is to focus all time and effort on the ‘now’. In most businesses there are more than enough urgencies to fill the days of the senior management team. Dealing with operational issues is the ‘bread and butter’ of the job even for most senior people and is often the space where they feel most comfortable and productive.
However, without an agreed overlying strategic direction and a good business plan, it is easy for the management team to lose focus on the core things necessary to ensure ongoing success and profitability. Often the Board takes responsibility for setting the overall strategic direction of the organisation, leaving the executive team to ensure the strategy is delivered. Sometimes the Board is more ‘hands off’ in this respect and leaves the CEO and senior team to develop the longer term vision and strategy for the business.
In either case, the critical factor is that time is set aside on an annual basis for a high level review to:
- Evaluate the current state of play for the business and the potential issues, challenges and opportunities faced by the business
- Agree (or, if already agreed, review) the longer term vision for the business
- Agree (or review) the key strategies to achieve the vision
- Agree the key business objectives for the forthcoming 12 months
When that has been done, the other critical step is that management takes time to build an annual business plan (or plans) around this. The plan will be the roadmap for achieving your 12 month objectives and will cover such areas as financial budgets, resource requirements, and specific projects the business will be engaged in to meet the overall objectives.
An investment of time in regular review and planning is a very smart step towards building a sustainably successful business. This needs to be driven by the leader and the leadership team.