Creating a Business Strategy

On a scale of one to ten, having a good business strategy rates about a fifteen!

No matter what kind of business you have — whether you sell products or a service, as the saying goes, “if you fail to plan, then you’re really planning to fail.”

Creating a strategy can mean the difference between you working 60 to 80 hours a week all year long — and then breaking even, or worse, losing money.

On the other hand, many successful entrepreneurs who have a strategy work fewer hours and make piles of money — and they usually attribute their success to having a strategic plan and following it.

So what is strategic business management? Very simply, it’s the process of defining the goals and objectives for your business, creating an action plan so you can reach them and then following the plan.

How do you create a strategic plan for you business?

1. First, know what your vision for your company is. If there were no barriers, nothing stopping you from taking your company as far as you could — what would that look like?

2. Next, what are your company’s core operating values? What are its guiding principles? In other words, why are you in business and how do you do business?

3. Now create a 3 to 5 year plan. Your long-term plan is based on the broad objectives that will help you get from where you are now, to where you want to be.

4. Develop a plan for this year. These are the specific objectives you plan to accomplish this year that will lead you closer to your long-term goals. Remember to be “SMART” when setting your annual goals (Specific, Measurable, Attainable, Realistic, Time-oriented). Include a list of the barriers that are stopping you from getting where you want to go. Figure out what resources you’ve already got, and what resources you need to get you past those barriers. And then create an action plan that clearly lays out how you will achieve your goals. Involve key employees with this part of the planning process.

5. Create a set of milestones or benchmarks. This is very important, so that you can measure your progress.

6. Share the plan with your employees, and anyone else who will be involved in the process. Your annual strategy is the roadmap that will make sure everyone ends up at the same destination — but to be effective, everyone needs the same map!

7. Put the plan into action. Now that you have the roadmap, it’s time to begin the journey.

8. Check your progress. Just like any trip, you need to check the map every now and then; to be sure you’re still on the right road. If something isn’t working, the sooner you figure it out and make the necessary adjustments, the sooner you’ll be back on track.

9. Follow the same cycle next year. (Dream, Plan, Act, Check).

Creating a busi

Strategy As Invention

Rather than view strategy as a selection of options, here is another approach: creation or invention.

Strategic planning is not strategy

Strategic Planning, often synonymous with Annual Planning, details how you are going to get where you have decided to go. It is a description of how you will achieve your goals — those milestones you established in structuring your business plan. Strategic Planning is operational in nature, it examines the particular actions you intend to take over the coming period. Strategic Planning can be critical — and after you have a Strategy, it is often a good idea to develop a Strategic Plan.

But Strategic Planning is not Strategy. Strategy is the “what” you and your organization are going to be, and the broad approach to how you are going to do that. For instance, your company will become the number one vendor of internet-hosted medical records applications, achieved through freeware distribution to HMOs and clinics, paid for with a back-end, per-patient royalty. Strategic Planning looks at the details of how you will get there — which associations you will joint-venture with, how many sales people you will add this year, what type of advertising you will use, whether to pay for page-views or click-throughs, etc. The strategic plan will itemize the specific actions you will take in a given time frame, and the specific results those actions will produce.

But imagine filling your new car with gas, turning the ignition key, putting the car in gear, getting on the freeway, and putting the pedal-to-the-metal. Full speed ahead. Imagine that for a moment. Wait a minute — where are you going? Many organizations jump headlong into the strategic planning process, without becoming clear about where they are going. Sure they have a direction – North, perhaps; into the Internet Applications space, perhaps. If you execute the plan, your company will surely wind up somewhere. But is it where you wanted to go? Strategy defines the destination, and whether you will take a scenic way or a fast way, and if you want rest stops. Strategic planning identifies the specific highways and the specific streets.

Have you bothered to think about where you want to go recently? Most entrepreneurs, most companies, started with an idea of what they were trying to create. But that may have been a long time ago. Perhaps it’s time to consider this question again.

Strategy is not a set of options

Imagine you are in your car again. This time, it’s Sunday, and you and the family are going for a drive. Where are you headed? “We’ll let’s see”, you say to yourself, “How much gas do we have, and which roads have the least traffic?” Many companies think strategy is about evaluating a set of options, often in terms of available resources, or a competitive response. They say things like — “We have only 12 development resources available to us, which means we can bring two key program feature sets to market, and XYZ Co. has just announced compatibility with our databases. What are we going to do?”

Strategy is not incrementalism or inertia

Or they consider strategy in terms of increments. Last year you increased profits by 20%; does that mean this year you should shoot for increasing profits by 20%. Or 25%? Or, since you added three new modules last year, and reduced customer response time by 33%, should you plan to do the same, or something a bit better, this year?

These would be worthy goals, and this approach is valid. But accomplishing these kinds of targets will not fundamentally alter your company’s relationship to the marketplace. Nothing will really be changed — not you, not your people, not your company — and not the world.

It’s been said that insanity is doing the same thing over and over again, and expecting different results. When you do the same things, only better, only harder, only more, only smarter, what you’ll get is more of what you’ve already got. That’s fine, as long as you’ve determined that more of what you’ve got is appropriate for this stage of your company’s life cycle.

Strategy is an invention

Strategy is something you make up. Your strategy is a statement of what you will do as a company to realize your corporate vision: what specifically will you accomplish, what meaning will your company have, and how will you create value and profits. Don’t ignore your past results. Just don’t allow your strategy to be constrained by them. Don’t ignore the marketplace. Just don’t fall into the trap of letting your competitors’ actions define what yours will be. And certainly don’t ignore your customers — just don’t think that your customers’ wants and desires are the only measure of what you should seek to accomplish. These references — past results, markets, competitors, customers – must be taken into account.

And then, what it boils down to is this: your strategy is the direction your company will take, because you said so.

An invented strategy inspires you. Because it fulfills your vision for your company, and because you see how the realization of your strategy makes an important difference in the world, it inspires your team, your customers, your prospects. An invented strategy energizes all your constituents, where incrementalism just seems like more work. An invented strategy can propel your enterprise to greatness. An invented strategy can call forth achievements beyond what you currently consider possible. Breakthroughs and blockbusters are never founded on incremental improvement. Like Athena, they spring from the heads of their inventors. And invented strategies can change your company’s relationship to the marketplace and to the world.

Inventing strategy

The route to creating strategy is simple — asking the right questions.

What direction can the company take *now* to realize your vision? What value proposition will you offer customers? What meaningful difference will you make in your marketplace? What meaningful difference will you make in your world? How do you want to affect the lives of your people, your customers, your clients? Your family? Answer these questions and you are on road to inventing your strategy.

Are you building something totally new, or are you improving an existing idea? What are the dimensions of the impact you want to have? Will it be faster? Better? Cheaper? Easier? Safer? More luxurious? More convenient? More portable? More entertaining? More universal?

Next, from a high-level perspective, how will you marshal your resources and time your maneuvers to offer that value and make that difference? For instance, Microsoft’s desktop applications strategy is to let other companies originate product categories, wait to see which ones catch on, then bring out a lower cost Microsoft alternative, and market the heck out of it. This strategy defines a what, not a how. It doesn’t describe which products, how to develop them, or when they will be rolled-out.

There are no rules in strategy

Strategy is not evolutionary; it is revolutionary. Don’t assume the old rules apply or let them guide your thinking. Breaking rules may actually be a way to conceive of strategy. Ask yourself, “What rules can we break?” Consider which obsolete beliefs restrain growth in your company or in your market. Make up your own assumptions. Test them — first in your mind. Einstein conceived of the Theory of Relativity using what he called a gedanken experiment — an experiment in the mind.

Don’t worry about implementation…yet

While you are considering Strategy, don’t worry about whether you have the wherewithal to implement what you are thinking about. If you do worry in this way, you are likely to compromise from the get-go. There will be plenty of room for compromise later, if you must. Ignore the resource constraints which dog you throughout the year. You will deal with these when the time comes. Author Gary Hamil suggests that one definition of strategy include the “…quest to overcome resource constraints through a creative and unending pursuit of better resource leverage.”

I have my strategy. Now what?

Okay. At some point soon, you must consider implementation. Once you have formulated a strategy you believe will make a difference and lead to greater returns, you have to figure out how to make it happen given all the constraints you operate under. That is where the Strategic and Tactical Planning comes in. That’s the next article.

Superstar Growth Strategy

Here’s a strategy that has catapulted even the smallest of companies into super-growth mode by learning how to find an army of top producers to grow your business.

No matter how small your company is, you can hire a sales force that can catapult company growth like you never imagined (one company that took this advice grew 500% in two years).

No matter how large you are, you’re probably using the wrong criterion for hiring salespeople. How to attract star talent to your organization?
How to learn their weaknesses before you hire them (most companies have to hire a salesperson to find out all the problems they’re going to have- this will show you how to get rid of the lightweights in just five minutes).

What about you? How would you stack up against top producers as a person who has a “natural” ability to build your business?

One-person armies who were struggling have learned to re-think their model to hire sales-staff, and suddenly they are sold-out.

Multi-billion dollar companies had to understand the unique psychological profile of top producers and why they should hire for psychological profile rather than background.

The type of person I’m talking about is someone you can put in a bad situation with poor tools, no training, bad resources and still, within a few months, they begin to outsell your best salespeople or build your company in ways you never dreamed possible.

Two things drive the superstar and they are both critical and work together perfectly when you can find them: empathy and self esteem—a strong sense of self). Empathy: Top producers need to bond with others, to find something likable about every person. This is a wonderful trait to find in a salesperson. They just keep going at the client every which way, trying to find more and more ways to serve that client, to please that client. Empathy is a key trait and part of your interview process must be specifically designed to weed out their empathy.

Self esteem: Make no mistake; great sales results come from people with super strong self-esteem. Only a person with an extra dose of self-esteem barrels into a client eight times after the client has said no. People with weak self esteem go away after only a single rejection. People with weak self esteem fear rejection and so never actually close a sale.

Studies show that 48% of salespeople give up after only one rejection. Only 4% will try more than 4 times. Yet today, it takes 8.4 rejections to get a meeting. And what makes the difference between someone who will face that rejection one time and quit or 40 times and never quit, is purely personal (self esteem).

www.howtodoublesales.com has training programs that do that. But you can hire someone who, without you ever asking or training, is built that way. These people will have way more heart about getting that sale made.

Another aspect of a strong self esteem is personal ambition. Don’t you love it when you hire someone who innovates, expands upon and improves every single task you assign to them? This self esteem and need to please can make these people seem overly eager-to-please in a job interview. Maybe even come on too strong. Don’t let a little bravado put you off; it is the quintessential ingredient in every superstar.

In an interview, the person is the product, so they must present themselves with confidence, assure you that they are the one you’re looking for. This aggressive behavior will scare some employers, but it is exactly what you need in a salesperson.

Ground Rules for Hiring Superstars

First, age and background are not relevant. I’ve hired 24-year-olds who have out-sold 20-year veterans. One of my greatest finds came from a stereo store. Here was an awesome salesperson that might’ve never become the millionaire I helped him become had I not seen the traits he had. Another great find was a salesperson who tried to sell me a sweater in a clothing store. I snatched her right out of there and she ended up running three divisions of a company I ran. I recently found a 70-year-old man who has the best skills I have ever seen for getting top executives on the telephone. And he had been a line producer for feature films. So disregard age or background.

Second, you must design your ad to attract this rare animal. My ads begin like this:

SUPERSTARS ONLY:

Don’t even call unless you are an overachiever and can prove it.

The ad does not request a resume. The first thing we do is screen calls on the phone. Here’s a great way to test a top producer: Line up your candidates for a simple ten minute conversation. Tell them: “we talk to candidates for ten minutes to determine if we want to interview them.”

When screening calls, I always apologize for being gruff and to the point, explaining that I am overwhelmed with responses; then I say, “Tell me why you think you’re a superstar.” I then deliberately act unimpressed and slightly abrasive. If I intimidate them over the phone, I brush them off quickly. A top producer will not be intimidated. If they can’t talk their way into an interview what makes you think they’ll ever talk their way into a client. Save yourself a lot of trouble and get rid of those with weak self esteem right off the bat.

Too often you interview candidates as the nice person you are and it gives them the chance to be nice as well. Then you hire them and find out six months later that they can’t close a sale and shy away from the really big sales out of fear (weak self esteem). With the technique above, you find out early how well they handle rejection. It saves everyone a lot of time and YOU a lot of money.