Most of the executives nowadays do not recognize the importance of having a clear, simple and succinct strategy statement that everyone can easily understand and use it to make difficult but right choices both in easy and difficult times. Entrepreneurs often fail to explain what is the strategy of their organisation is because they have never bothered about formulating one to run their businesses while keeping it on the right track. In fact, a simple and concise strategy is necessary as it highlights the key elements of a corporate strategy and also helps you to craft a strategy statement that everyone in your organisation can understand and relate to.
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It is a reality that most entrepreneurs are unable to articulate the objective, scope and advantage of their business and if they cannot do so, nobody else can do it for them. In fact, the companies that do not have a simple and clear strategy statement cut a sorry figure in the long run and things get even worse for those who never have had any strategy at all. This is because a huge number of executives and employees working for that organisation get frustrated and cannot work properly due to the absolute absence of the any strategy or in words directions to follow and goals to obtain.
Many kinds of complaints abound in such companies, most important of which are that employees work so hard and finally take an initiative but it is simply turned down because it does not fit into the strategy or whether any employee should pursue a market opportunity because he receives mix signals from top executives.
Clear Definition Helps:
So far we have discussed the disadvantages of not having a clear strategy. On the contrary, a clearly defined strategy definitely helps. Two main things happen when any organisation has a clear strategy to follow.
First of all, executives know what they are trying to achieve and therefore, setting goals and target becomes much easier.
Secondly, the implementation in such organisations becomes very simple. This is because everyone in the organisation can easily relate to the strategy because its essence is easily available.
Elements of a Strategy Statement:
Basically there are three main elements of any strategy statement that are objective, scope and its advantages. Any strategy must clearly define at the time of its formulation what it will achieve in the long run. It should be time bound, specific and measurable.
The scope of any strategy is also very important as it explains what your business does. What are the boundaries beyond which it will not venture? The scope of any strategy is all about what you products or services are and how you are going to deliver them. An ideal scope statement should have three dimensions that are it should be vertically integrated, should be for a specific geographical region and customer oriented.
Finally, it is also important to ascertain what will be the advantages of your strategy statement. In fact, your competitive advantage should be the essence of your company. It explains how your business is different from others and what will it offers to end customers. It also highlights all the means you are going to use to achieve that advantage.
A Company Statements’ Hierarchy:
Organisational statements come from several resources and in many forms. They become more concrete, concise, unique, clear and practical once you manage to work your way down the organisational hierarchy. Take a look at the following illustration.
Developing a Strategy Plan:
It is not at all easy to develop a comprehensive and result oriented strategy plan. The first step of developing any such plan is to carefully evaluate the industry landscape in which you are operating and then create a great strategy. These analyses should include understanding of customers need and to segment them followed by finding unique ways of providing value to the segment you finally choose to serve.
Second part of developing a strategy plan is to find a sweet spot of development. This step is all about aligning customers’ needs with your capabilities in such a manner that your competitors are unable to imitate or match them in ever changing economical circumstances.
Process of Developing Strategy:
You need to involve employees at all levels of hierarchy and in all parts of the company in order to develop a strategy and later on the strategy statement that captures its essence in most communicable manner possible. Furthermore, everyone involved in process of strategy development should take a lot of pain and as much time as possible to craft a strategy that is clear, concise and simple.
The formulation of a strategy statement often involves heated debates among higher level executives when they fail to choose any single word that can explain their strategy in most simple manner possible. However, the final statement should not only be simple and brief but should be able to reflect all the main components of an organisation’s strategy. Similarly, the activity system map and value proposition chart should be attached with the strategy statement when it is divided among the employees and all the stakeholders of the organisation.
Similarly, the strategy statement should be cascaded in such a way that the person sitting at the higher level should become a mentor and teacher to the person sitting at the lower and the chain should continue. This will enable all the employees to incorporate the strategy in their behaviour relatively easily.
Finally, choose some powerful words for formulating your strategy statement as it is the words that actually lead to action. An ideal statement should be about 35 words or less and must contain words that truly capture the essence of your strategy in addition with motivating, encouraging and enabling the employees to work together to improve the long term financial performance of your company.
Concluding, a well thought out and carefully planned strategy is absolutely essential to run your organisation as effectively and efficiently as possible. A company without a simple but clear strategy is not going to succeed in modern competitive markets as it has no direction and guidelines to follow.