When you hear the words “business strategy” a set of assumptions probably come to mind. You’ll most likely imagine a meeting in a big corporate building, with a bunch of senior executives brainstorming in a large, opulent boardroom. They spend a few days holed up in their meeting room, and when they emerge they’ve got a long typed document and a powerpoint presentation that gets presented at stratco meetings, emailed to all the staff and then largely forgotten.
But the reality is that business strategy is not only for the biggest of all companies, it doesn’t necessarily take a large group of people to compile, and it shouldn’t be a once-off occasion.
There are several myths about business strategy that are either stopping companies from doing it, or stopping them from strategizing effectively. Here are some of the misbeliefs and the reasons you shouldn’t give them credence.
1. Business strategy is only for large corporates.
Saying that business strategy is only necessary for large companies is like saying that only people from Durban need to use roadmaps. It simply makes no sense. Any company — from a two-person startup to a multi-national corporation – needs an idea of where it is going. It needs a clear picture of what it is, the products it provides and who it provides them to. A lack of direction will mean that decisions are not made in line with a single line of outcomes in mind. Everyone needs business strategy.
2. The past predicts the future.
Often business strategy is informed by a historical outlook. When mapping out the future, the past is often the first place that strategists will look.
Admittedly, there are only so many methods that one can use to predict the future, and the past is the obvious place to start. Nevertheless, the rate at which change takes place in today’s environment means that looking at what happened before is becoming a less and less reliable measure of what is to come. Instead, business strategy should combine historical data with current trends and the possible directions to which those trends point. Future prediction is imperfect at best, but shying away from a rigid dependence on the past will stand any strategist in good stead for their understanding of the future.
3. Business strategy should only be carried out by senior management.
Of course, top management should always be involved in the formulation of strategy – it is integral to their role within the company, and many top managers are hired precisely for their ability to envision a way forward for the company. However, only involving the input of your top management when formulating your business strategy is a mistake. Every business needs to know how plotting a certain path will affect the operations – the day to day decisions – of the company. And it is impossible to know this without getting the input of those who make the operational decisions. So, invite the input of middle managers, line managers and even general employees. You need a cross section of feedback, because you’ll need buy-in from all levels of the company when it comes to implementing your business strategy.
4. Business strategy will automatically be accepted if it is endorsed by top management.
Imagine you’re on a road trip in a car full of people. You’re taking a pre-determined route, when the driver of the car decides to take a detour. His reasoning is sound, he knows the road well, and he is the driver after all. Are all the passengers likely to instantly agree with his new path? Unlikely. There are others who know the road too, and feel there are flaws in his plan. They point out the possibility of road works and potholes and traffic jams. When their predictions are fulfilled, they gloat. Very few passengers will unquestioningly accept the new route and support the driver no matter what goes wrong.