When I was at university I consistently came across the concept of strategy. At the time, being young and in a hurry, I thought it was a bloated word, an unnecessary word. Strategy, I thought, meant talk instead of action. You do not need a strategy; you just need to get on with it. It turns out I was wrong, horribly wrong – you need a strategy for everything. Want a career, you need a strategy for that. Want to start a business, you need a strategy for that. A well-defined strategy will act as a roadmap linking together seemingly unrelated discreet-events to help fulfil a broader purpose. Without a strategy you are working aimlessly, hoping that one event will lead to another.
Now that I work as a consultant I see the importance of developing a strategy on a daily basis. Clients that have one reap the benefits, those that don’t are quickly found out. The biggest strategic error that companies make is failing to follow the business timeline through to an end point. I have lost count of the amount of times I have sat across boardroom tables asking business owners for their objectives and being met with a set of figures – ‘we want to be turning over £30m by 2019’. ‘Ok, why?’ The only answer seems to be that £30m is more than £20m and more must be better, right? Maybe, maybe not. Maybe growing to £30m will put unnecessary stress on the talent pool you recruit from, driving up wages and reducing profits. Maybe £30m sits you in an uncomfortable position, making you bigger than your current competitors but nowhere near the next set.
We are living in chaotic times, so for this light blog I will assume that a lack of strategy has delivered unplanned success (rather than unwelcome failure). You start a business (congratulations), the business goes well so you employ a few more people. Now at drinks parties you can speak ‘as an employer’. You delegate, you step away from the daily grind and elevate yourself to the C-suite (what a terrible term that is), you have made it. After a couple of months, you realise that you have not got your hands dirty for a while (literally or metaphorically) and this saddens you. You didn’t get into business X because you wanted to sit at your computer looking at balance sheets. You sit back in your executive chair one rainy Tuesday afternoon and ask yourself how it has come to this. You have a successful business but you are sad. You are not doing the work you enjoy, you want out. A fresh challenge, back to the good old days. Time to sell up.
‘What is your turnover?’ asks the interested party. ‘£30 million’ you reply – your chest swelling with pride. ‘Too big for us, we are looking in the £18m-£25m bracket’. You get the same answer again and again. Oops.
Ok, this might be a nice problem to have, but it is still a problem and one that could have been avoided with the development of a strategy early on. More is not always better (Mr Trump) and ‘more’ is not a strategy.