Why Does Good Strategy Matter to the Bottom Line?
Strategy is fundamental to the success and sustainability of all organizations. It is about seizing opportunities and knowing which not to pursue, all while mitigating risk. Develop a Marketing strategy that stands the best chance of delivering on your current and FUTURE performance, productivity, and profit targets. A good strategy is designed to drive long-term growth and profit. Creating a strategy requires understanding your company, industry, customers, and competition. Members of the C-Suite recognize the value of developing and executing on a strategy and market performance.
The business environment is fluid with technological, social, and political change occurring with increased frequency. Successful businesses realize that achieving growth while adapting to the rate of change and staying in tune with the market requires staying strategically nimble. There is no mistaking the growth mandate facing the C-Suite. The CMO Council and Deloitte study found that 70% of CEOs expect CMOs to lead this effort. Yet according the study, just 1 in 6 of the 200 participating CMOs reported spending a lot of their time teaming with leadership executives on global business and strategy. As a Marketing leader, if you’re not participating in the conversation about strategy, you’re not filling the requirements of your role.
Strategy: The Most Important Choice Your Business Will Ever Make
Entrepreneurial resource Gaebler suggests good business strategy should inspire company expansion and enable you to explore business opportunities outside of your standard business practice. Customer insights, competitive intelligence, market research, and a clear understanding of your ecosystem, are all important considerations in strategy development. Armed with insights from your research, experience and expertise in the market and with your customers, you can explore new ideas for your company that enable you to find, keep, and grow the value of your customers and maintain or increase your competitive advantage.
Your strategy is the backdrop against which you determine which opportunities to pursue – or just as importantly, which not to pursue; which operations to develop or streamline; and what skills your organization needs. Organizations develop strategies designed to protect and/or gain market share and to identify the opportunities that will yield the greatest return. Formulation of your strategy requires you to be acutely aware of, and prepared for, changing customer needs and potential shifts in your market.
For most organizations, resources are finite. Your strategy dictates what resources, offers/services, operations, and capabilities are needed. When well-formulated, your strategy is an engine for increased productivity. Without clarity of strategy, your team is at risk of aimlessly moving from one activity to another.
How to Bring Your Strategy to Life
A common output of your strategy is a strategic plan. The strategic plan calls out the initiatives that connect action to vision. The strategic plan outlines how these initiatives will achieve the strategy and specifies how desired results are expected to be achieved. The strategic initiatives serves as the basis for your organizations business outcomes.
The plan clarifies the vision and increases the alignment across the organization. It serves as the reference point for decision making and the foundation for each of your functions’ outcome-based measurable plan. It is our belief that a strategic plan is one of the most valuable efforts and assets for every organization. Your strategic plan focuses on your future. It is about what you will proactively do to create, deploy and measure your success.
At a minimum your strategic plan should include these 10 elements:
- Your vision of the future. This section describes the future state you are creating.
- The mission of your business. Think of this as an elevator pitch. What is your value proposition and for whom. Be as clear as you can. Provide a succinct clear overview of your business.
- Industry Analysis. An overview of the industry, the players – your competitors, the current and potential growth, and the growth areas, and the overall size of the market.
- Your Target Market. Identify the segments, the potential number of buyers, their characteristics, why they buy, who they buy from, and what problem they are trying to solve.
- Competitive Analysis: This section provides a view into your competitors, what do they sell, how do they sell, why they win and why they lose, and a summary of their strengths and weaknesses.
- Your SWOT (aka strengths, weaknesses, opportunities, and threats). The previous sections provide insight for this section.
- Your goals and how success will be measured. This is when it is important to understand your Key Performance Indicators (KPIs).
- Functional Plans: This section should identify the objectives that need to be achieved to support the strategy by each functional area (Marketing, Sales, Operations, R&D, Customer Success/Support, etc.) This earmarks measures of success for each funciton.
- Resource Requirement: What resources including people and infrastructure (technology, facilities) and other capabilities are needed to achieve the strategy.
- Financial Projections: What are the financial rewards (profit, revenue, etc. ) if the strategy is achieved and in what time frame. You may need different financial models if you are considering various strategic alternatives.
Once you complete all of these, create an executive summary, secure agreement, and communicate the plan to the team.
The Roadmap to the Best Strategic Plan
In the mid-1990’s, Arthur Andersen conducted a survey which found that companies with a written strategic plan had 63% higher revenue growth and 100% more profit than those companies without a plan. A more current study by The Alternative Board (TAB) reported that three-quarters of the businesses surveyed believe that a written strategic plan causes their business to perform at a higher level. Ready to start planning? Check out our two-day interactive session Planning for Profitability workshop to develop your strategic plan.
- How Do You Know when It’s Time to Bring in a Marketing Expert - February 12, 2020
- The Marketing Plan as Navigation and Communication Tool - December 23, 2019
- Why Does Good Strategy Matter to the Bottom Line? - October 22, 2019