Need to Know: The 1, 2, 3s of Implementing Strategic Initiatives
The most successful business leaders know how to think through a series of questions in an effort to weigh their strategic initiatives. Chris Hitch, adjunct lecturer in management, innovation and entrepreneurship at Poole College of Management, explains a three-step process businesses should consider.
Step 1: Assess
The first questions businesses need to answer are, “Where do we play?” and “How do we win?” The first question addresses external factors outside the organization, such as:
“The key point here is that you need to look outside first. If you only look inside, you’ll find yourself as the very best typewriter repair shop out there,” Hitch says. “Meaning, operational excellence is not everything. Yes, you must have a good product or service, but it has to be something people are willing to pay for.”
In terms of how to win, businesses need to focus on their key differentiators. “What is different or valuable in the eyes of your customers or prospects?” Examples of these differentiators could be:
Step 2: Create
Businesses need to create a strategy to figure out where they can get the biggest bang for their buck. Start by examining your portfolio to see what products and services your clients and prospective clients are most willing to pay for… and pay at a premium!
The next step is evaluating the capabilities you need in order to successfully execute that strategy – including your business’s time, talent (workforce) and financial resources.
“Strategy is not a grocery list. Strategy is as much about what you choose what NOT to do, as it is what you choose to do.”
Lastly, to create a strategy, the business must determine what systems are in place to monitor those objectives. There are a variety of performance metrics in use today – KPIs (key performance indicators), OKRs (objectives and key results) and others. A key, Hitch says, is blending a combination of leading and lagging metrics – ones that measure your performance today, and in the coming weeks, months and years. Examples of metrics may include:
- What is your company’s percentage of market share? Is it growing?
- Are you growing profitability?
- Are you growing in customer satisfaction?
- What is the percentage of revenue or units sold that are coming from new products or services from the last few years?
- How much revenue is coming from existing clients versus new clients and services?
Step 3: Execution
When executing your strategy, you need to ensure all levels of the company are engaged in the mission. You need to have a clear understanding of the timing and sequence of the moves.
Moreover, you need to recognize that executing a strategy requires change. And, as Hitch says, “No one likes change.” Leaders need to know how to be effective in influencing those around them to achieve their buy-in. Remember, a strategy is only as good as the ability to execute it.
This post was originally published in Poole College of Management News.