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Why Is Having a Business Strategy Important?
Let’s say you’re driving to a spot several hundred miles away without a map. Chances are you’re going to get lost along the way, make a few wrong turns, and possibly never reach your destination. A business strategy creates a roadmap to reach business goals and achieve desired outcomes, like a strong competitive position in the marketplace. Without a strategic plan, the chances of business success are slim.
From a small business to a large enterprise, a business strategy is something every company needs. Some common goals of strategic planning include:
- Business growth and profitability
- Build a strong customer base and strengthen customer loyalty
- Inform business decisions
- Become more innovative and introduce new products
Bob Iger’s 5 Tips for Developing a Business Strategy
Bob Iger had a clear vision for growing The Walt Disney Company. Using a competitive business strategy, he expanded the company’s media holdings, increased revenue streams, and has grown the company’s market share exponentially. Here are his five tips for developing a successful strategy.
1. Dream big. A critical first step when you’re honing the strategy of your company—whether it’s a startup in its gestation phase or an established business in need of refocusing—is to go buck wild. Seriously. When the time comes to brainstorm new directions in which you could grow, set aside space for a little no-holds-barred ideation sesh. For now, the sky’s the limit. Once you’ve explored the multiverse of possibilities, though, it’s time to reign yourself in. At this stage, you’ll want to develop a succinct list of priorities.
2. Define your priorities. You can only have three priorities. That’s what one of Bob’s friends, a marketing and political consultant, told him, and it proved to be a solid idea. Any more than three priorities and your pitch begins to sag. You vision for the company becomes muddled— to customers, to investors, to the board of your own company. For Bob, the three elements he decided to incorporate into his strategy for running Disney were:
- Invest most of Disney’s capital in high-quality branded content, i.e. creativity.
- Use technology to make more compelling content and to reach people in more innovative ways.
- Grow globally, deepening connection to markets around the world.
3. Sell your vision. Narrowing your priorities to three crystalline goals is half the battle. To sell your vision, you have to be able to articulate it efficiently to a wide variety of people. This will come naturally to some people and might require intensive practice on the part of others. No matter which camp you fall into, remember: This vision-setting phase isn’t about you and how smart you are. It’s about the people in the room—about you understanding their language and presenting your vision in terms most accessible to them.
4. Embody your vision. Stating your strategies isn’t a one-time thing. You have to become the living, breathing incarnation of your three strategies, and you must always be ready to explain how they apply to to problems of all sizes. Sharp communication skills are essential: The better you can communicate your strategies verbally and in plainspeak (which is to say, not via email using corporate lingo), the more efficiently and effectively they’ll be implemented. You don’t want to be this Great and Powerful Oz figure who hides behind a computer and urges their team to get pumped for synergistic approaches to workflow streamlining or whatever. You want to get in the room with your collaborators and tailor your vision to their actual workplace experience.
5. Get feedback. Another critical element of a good company strategy is feedback. Because, as much as you’re the captain of your own ship, a major part of your job is allowing those around you to own the vision. Requesting feedback both emboldens the people who work for you and also brings invaluable insight—you need that boots-on-the-ground perspective to keep your vision calibrated.
This is why Bob, on a weekly basis, sits down with his direct reports over lunch to seek feedback and advice. It’s a give-and-take session that, as he puts it, “emphasizes the need to not only be accessible ... but also to have the ability to be candid in the dialogue.” And this is where truth counts. You must, MUST, create a culture where honesty and candor are encouraged. The more POVs you’re able to tap into—especially when it comes to gauging where the market is headed and how your company should adapt to it—the better able you’ll be able to roll with the punches and thrive.
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