As a Senior Certified Gravitas Impact Business Coach, I have worked with many mid-size companies to maximise their growth opportunities and become market leaders in their industries. Working with over 300 companies, I have seen time and time again the difference made in having a well-defined simple core strategy that is embedded, communicated and alive throughout all areas of the company.
As a result of my twenty-plus years of coaching business leaders to develop and implement business strategies that work, I was asked by Gravitas Impact to write about creating successful strategy in business for their series of monographs.
With support from fellow Gravitas Impact coach, Hans Schulte, my monograph Radical Alignment to a Core Strategy: Increased Net Income and Team Alignment is now available to purchase on Amazon.
Radical Alignment to a Core Strategy focuses on gaining clarity on the elements of company strategy, forming your core strategy to the extent of being radical, and then aligning every aspect of your business to that strategy. The monograph provides a step-by-step process that is simple, practical, and includes actionable tools that integrate with Gravitas Impacts’ 7 Attributes of Agile Growth throughout.
Why is strategy so important to a company?
Strategy is important because it drives the right revenue growth. It is also how companies can differentiate from their competitors. Importantly, strategy also influences an organisation’s ability to achieve above industry average gross profit and bottom-line profits.
Strategy provides organisations with direction around where their businesses are heading – the long term direction (10 to 30 years out) and the medium-term direction (3 to 5 years out).
Strategy answers the question ‘why you are here as a company?”. It is the purpose of your company, the difference you are making in the world as a company, and it sets the rules around what you should and should not do as a company.
Simply, strategy is the creation of a unique and valuable position, involving a different set of activities from competitors. In today’s fast-moving market, products can easily be copied and rebranded, it is the activities you undertake as a business that sets you apart from others.
In my experience, companies that have been serious about business growth always have a clear and simple strategy that keeps them focused and on track. When it is clear and simple, your company can better align its people to the strategy. As a result, whilst your strategy is executed, your people will know what they are executing and why they are executing it in a particular way.
What I have experienced when a company does not have a company strategy.
Many companies do grow without a company strategy, however, at some point, I have seen the following happen:
1 – The CEO or General Manager has a vision for the company, however, the people within the company do not understand it, or know where the company is heading. There is no clear long-term direction.
As a result, the divisions within the company are pulling in different directions. The CEO or General Manager can’t align the people to the vision, which is causing confusion.
This results in the company not achieving the set targets year after year. In some of the worst cases that I have seen, growth in sales eventually slows, stops, and in some cases, declines.
2 – Staff turnover is another symptom that I have seen as a result of having no clear direction for the company. People cannot see the future of the business, therefore there is no certain future for them. This causes them to move on to other opportunities.
People also want to have a purpose in life. If the company has no clear purpose, then people feel like they are not making a difference. This causes them to move on.
3 – I have seen companies pour an enormous amount of resources and cash into projects that do not deliver the desired goals and results because their strategy was unclear or non-existent.
Company versus divisional strategy
Company strategy, also known as a corporate strategy, applies to the business as a whole, whereas divisional strategy applies to a distinct unit or branch of the company, e.g. sales division, marketing division, people, and culture.
Divisional strategies are succinct, stated in only 3-5 sentences in length. They are also relatively short-term, focusing on the next 12-24 months in time.
If you have divisional strategies but no company strategy, you will not know if you are headed in the right direction as a company. For this reason, the divisional strategies must align with the overall company strategy. They must lead to the achievement of the company strategy through their execution.
To be clear, divisional strategies are not company strategies. They are an enabler of the company strategy being achieved over the medium and long term.
The benefits of having a clear company strategy with supporting divisional strategies include:
- It is easier to communicate your company’s strategy – the long-term direction and purpose for the company – to all stakeholders, employees, suppliers, customers, shareholders.
- It is easier to communicate what your company should be executing to achieve the set strategy.
- Your people can see and better understand what they are contributing to.
- Your company can align its people to the strategy, to what is important to do, which means that execution of the strategy can be achieved.
- You will know how your company is differentiating itself from your competitors, driving your top-line growth and better than industry average bottom-line profits.
- It is much easier for your people to say no to things that do not align with your strategy. This in turn speeds up your company’s execution as well as decision making within the company.
As they say “Great companies say no more often than they say yes”. You and your people will know what is aligned and what is simply a distraction to the company.
In my experience, companies with a clear strategy and a deep understanding of each element, outperform their peers year after year. In particular, those companies that stick to their company strategy and execute it well, with the right people, are the ones having fun on the climb to their success.
Communication is key
In Radical Alignment to a Core Strategy, I also discuss the importance of communication and share how you can create a system that encourages effective dialogue, reporting, and messaging that is true to your business. I have seen companies fail because of a lack of clear and consistent communication.
Core values versus core strategy
Your company’s core values align with your core strategy, but it is important to note that they are also separate entities within which everything else is framed. I go into further detail in the book, but, essentially you cannot have a thriving business without having both clearly defined and integrated into every aspect.
For example, if you have a strategy that requires the best people to fulfil a particular role, it is easier to attract those people to your company if you have a clearly defined set of prominently displayed values on your website and in recruitment advertisements. Today’s top talent wants to work for a company that aligns with their values and utilises their skills. You will also minimise ‘people fires’ if your employees are all on board with your core strategy and share the same values as your company.
The Gravitas Impact difference
Creating a strategy that encompasses simplicity and easy execution is possible, just not achievable overnight. It takes time and hard work, but the investment in both is worth it. Radical Alignment to a Core Strategy is a combination of tools, frameworks and case studies designed to help you gain clarity and begin radically aligning your business to your core strategy.
I am excited and feel privileged to share my insights and experience over the decades in helping mid-market managers and CEO’s achieve sustained growth for their businesses. My goal is to provide you with the tools you need to create a meaningful Core Strategy, set your North Star – your ultimate goal and establish a line of sight and pathway to achievement.