Business Foundations

Building Your Business Vision

March 31, 2021 by Sarah Lakhani Leave a Comment

Building your business vision is the best investment you can make right now. Knowing where you want to go with your business will help shape everything else that follows.

It will provide clarity that will shape your mission, your values, your brand strategy, your business strategy, your customer strategy and customer experience, your sales and your marketing strategies, your product and service development… quite literally everything in your business.

So perhaps you’ve come across the VMV acronym before – Vision, Mission and Values. And it’s quite likely that you’ve been told how important it is to build your business vision. But the value is in whether you’ve actually done it.

Let’s take a little bit of time out today to identify the ways that your vision affects your business – positively, if done right, negatively, if not done at all (or done in a less-than-desired way).

First things first…

What is a business vision?

Your business vision is your North Star. It is the final destination you want to eventually get to. It is the reason you created your business, the deep reason – your why.

And it is this deep reason or “why” that gives you fulfillment.

Most business visions are so aspirational that they might never be achieved, and that’s ok. It’s good to be aspirational. But your vision doesn’t have to be so aspirational that you’ll forever be striving to achieve it. It can be something more achievable. But it is important that your vision be something that inspires you.

Here are some examples of how you can shape your vision statement:

To eradicate [something you work towards getting rid of, e.g. hunger]
To increase / create more [something that you work towards increasing, e.g. female CEOs or founders]
To be the best at [whatever it is you do/provide/create/produce/make available]
To bring [something] to [type of location / people]

Why is a vision so important?

Your vision is the guiding light, the destination, the ultimate goal of your business.

Without a vision, the biggest issue you’ll almost certainly face is that your efforts won’t be aligned. What does that mean? It means you’ll be doing things that move you in some direction, but not necessarily towards where you want to be. And different things will move you in different directions, so your cumulative efforts will be scattered, not stacked. Why is that an issue? Other than not getting closer to your goal, unaligned action means you’ll be busy all the time, but you won’t see the desired outcome from your effort. That in turn can – and most likely will – lead to becoming unmotivated and burnt out.

How does articulating a vision help?

It helps you identify your mission. Once you have a business vision in mind – the destination, the ultimate goal of your business – you can identify your mission. Your mission is the “how” to your vision. If your vision is to help 1,000,000 women start their own businesses, then the “how” describes what your business will be doing to achieve that vision. Perhaps it’s by having a membership-based community that supports and provides frameworks, information and guidance to women starting their businesses.
It helps frame your brand strategy… and your business strategy… and your sales strategy… and your marketing strategy… and your product or service development… and your customer strategy… you get the point. The reason why it has such an impact on everything that follows is because your vision describes your destination. And all the other strategies that you build into your business (like your brand strategy, your business strategy etc) are designed in such a way to get you to that destination, to that vision. [Little side note here: Do you see how not having a vision can result in each of these critically important strategies then veering off their own path? Without a common destination in mind, you could end up creating a brand strategy that takes you one way, and a marketing strategy that takes you another way, and a business strategy that doesn’t align with either.]
It reduces anxiety, stress, burnout, and all the other feelings associated with overworking and not seeing the results you want to see. Why? Because your actions will be aligned. Because your strategies will be aligned. Because your efforts will be created in such a way that they drive you towards your vision. And on that note…
It creates fulfillment. Because seeing how you’re making a positive impact on the thing that drives you is fulfilling. And…
Seeing your ultimate goal get positively impacted through your actions is the thing that will keep you going through the tough times. Because there will be tough times; there always are. But knowing what you’re working towards and seeing how you can and do make a difference is a big motivator. It’s the biggest motivator, in fact.

So, Sarah – what’s your vision?

I was hoping you’d ask!

There is a reason I work with entrepreneurs. I want to help build more heart-based and values-based businesses. I want to see more entrepreneurs and small businesses succeed. I want to create that movement, that ripple effect.

Also, I find that entrepreneurs and small businesses deliver their products and services with heart, with a lot of care, with genuine appreciation for their customers. I want to create more of that.

And lastly, I want to give back and help others give back to non-profit businesses. And I find that a lot of entrepreneurs and small businesses do that. And they do it, again, from the heart.

So, having introduced my background thoughts, this is my vision:

My vision is to create a world where people are successful doing the things they love, delivering from their hearts and making the world a better place.

And now it’s your turn

If you don’t already have a vision, create one. Dig deep. Find out why you do the thing you do in your business.

And ask yourself: what impact do I want to have on the world?

Business Strategy and Strategic Positioning Models Made Easy

February 17, 2021 by Sarah Lakhani Leave a Comment

When it comes to creating your business strategy, your strategic positioning is (almost) everything. And so, it’s helpful to have a framework or some examples that you can use to spark your creativity and ideas around what your strategic positioning should be.

As mentioned in the “What is Strategy” article, strategy is based on competitive advantage and strategic positioning. (If you haven’t read “What is Strategy”, I recommend reading it first, then coming back to this article.) What this means is that when designing your business strategy, these are core areas around which to build it.

Without uncovering what your strategic position is going to be, you will find it difficult to gain a competitive advantage. And without a competitive advantage, competing and finding success in business will always be a struggle.

So in this article, I’d like to talk about the three types of strategic positions. Knowing what they are will help you see how you can position your business. Deciding which one you want to use to position your business will make a huge difference to everything that follows, so keep reading to uncover the three types of strategy positions and an example at the end in which I run an example through them all to demonstrate the differences.

You see, business strategy is basically the head of your business. And all your sales, marketing, operations, financial management, culture, decision-making and more are all defined based on what your business strategy is. And that is why it’s so important to be absolutely clear on what your strategy is. If you’re not 100% clear, then what ensues is a brand that isn’t in line with the business offer, or sales and marketing strategies that don’t reach the right audiences or don’t have the necessary messaging, business operations that don’t support the overall objective of the business, and plenty more misalignment and gaps across the business.

And the most important part of your business strategy is your strategic positioning.

Sometimes it helps to get some business strategy examples around what types of business strategies or models exist, so you can get those creative juices flowing. So let’s dive in.

As I mentioned at the start of this article, there are 3 types of strategic positioning models:

A business that provides a niche product/service to a large customer base
A business that provides a broad product/service to a specific target audience
A business that provides a broad product/service to an underserved market or audience

These can be used as standalone models, or combined to form a hybrid. Let’s look at each one of these in more detail, and then I’ll run an example through all three strategic positioning models to demonstrate the differences between them.

Business Strategy #1: Providing a niche product/service to a large customer base

In this type of strategy model, your focus is your niche product/service.

Your Ideal Customer Avatar is likely to be defined by a need or a life stage or an experience. This is in contrast to ICAs that are defined as personas or detailed descriptions of specific types of people.

In this type of business strategy model, you’re looking to differentiate yourself via your product. You might offer the highest quality product/service of that type, or be the business that provides the most value to your customers, or you could be the one with the best customer experience. These are just some examples of differentiation within this type of business strategy.

Business Strategy #2: Providing a broad product/service to a specific target audience

In this type of strategy model, your focus is on the audience you serve. Your business is built around this specific type of customer. You create a product or service with that customer in mind.

Your Ideal Customer Avatar in this instance would be based on the audience. You will craft the ICA around the similarities of that specific audience.

In this type of business strategy, you’re differentiating your business from others in your industry by targeting a very specific type of customer. Your products will be created with that customer in mind. What that means is that if your ideal customer avatar doesn’t need a feature or a service, you won’t include it in your offer.

Business Strategy #3: Providing a broad product/service to an underserved market or audience

In this type of strategy model, your focus is on finding those underserved markets or audiences, and providing them with products or services that are otherwise unavailable to them.

Your Ideal Customer Avatar in this instance would be based on the criteria that makes them underserved. For example, if your ICA is market-specific, your business might be bringing a product or service to small towns or villages or even entire countries where they are not available. If your ICA is audience-specific, your business might be making a product or service available to a specific demographic or socioeconomic group that currently doesn’t have access to that type of product or service.

In this type of business strategy, you’re differentiating your business by being the first and only – whether you’re the only provider in a specific market or region, or the only business to create a product or service for a specific type of market.

Now you might be thinking – this sounds a lot like the previous strategic position. And yes, it does sound the same, but here’s the difference: For this type of positioning, you will need to understand why no one else has ventured into the space before you, and develop a business model that overcomes those challenges. If your business idea is to bring an exercise class to Kenya, then you need to understand why this hasn’t been done before and how you can make exercise classes work as a business in that market. There are barriers that will have made this particular business idea unappealing to others before you. So find out what they are and see if you have ideas to overcome them. The thing is, if you are able to overcome them, you may very well have started the journey along a solid business strategy.

Examples of the Business Strategy and Positioning Models

To demonstrate the differences between the three business strategy models, I’ve created an example business below and I’ve run it through all three business models so you can see how the business strategy changes.

The example business: Let’s say you have a real estate business. The main objective of your business is to help people find homes to buy or rent.

Now let’s run your business through each of the three types of strategic positions and see how it changes the business.

A niche product/service to a large customer base

If you were to transform your business to this type of strategic position, you would start by choosing a subset of the real estate market that you can do better than everyone else. For example, you could have a real estate business that specializes in selling homes that were distress sales.

This type of business strategy would work best for you and your business if you were able to support it with the business infrastructure required to make this niche product or service as efficient and effective as possible. What would you be doing around distress sales that a real estate agency that has a wider portfolio wouldn’t be able to do, because they wouldn’t be able to spend as much time on this niche product as you can?

As you can see, your business is differentiated based on a niche product or service which has a broad customer base – people looking to buy homes. You are competitive because you are able to deliver more value across that niche product/service than a competitor who has a wider range of products and therefore isn’t able to enhance their offer around this niche.

A broad product/service to a specific target audience

If you were to transform the business to this type of strategic position, then we’d change the product/service up to match. Let’s say the specific target audience we’re looking to serve are “first-time buyers” (note that this could have been anything – “high wealth”, “low income”, “expats”, etc).

When you hone in on the target audience, you’ll realize that your product/service offering will have to change to match their needs. In fact, you’ll find that your product/service offering will become wider, not narrower. A first-time buyer will most likely be looking for a low-mid range home and possibly a smaller one (1-2 bedrooms). By doing some research, you may find more information such as areas that first-time buyers are more (or less) interested in. Or perhaps you’ll find that first-time buyers tend to be within a certain age group. Since you’ve narrowed down the audience to “buyer”, you know that your business doesn’t need to have any rentals available.

And lastly, because you’re looking to serve a specific target audience, you’re now able to add some services that would be valuable to them, such as a financial advisor session if they would like help with budgeting or mortgaging. You could also have other services that they might be interested in that would make the purchase journey easier. If you are able to, you could partner up with furniture stores to offer discounts. You could reach out to contractors and also partner with them to provide your customers with options for making changes to their new homes at preferential rates. As you learn more about your Ideal Customer, these additional products/services will come to you.

A business that provides a broad product/service to an underserved market or audience

Now let’s move onto the third strategy model. In this strategy, you’re looking at serving an underserved market or audience. So perhaps you choose to build your model around providing real estate services to low-income families.

Again, you’ll find that it makes business sense to adjust your products and services in line with the needs of your target audience. You may reduce your service prices, knowing that you’ll capture a larger share of the market. You might choose to increase revenue streams by offering end-to-end services, just as in the example above. But the real differentiating factor will arise out of understanding what makes working with your underserved audience different to working with the general market. Once you understand their needs (and what they don’t need), you’ll design your business around that.

Why it’s important to build your strategy from the start

Having gone through the examples above, I hope that you’re able to see that your strategic position has an impact on everything else in your business – from who your customers will be to what products and services you’ll sell to how your business will operate and more. It is a worthwhile investment to take some time to consider your position before you begin building your business. And if you’re already in business and struggling, now is as good a time as any to revisit your business strategy and strategic position and really carve out something unique.

What is a Business Plan?

February 10, 2021 by Sarah Lakhani Leave a Comment

You’ve got your business idea. It might even already be an up and running business. But you’ve reached a point where you realize one of the following:

You (and your team) are spending time on so many things. In fact, you’re very busy. But you’re not really getting any closer to where you want to be…
Your business doesn’t seem to have direction. Or actually, your business has a new direction every day! It’s getting confusing, frustrating and very tiring for yourself and your team.
You just don’t know where to start. You know where you want to be, and you can articulate that well, and paint that future picture in such a way that everyone you speak to gets excited about it, too. But how do you get there?

If any of the above scenarios resonate with you, then there’s one thing you need: a business plan.

And by the time you get to the end of this article, you’ll understand exactly what a business plan is, and hopefully be one step closer to creating one!

Key takeaways

Everyone needs a business plan.

A business plan is a document that outlines what your business will produce or deliver, and how it will do it.

You can also develop a second, more detailed, part to your business plan which provides you with an action plan outlining all the steps you need to take to get you from where you are today to where you want to be.

Most entrepreneurs struggle with getting their businesses set up successfully because:

They haven’t thought through all the strategic elements of their business, so their business idea may not necessarily be competitive, or even something that customers need (and will purchase).
There is so much to do that they get overwhelmed and do nothing.
They start working on and spending time on things that aren’t necessarily going to get them to where they want to be. This is when people are busy but not smart about what they’re busy doing. It happens a lot, and it’s discouraging, to say the least, when you’ve spent your days working, working, and working some more, but your goals are still so far away.

This is why spending time up-front to think through your idea and create a business plan will go a long way in ensuring your success!

What is a business plan?

Business Plan Definition: A business plan is a document that outlines what your business will produce or deliver (also known as what “value” it will provide), and how it will fulfill that goal.

I like to think of business plans as two parts. You will always need the first part, whether for yourself or for pitching to investors or potential business partners. But the second part is what proves to be extremely useful when you’re feeling either stuck or overwhelmed – i.e., when you just don’t know where to start, or when you’re so busy but not getting anywhere.

The basics of what a business plan is:

You will always need to make sure that your business plan clarifies your thinking, outlines your medium-high level plans for your business, and, if needed, can be used if you’re looking for investors or partners. I’ve outlined what needs to be included in a business plan below.

The extra part in a business plan that really helps you towards making your dream a success:

I’ve found that a business plan which also goes into detail with all the little steps – the action items – that you will need to accomplish to get to your end goal is something that almost ALL entrepreneurs need. It gives you clarity on what you should be working on, how you’re actually going to make things happen, and provides you with a clear roadmap that you can cross items off (or add items to) as you go along. And we all know crossing items off a list gives you that much needed accomplishment boost every now and again, doesn’t it?

So to summarize, a business plan always covers the medium to high level plans for your business (i.e. what you want to accomplish, why it’s a great idea and how you’ll do it). But, if you’re like most people, you’ll want to take it a step further and break down the “how” into action items that you can use to make sure that everything you (and your team, if you have one) are working on is getting you closer to that goal you want to achieve.

What does a business plan include?

A business plan includes several important pieces of information, such as your business objective, your product/service description, a market analysis, a clear idea of who you’ll be targeting (your Ideal Customer Avatar) and your plans and KPIs (Key Performance Indicators) across some strategic pillars: Sales, Marketing, Product Development, Financials, People/Team, Operations. Lastly, your business plan should include an assessment of potential risks, and what you could do should any of them arise.

In short, your business plan should give someone reading it a really good idea of what you do (or want to do), why you think it would work, and how you’re going to make it all happen.

Now that we know what a business plan is and what it includes, let’s look at why you might need one.

Why do you need a business plan?

There are two reasons why you need a business plan.

The first reason is to help you get clarity on your business and your strategy. This will help you articulate what your business will deliver, why it’s a great business idea, what your position within the market will be, what your competitive advantage and USPs (Unique Selling Propositions) are, and how you will deliver that product or service across several areas such as Sales, Marketing, Product, Operations, Financial and People (your strategic pillars – which may be a little different from these, depending on your specific business needs).

A business plan is also absolutely needed if you’re planning to go to investors for funding or are looking for someone to partner up with. This is the one document investors or VCs will expect – across the board. So if you’re planning on getting funding, it’s time to start working on your business plan!

But, business plans are also needed to give you clarity. And when I say you, I mean you, specifically! So even if you’re planning on being a solopreneur, and you don’t need any funding, it’s always a really good idea to put a business plan together so that you can get really clear on your business proposition.

And that clarity will prove to be useful across so many of your business areas such as your sales strategies, marketing strategies and copy, business operations and setup, supplier and partner choices, and more. By going through the business planning process, you’ll get really clear on what your business will deliver, to whom, and why it’s a great idea.

By going through this process, you’ll uncover risks you might have missed, opportunities you hadn’t seen, and get visibility into exactly what you need to do to achieve your goal.

And lastly, when you take your business plan a step further and create a detailed action plan out of it, you will be mapping out all the action items that need to be done to get you from today to your end goal. You’ll be able to view which action items are a priority, which ones are dependent on other action items, and which activities you spend time on today that don’t contribute to your goal at all.

How to write a business plan

It may seem complex at first, but trust me on this – a good template and thoughtful prompts, probing questions and experienced guidance will make it easier. If you’re anything like me, you’ll even find it fun!

Action: Write your business plan

If you haven’t yet written a business plan and would like the clarity that it brings, there’s no time like the present to get started! My suggestion is to create the outline first, then start filling the sections in with the information you already know. You can then research, think, decide and refine as needed. Good luck!

If this topic is something that interests you, you’re going to want to sign up to my free Strategy & Business Planning webinar. It’s going to be a live webinar in which I’ll explain the differences between strategy and business planning and take you through both. This webinar will equip you with the foundation you need to set your business up for success so you definitely don’t want to miss it.

Make Your Strategy Actionable

January 19, 2021 by Sarah Lakhani Leave a Comment

When I worked in a corporate environment, there were two categories of people when it came to strategy – those that were eager to define their strategy, draw up a strategic plan and follow through on it, and those who saw strategy and strategic plans as a “paper exercise”. The latter felt that working on strategy was a waste of time, mostly because it would take a significant amount of resources (people and time) to put together, and then not much would come out of it in the end. It wouldn’t be an actionable strategy. People would go back to doing what they used to do, and at most there might be a couple of new things implemented. But for the most part, nothing would really change.

Now that I’ve started my own business and I get to work with entrepreneurs and small business owners, I see, well, the same! And so I’ve been really interested in finding out why some strategy work just hasn’t made a positive impact on the people who requested it. Here’s what I’ve found. It’s really just ONE thing. Your strategy has to be implementable. Otherwise, it really will be a waste of time and effort and won’t change anything in your business. And, most importantly, after deciding on your strategy, you absolutely should put together a strategic plan that has an outcome that is actionable – something that you can pick up and easily start working towards implementing. This is so key.

So how, then, does something as “theoretical” (as one creative entrepreneur called it) as a strategy become something that you can see and touch and action?

The key is to break the strategic plan down into smaller and smaller items, until you have a strategic plan of bite-sized chunks. But I’m getting ahead of myself here. Let’s start at the top.

Step 1 – Decide on your strategy

If you haven’t read “What is Strategy”, do that first (it’ll open in a new tab) and then come back here. The first thing you need to do is decide what makes you different, and use that as the anchor in crafting out your vision, mission and values, your long-term goals, how you’ll compete and who your competitors are, and of course, who your customers are. Those are the basics.

Step 2 – Group your strategy into pillars

Now that you know where you want to go, and you can explain who you are and why you’re different, you can start building some strategic pillars. This is a typical list that you can apply across any business:

Sales
Marketing
Products/Services
Financials
People
Operations

Under each of these pillars, begin writing down some action items – things you need to do to get to the goals you set out in Step 1.

For example, let’s say you run a small Digital Marketing agency. One of your goals might be to make $500,000 in revenue across all your products and services. You currently offer two things – project-based digital marketing services and an online digital marketing course. You split your revenue across the two and decide your targets will be 80% ($400,000) from project-based digital marketing services and 20% ($100,000) from the online digital marketing course.

You decide to use the pillars suggested above (Sales, Marketing, Products/Services, Financials, People and Operations). Under Sales, you set a few goals:

50% of project-based services to come from small/medium businesses
50% of project-based services to come from large corporations
75% of online digital marketing course to come from large corporations

You’re doing well. This is a great start. You’ll do the same for all your pillars, breaking down each one into no more than 10-12 goals. Now let’s move on to step 3.

Step 3 – Break each goal within each pillar into bite-sized actions

This is the part that really makes a difference. When working on your strategic plan, you need to get to, well, a plan! I like to create pages for each of the pillars, and then break those pillars down into the goals, which I then break down into action items. Let’s continue the example above to see what this would look like.

Using the first goal under Sales, “50% of project-based services to come from small/medium businesses”, you can break this down into industries, or even specific businesses you’d like to target. Let’s do the latter. When you make this list, bear in mind that not every one will end up generating revenue, so you’ve got to make a big enough list to hit your target.

Organization: F&B Business #1
Organization: Health, Beauty & Fitness Business #2
Organization: Travel and Lodging Business #3
Organization: F&B Business #2
Organization: F&B Business #3

Now that you have an idea of exactly who you’d like to target to reach your goal for small/medium businesses, we’ll begin to break this down into actionable steps. Let’s do this for the first business on the list – “Organization: F&B Business #1”.

Follow on instagram
Comment & like posts at least 2x week
Collate ideas of how F&B Business #1 can benefit from digital marketing services
Reach out to Sarah who used to work at F&B Business #1 and ask if she can arrange an introduction
Meet with representative of F&B Business #1 and demonstrate how you can help increase their sales at a low cost
Follow up after the meeting

Your list can stop there for now, and you can add more action items if F&B Business #1 decides to sign you on.

The idea is to have a strategic plan that is broken down into action items that are easy to do and do not cause overwhelm – because we’ve all been in a position where there’s so much to do that we just don’t know where to start. This strategic plan makes it easy to know where you should be putting your effort and energy.

How your strategic plan positively impacts your strategy

You created your strategic plan by breaking down your strategy, so naturally you’d expect that the achievement of the action items in your strategic plan will lead to the achievement of your strategy – and you’re right, it should! A little caveat here that if all your leads turn you down, or you can’t get your product to work properly, etc., achievement of the strategy will be unlikely. But assuming you have a good product/service and that the outcomes of the action items are (mostly) positive, you’ll be able to easily complete the goals within the pillars, which will then lead to achievement of the long-term strategy.

Strategic Planning Action Time

If you haven’t spent time building your strategy and strategic plan, you should really consider taking some time out of your schedule, perhaps a couple of days, or a whole week, and working through it. By doing this, you’ll make sure that you and your team spend your time on activities that contribute to your strategic objectives, and essentially, that you don’t waste your time on activities that won’t get you to where you want to go.

What has your biggest challenge with creating an actionable strategy been? Have you had any great or bad experiences with this? Post your comments and any questions below, and if you can help anyone else out, don’t hesitate to do so! As always, if you’ve found this article useful, share it with someone who’ll benefit from it as well!

Business Planning 101: the SWOT Analysis

January 12, 2021 by Sarah Lakhani Leave a Comment

When it comes to planning your business activities over the next period, it’s not unusual to fall into one of two buckets – full of ideas and issues to solve… or completely blank.

Fortunately one simple tool can help you navigate this, regardless of which bucket you find yourself in – the SWOT.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The tool is simple but extremely helpful in both exploring and organizing information that can help or hinder your business. This information should then be used to leverage aspects of your business or build mitigation strategies to safeguard it.

Before we continue, let’s quickly define what each part of the SWOT refers to.

What is a SWOT?

Strengths | Internal strengths of your business that provide it with an edge over competitors

Weaknesses | Internal weaknesses of your business that could put it at a disadvantage either now or in the future

Opportunities | External opportunities that your business can leverage

Threats | External threats that your business should be prepared to handle

Generally, you’ll find that the Strengths and Weaknesses are focused on internal elements of your business. Examples of this are: Brand & Marketing, Internal Processes, Company Culture, Unique Selling Proposition, Competitive Advantage, Skills and Resources, Supply Chain Advantages, Partnerships

On the other hand, Opportunities and Threats are focused on the external elements within which your business is situated or operates. These could be: Economic Climate, Industry Trends, Market Size, Consumer Behavior, Disruptors, Government Regulations

Why you should conduct a SWOT analysis

A SWOT analysis is used to collect and organize information on your current and future business landscape – both internal and external. Very often, you’ll get caught up in the day to day. Running a business is not easy! But you need to stop and take a look at the big picture – both within your business and outside of it – in order to identify elements of your business or your business environment that you can leverage or minimize risk against.

It’s important to note that a SWOT is a tool to help you gather information and put it down in a structured format. It does not automatically pop out a plan of action to mitigate risks or act on opportunities. To do that, you’ll need to build an action plan after completing the SWOT.

Best practices for a great SWOT analysis

To make it easier, more engaging and definitely more actionable, I like to ensure my SWOT has been explored from all angles and that the points in it are relevant and informative and very importantly, not generic. You shouldn’t be able to apply the same SWOT to another business or brand. For it to be useful, it really needs to be specific to your business.

So the trick is – the value of the SWOT is in the questions you ask and how deep you go into the research and findings.

For example, you might have “great team” as a strength. Or you can make that more informative by saying “team members continuously and naturally grow by cross-skilling each other as they work collaboratively with one another on projects”.

A weakness could be “lack of resources”, or it could be more useful with details such as “there is no customer data analytics role and an overall lack of customer data analytics skills across the team”.

An opportunity could be “expand to Market B” or it could be “develop customer acquisition strategies in Market B”.

Lastly, a threat could be “COVID-19”, or it could be “due to COVID-19, my typical customers are less likely to spend money on this product”.

As you can (hopefully) see, the suggestions for each of the examples above almost gives away an actionable activity that your business can focus on either growing or mitigating.

When should you use a SWOT?

A SWOT analysis can be done whenever you want to plan activities to drive the success of your business. This could be done annually or even every 6 months.

A SWOT is one of the first steps carried out in strategy planning – which can be done once every few years, or as a one-off when a major change occurs. During times of disruption, SWOTs are helpful in framing your business within the environment and identifying opportunities to help your business survive or even thrive!

Action: Conduct a SWOT analysis

Below are some questions to get you started on your SWOT. You can use this downloadable SWOT Questions and Template to write down your answers.

Strengths
What are you most known for?
What do you do or deliver that delights your customers?
What do your employees love about working in your company?
What do you do better than all your competitors?
What internal advantage do you have that none of your competitors have?
How have you been able to build up your customer base/following?

Weaknesses
What are you unable to do well?
What required skills are not available within your workforce?
What do your competitors do better than you?
What are your customers’ most common complaints?
What processes are not standardized (and therefore variable, in effectiveness and efficiency)?
What areas of the business could be more efficient with automation?

Opportunities
What are your competitors leveraging that are also available to you?
What government or business-support resources are available to you?
What are the current trends in your industry?
What changes are happening in your market(s)?
What products could you be offering that you’re not currently offering?
How can you get a larger share of the customer pool?

Threats
What is happening in the market that could cause customers to buy less from you?
Are there any disruptors that you need to be planning to mitigate risk against?
Are your competitors gaining market share, and if so, how?
Is your data secure or is there a risk of a data breach incident?
Is your supply chain secure?
Is your target audience diminishing?

A final word on SWOTs

SWOT is a simple and easy tool to use and it’s available to everyone all the time. The difference between a good SWOT and a great SWOT is in the information you put into it. A great SWOT will make it so much easier to identify what activities to plan for in the upcoming period of time, what to look out for and where your opportunities lie. Take the challenge now and create the best SWOT you’ve ever created. You never know – you could identify some things that change the trajectory of your business!

Have you used a SWOT before? Are you considering using one now? What challenges do you have when using a SWOT? Post your comments and any questions below, and if you can help anyone else out with an answer, don’t hesitate to do so! As always, if you’ve found this article useful, share it with someone who’ll benefit from it as well!

Giving Your Strategy its Best Chance for Success

January 5, 2021 by Sarah Lakhani 1 Comment

Every now and again – whether because of competitors and competition, an external disruption, an internal change, the new year, or a vast number of other factors – a business will have to adjust its strategy. Undoubtedly, you’ve had to adjust strategy too, at some point over the course of your business. The big question is – did it work? Were you able to successfully implement your new business strategy? If you’ve been through a few strategic changes, perhaps you’ve noticed that some have worked out better than others. Why is that?

Strategy is not Enough

The truth is, you need more than just a strategy. You need to ensure that your organization is set up to be able to deliver against that strategy and to be able to achieve the objectives set out in the strategy. So let’s break that down. How do you assess and then, if needed, set your organization up to deliver against your new strategy?

There are several aspects of the organization that you’ll need to look at. I’ve broken them down below, and provided examples of what you should be looking for. If you find that your organization is not set up in a manner that supports the strategy, start making changes to create that alignment and support. Otherwise, there’s a good chance you’ll find a big gap between your expectations and the outcome.

These are the most important elements of your organization that will provide the support needed to bring your strategy to life.

#1 – Ensure the right people and skills are in place

Sometimes – actually a lot of the time – leaders tend to think that once a strategic plan has been put into place and communicated to the business, everyone will just start doing what they’re meant to be doing with the new strategy in mind. But the truth is, sometimes that new strategy requires people with different (new!) skills, and sometimes even entire teams. So before you build an expectation that your team will be able to achieve the strategic objectives you’ve set out, ask yourself:

What skills are needed for these objectives to be brought to life?
Does my team have these skills?
Do the people who have these skills also have the time to spend on the new activities, or is their time already taken up doing other activities that are also required?

#2 – Provide flexible principles for your team to use when managing new situations or decisions

We all know that you can’t plan for every possible situation or decision that each person in your business will need to make at some point. So instead of trying, it makes a lot more sense, both in terms of your time and in terms of your sanity, to create a set of principles that can guide people within your organization to make the right decisions. For example, if your business is built on great customer service, then making that a clear principle helps frontline staff know to put great customer service above all else when talking with customers. On the other hand, if low cost is what your business is built on, a frontline member of your team may have to make a different decision. Bear in mind, you can’t have it all. Know that there are trade-offs, embrace them, make them known to your team, and provide clear priorities for everyone to follow.

#3 – Take stock of your culture and make changes as needed

Your culture has to support your strategy. It’s an absolute necessity. Think about the activities you’re asking your organization to undertake, and determine the values, behaviors and leadership styles that are necessary for them to be successfully implemented. Are these in place right now, or is your organization currently set up in a completely different manner? For example, if you need your team to be developing more ideas, then you’ll have to create a culture where experimentation (and failure!) is supported – not just passively, but also actively, for example: Do people have the time to create and test new things? Or perhaps your new strategy requires people to work together, but your teams are still very silo’d, and don’t trust each other. Be diligent and ensure that your culture and your strategy align. Even the best strategy won’t amount to much with a culture that doesn’t align to it.

#4 – Make sure the technology and data that is needed for success is available

It is extremely important to make sure that the resources, particularly the technology and data, that a person (or team) needs in order to effectively do their job is available to them. Look through your strategic plan and make sure that you highlight activities that require different technology and data as compared to what is available today. How can you obtain these? In the absence of these, how can your team adjust their activities to still deliver value, albeit not the full value that your future state outlines?

#5 – Re-engineer your processes and activities so they reinforce, support and complement the new strategy

Revisit your processes and activities. These were designed with your old strategy in mind. They supported what your team used to deliver, in ways that made the most of their skills in line with the old strategy. Your old processes may have been perfectly fine for your previous strategy, but that doesn’t mean they’re the right way to do things for your new strategy. Now that you have a new direction that you’d like the business to go in, you’ll need to make sure your processes and your teams’ activities support it. Re-engineer old processes, end-to-end, to make sure that your teams’ time is spent on activities that deliver value, in the most efficient and effective way, for your new strategy.

#6 – Measure the right indicators

When you change your strategic priorities, you absolutely need to review the metrics you and your teams measure, and adjust them so that they continue to bring to light the important measures that you and your team will want to track your success against. Make sure, too, that your metrics don’t clash with one another. Asking a call center team to focus on delivering excellent customer service but then measuring them on reducing their call time isn’t going to produce great results. Go through your metrics, team by team, and make sure they are designed to be supportive of your new strategy.

#7 – Communicate the change at every level

Finally, communicate the change in strategy to the entire organization. You might not need to communicate everything to everyone – it depends on your team size and functions – but it is critically important for everyone to know that a change is taking place, and how they contribute to it. Everyone needs to know and be very clear on how their daily activities need to change in order for them to continue to be an active contributor to the business. Understanding the key principles behind the new strategy also helps people at every level know whether what they are doing is helping or hindering the implementation of the new direction.

Support your strategy with necessary changes

Don’t be scared to change your strategy. Work through the areas outlined above and put the right resources and elements in place. It may not have always gone to plan in the past, but you can give your strategy the best chance of success by setting it up with the support it needs to grow, live and thrive.

Are you working on a new strategy? Which of the elements above do you think could be the largest hurdle for your organization? Post your comments and any questions below, and if you can help anyone else, don’t hesitate to do so! As always, if you’ve found this article useful, share it with someone who’ll benefit from it as well!

What is Strategy

December 22, 2020 by Sarah Lakhani Leave a Comment

This article is largely inspired by the HBR article “What is Strategy” by the father of modern business strategy, Michael Eugene Porter.

Defining the word strategy is tricky. Most definitions are centered around articulating a goal and then creating a plan to achieve it.

But the problem with these definitions are that they allow for very poor strategies to be created. Some of these strategies won’t have any competitive advantage – something that Michel E. Porter puts a lot of emphasis on when defining strategy. I have found that Michael E. Porter’s way of looking at strategy is by far the most well-defined and differentiated way. And so, this is the way I have always looked at strategy.

Let’s start by saying what strategy is NOT, which is what Michael Porter does in this article, too. Strategy is not operational effectiveness. What does that mean? It basically means strategy is not doing things more efficiently and effectively. When that is what your strategy is based on, e.g. I’m going to produce a better and cheaper bike, then you set yourself up for a price war against your competitors. When one competitor with a similar product starts selling their product for less, other competitors will look for cost-reduction opportunities and bring their prices down. This is great for efficiency and probably for customer choice and accessibility too. But it’s not great for your bottom line.

Michel Porter defines strategy as “The creation of a unique and valuable position, involving a different set of activities.” In other words, strategy is the identification or creation of a strategic position, based on competitive advantage, which you then use to define your organization’s overall goals and how you will achieve them.

Strategic Positioning

In defining how you’ll achieve the goals, your strategic positioning carves out differentiation versus your competitors either through different activities or similar activities done in a different manner. The strategic positioning is created from one of three possible situations: variety-based positioning: serving a limited number of requirements across a wide range of customers, needs-based positioning: serving a wide range of requirements across a limited range of customers or access-based positioning: serving a wide range of requirements across a wide range of customers within a narrow market.

To explain differences in these strategic positions, let’s use hairdressing as an example.

Variety-based positioning: A salon that specializes in one thing within the hairdressing business, e.g. blow-dries (such as Dry Bar), or perhaps just coloring.

Needs-based positioning: A salon that specializes in non-toxic products across all its services, such as non-toxic hair dye, shampoos, conditioners, hair masks, hair extensions that don’t use glue or other toxic-material bonds, and nail varnish that is 7 or 14-free, meaning it is free of the 7 or 14 top toxic chemicals that normally exist in nail varnish.

Access-based positioning: A salon that specializes in providing services within low-income communities.

What You Won’t Do

As part of the strategy, it is important to also define what the business will not be doing. This is because with any strategy, there will be trade-offs. A poor strategy ignores this and tries to do everything. This rarely, if ever, works. The most obvious issue with this is when your employees or even your senior decision makers are at a decision point but can’t easily choose which way to go because the business strategy actually supports both – conflicting – options, such as a call center that is measured equally against sales made and providing the best customer service.

Activity Mapping

And lastly, we need to make sure that activities carried out within the business are all in support of the strategy. This is done through one of three possible ways, or a combination of the three: aligning activities to the strategy, e.g. low cost is the strategy, so all activities have to align to and support that; reinforcing activities, e.g. because low cost is the strategy, complimentary delivery is not offered; and optimizing effort, e.g. because low cost is the strategy, and complimentary delivery is not offered, a partnership with a delivery company is signed and offered to customers.

Strategy Examples

Using the examples above, I’ll demonstrate how the positioning then influences all aspects of the business strategy, which – as we said before – is defining the goal and how it will be achieved.

Variety-based positioning: This salon will emphasize the one service it offers, such as blow-dries. It will not offer other services. It will perfect the one service it offers. It will ensure that all activities drive the perfection of that one service, e.g. training for staff, products purchased, salon lay-out, booking processes etc. Activities align to and reinforce this strategy. Appointment slots are easier to manage because it is easier to predict how long each customer will need.

Needs-based positioning: This salon will offer a variety of services but they will all utilize non-toxic products. This salon will not consider or purchase any products that are not non-toxic. They will also not offer services for which non-toxic products cannot be found. Purchasing activities are focused on non-toxic products. Marketing is focused on targeting customers who choose not to use toxic products.

Access-based positioning: This salon will be physically located in areas where low-income families live. Services provided by the salon will be less expensive, and therefore the products used by the salon will have to fit the cost structure, i.e. be less expensive than other salons as well. Services provided by this salon will differ depending on the needs of its target customer. For example, extensions using expensive keratin bonds will not be a service that is provided by this particular salon.

Working on Your Strategy

Whether you’re defining a new strategy for a new business, or re-visiting your strategy for your existing business, don’t forget to identify your strategic positioning and your competitive advantage. Can you articulate what that is? Next, identify and review your high level activities and test them against your strategy. Do they support and reinforce the strategy, and each other? If you’re able to do all that, congratulations – you’re on your way to a solid strategy!

You can read the HBR article “What is Strategy” if you’d like to full version of Michael E. Porter’s definition of strategy, which lies in finding and flexing a competitive advantage.

What has your biggest challenge with developing your business strategy been? What will you be doing differently this time around? Post your comments and any questions below, and if you can help anyone else out, don’t hesitate to do so! As always, if you’ve found this article useful, share it with someone who’ll benefit from it too!