Whilst our collective focus remains on protecting lives and livelihoods as a result of the pandemic, positivity in the market still exists. Recently, we have seen an increase in economic momentum here and overseas as businesses adapt to the current reality and begin to think about the immediate future and beyond.
Working with business owners and senior leadership teams as they review their medium-term strategy, the questions that I have been asked include:
- Do we stick to our medium-term strategy, 3 to 5-year strategy?
- Is our medium-term strategy still relevant?
- Is our medium-term strategy correct?
- Are we heading in the right direction?
- Are there components that need to change in our strategy?”
Some have wondered if there is still too much uncertainty to be able to move forward or feel that they cannot see enough of what the future will hold to be able to commit to a plan beyond the next few months.
My advice is to carry on and do as other successful companies are doing and start planning for post-pandemic now. Failure to do so and you run the risk of being left behind the rest of the world. The following are my tips on how to start the process of re-evaluating a medium-term strategy (three years out) that works.
Pay attention to trends
I always recommend beginning the re-evaluation of your strategy by looking at the trends in the market and asking:
- What are the trends that could or will affect your business during the next three years?
- What mega-trends have you seen?
- Which trends have been gaining traction recently?
- Which trends will apply in our market place over the next three years?
- Which trends could or will be embraced by our customers?
Look closely at the trends in your market. Have there been/will there be significant changes in technology, distribution, product innovation, markets, consumer behaviour, regulations, and environmental and societal trends that will affect your business during the next three years?
There are negative and positive trends, and both require observation and reporting on. Shining a light on the negative trends can often lead to breakthroughs that turn the negatives into positives and create a competitive advantage. I have seen this happen with companies I have worked with over the years many times.
Once you have identified the trends that will affect your business, rank them from most likely to have an impact to least likely over the next three years. Research is key to deciding the order of ranking. Six is the maximum number of trends to focus on so as not to become overwhelmed entirely with variables. The information gathered will help you determine the direction of your company’s medium-term strategy.
Set your 3HAG
3HAG stands for your 3-year highly achievable goal and includes:
- Setting your revenue target.
- Deciding where you will operate geographically.
- Deciding which products and services you will continue to sell.
- What profit return you want to see?
Once you have set your 3HAG, the next steps to look at include:
- What are the key thrusts you need to achieve?
- What key capabilities need to be put in place to achieve your 3HAG?
- What differentiators will you need to have in place to achieve your 3HAG?
Key thrusts are growth in market segments, geographical expansion, new brands, new products and company acquisitions that will affect your business.
Capabilities are the assets, people, equipment, technology and processes in your business.
In doing the above, your 3-year strategy will become clear. The next step is to identify the top five priorities for 2021, which will help you achieve your 3HAG.
Choose five priorities that will help you to achieve your key thrusts, capabilities and differentiators in three years. I recommend choosing only five because I know that most businesses have limited resources and their chances of completing their goals diminish the more they set for themselves.
Accelerate to accumulate
When driving, you accelerate as you approach the hill to make sure you have enough momentum to make it to the top. In business, your medium-term strategy is the accelerator that maintains growth while climbing to the top of your market. During uncertain times, having a clear medium-term strategy also helps to power your way through the crisis. We have seen businesses who have been applying the accelerator on and offshore this year make steady gains. I encourage those who haven’t paid attention to their medium-term strategy to do so now. Treat 2021 as an investment year to fuel and support growth for the medium-term and long-term and return financial results.
Remember to communicate your business strategy to your people and involve them in the process so they can see your business has a plan for the future and that your company is being steered in the right direction.
Work on your medium-term strategy now so you can start the New Year with the accelerator pushed to the floor.