First what does strategy mean? It is not a plan, it is not a list of steps to follow, instead it is series of ideas and a vision that one will follow to accomplish a particular objective. In other words think of a strategy like a blueprint for a house. The strtagey of building the house is the blueprint. It is a series of ideas written down to give you a guideline but the different steps you take is the execution and the plan of how you are going to make the blueprint real.
Once you undertsand what a strategy is then you need to understand the 5 key parts to every strtaegy.
- The Overall Goal – Most strategies are just a compilation of ideas and people wonder why they fail. You need to see the end have an idea how you want it to come out. Part of a good strategy is understanding what might happen and might not and building that into the strategy. You can only figure this out if you understand what the goal is.
- The cost: Time, Money People - This si the most common part of a strategy that is missing after the goal. Every good strategy will have a cost whether it be in time, money, people or all of the above. These are concerns that need to be addressed and figured itno the overall strategy.
- Resources needed - Understanding the cost is important but one also needs to know exactly what resources will be needed to figure out the costs. Most strategies have this identified which is good but one needs to understand how to use them effectively as well.
- Execution steps – How will you execute the strategy. While the strtaegy is not an execution plan, when one is putting together that strategy you need to put thought into how you will execute it so you can put a strong strategic plan together.
- Desired outcome and Undesired - You need the goal of what you want to accomplish but you also have to have an expectation of how things will happen. The example I use is you may want to grow your company by 20% and you put a strtagey in place to accomplish that. However, based on putting tgether the strategy, your desired expectation might be 30% if you execute properly. Your goal was only 20% but you feel it is likely to be 30%
- Ask yourself what do you want to accomplish? What will it look like? How will you feel if it comes the way you want it or doesn’t? - Ask yourself these questions and be honest about the answers. Too often when putting together a strategy people might ask these questions but they eithe don’t full answer the questions or are not honest with themselves about the answers.
- What do you need? Again this is a time to be honest. Putting together a SWOT analysis will help you dvelop your staretgy plan. This could be identifying your strengths, weaknesses, Opportunities and Theats and figuring out to best fit everything in.
- Finally and the most important question: What are the obstacles that will stand in the way? Here you need to look at a few things:
- Economic Conditions – will there be too much competition or not enough dollars to make it worth it. Can the economic conditions change mid way through and if so how do you need to react?
- People problems – will there be a time where you will need more employees or less? If you have to bring people in how will training slow you down and affect the overall strategy. On the contrary what if someone leaves how will the project sustain itself.
- Additional Resources or lack of resources - One example of this is production problems if you are relying on inventory to help you. When car companies went to Just in Time inventory it worked great for a whle. But when one of their vedors had a hiccup it affected everyone down the line and thus killed produciton. The solution was to still stay with the Just in Time inventory strategy but have a back-up strategy for a five day supply storage. This works and keeps the plants humming. SO what are your back up plans.
- Labor Issues – While you might have great labor relations with your employees if you are dependent on other suppliers to implement your strategy what is their relationship? DO you have contingencies due to a strike or a layoff from your suppliers. Companies in union dominated industries can face this problem regularly. For example the business traveler might be faced with a travel problem to see their customers if an airline goes on strike. Understanding your back up plans, knowing what the issues are and undertanding their back up plans then you can adjust your strategy. This might be a situaiton where you develop more video conferences and less travel or more local customers.
- Mother Nature – Probably the hardest obstacle to deal with as you never know when it happens. It might be a tornado, hurricane, earthquake, hail storm or flooding or even extrememe heat or cold. Laying out strtaegies to counter act these conditions.