8 steps to strategic growth

The eight steps

1. Define your vital few strategic objectives.
2. Create detailed program plans for each one.
3. Prioritise resource allocation to deliver those plans.
4. Establish clear, accountable plan ownership.
5. Stop less important priorities and redirect the resources to the vital few.
6. Ensure company-wide awareness of the objectives and the strategies.
7. Set and track progress against key performance indicators, and adapt as required.
8. Communicate motivational progress widely and regularly to all employees.

Why the vital few matter

Defining your top five strategic objectives establishes focus on them throughout the company, and focus is what makes them achievable. The more you focus, the more depth you can put into what you do, and that depth is what creates customer value and differentiation. Research by OnStrategy, formerly M3 Plans, cited here when this article was first published in 2019, found that businesses with strategic plans are 12% more profitable.

Clarity also stops you spreading the team too thin. If you take a marketing budget and spread it across many initiatives, the impact of each is superficial. Limit the spread, direct the funds at the priorities, and you can make a real impression with them.

Why choosing them is hard

Selecting five objectives and staying focused on them is difficult, because a business has many stakeholders who are each accountable for a product, a service, a market or a country. Every one of them needs to perform, and every one of them will ask for support and investment. Try to meet all of those needs and your investment in each is small, and so is the impact.

The obvious question follows: if an area is not important to the company, why not stop it, take the resource and point it at one of the vital few?

Sometimes that is exactly the right answer. Often it is genuinely hard. Customers may be global, competitors may offer a full portfolio and you may need to as well. Declining markets still contain customers who need to be served, and brand values that have to hold across everything you do.

Creating the bandwidth to focus

This is the paradox facing most growing businesses: how to sustain what you have always done while creating the capacity to deliver the objectives that decide your future. Businesses take different approaches to it:

• Splitting the company into old world and new world, allocating resources to each on competency. The old-world income often funds the new-world growth.
• Transferring non-strategic business to channel partners, where the fit frequently serves those customers better anyway.
• Selling a non-core line and redirecting the proceeds into the vital few.
• Standing up empowered, cross-functional teams alongside the current business, accountable for progress on the strategic objectives.

Ranking every initiative on a common basis, whether that is sales, net present value, profit or customer satisfaction, helps you judge relative importance and makes the decisions defensible rather than political.

Even then, stopping what a business has always done is easier to say than to do. The common failure is to keep doing yesterday’s work and tomorrow’s work with the same resources. That thins the focus, weakens every deliverable, and creates organisational stress. In time it produces declining results and no strategic progress at all.

Whatever route you take, the principle holds. If you do not focus on and seriously resource your new strategies, they will fail and the future you described will stay a description. Focus is also the fastest way to reduce marketing waste.

Plans, owners and measures

To hold that focus, put a program plan behind every one of your strategic objectives. Each plan contains the strategies that will achieve the objective and the actions that will achieve the strategies, and each has one fully accountable owner.

For every objective, set balanced-scorecard style performance targets and track progress against each indicator without exception. Adapt the strategies as the evidence arrives, and back the ones that are demonstrably working.

Tell everyone, including which markets

Make sure all your employees know the company’s vital few objectives and the target market segments. Without a common view, initiatives fragment: everything looks like a priority, limited resources spread thinly across too many things, and the key strategies are neither widely known nor likely to be achieved. If a business does not know where it is going, it is unlikely to arrive, because it does not know where there is.

Research by Metrus Group, cited here in 2019, found that only 14% of employees understand their organisation’s strategy, and that fewer than 10% of all organisations successfully execute the strategy. That is the gap this step closes, and it is why communication is a step in its own right rather than an afterthought.

Once the objectives are well known they do more than align the plan. Employees use them to make their own day-to-day decisions about what matters.

Include your primary and secondary target markets in that communication. Understanding those markets, and the commercial opportunity inside each, is what makes exploiting the opportunity possible. Depth of understanding is what allows a strategy to make a real difference to potential customers, particularly where the competition is strong. If you do not know where the opportunity is, you will not know in enough detail how to go and win it.

Take these eight steps and strategic growth stops being an ambition and starts being a plan with owners, measures and momentum.

Sources

• OnStrategy (formerly M3 Plans): research on the profitability of businesses with strategic plans, cited when this article was first published in 2019
• Metrus Group: research on employee understanding and organisational execution of strategy, cited in full in the original 2019 post