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Objectivity is critical if you want to create your best-possible business strategy. By allowing innate biases to prevail, it’s a recipe for disaster.
Unfortunately, companies often fail to achieve goals after executing their strategy. That’s because managers fail to discard their biases and they consequently fail to clearly see their challenges and options.
To capitalize on opportunities for growth, companies must use the most-productive approaches in designing strategy.
It isn’t enough to eye financial opportunities.
Typically, businesses are astute in eyeing their financial and marketplace prospects.
However, they fail to experience the desired growth for a few operational reasons.
They don’t use due diligence in evaluating their assets and in designing the best-possible organizational structure, and in recruiting and retaining the right people to execute the strategy.
The approaches must include careful assessment of their opportunities via financial performance, marketplace opportunities, competitive advantages and in operations.
Businesses can achieve the desired growth by fully and objectively utilizing the four approaches:
Financial
In order to achieve returns high above the cost of capital, it isn’t sufficient to merely use mundane valuation methods.
Companies will fare better financially when they look at internal data and external data by leveraging the view of external data as an outsider would.
This means developing benchmarks that will help to surpass the financial performance of competitors – using marketplace data to understand what will happen without taking counter measures.
By knowing where they are and where they want to be, businesses can best discuss and determine how to achieve superior performance.
Marketplace
In today’s dynamic marketplace, businesses often suffer from slow growth in their core activities and pine for higher growth sectors.
However, the first thing that such companies really need to do is be defensive – in football parlance, protect their goal line – and take baby steps to create internal opportunities in a granular fashion.
Once that’s accomplished, companies can look to contiguous markets of opportunity, but also to capture market share to deny opportunities for latent competitors.
So, the analysis should cover two areas: Determine which existing segments of your business can probably grow and analyze which are the possible attractive contiguous markets to pursue.
Competitive advantages
To maximize competitive advantages, businesses should be taking into account their assets and competencies, as well as any additional requirements for investment to achieve success against rivals.
This means evaluating whether they have the firepower to win and determine whether anything else will be needed.
If indeed more assets are needed, it’s vital to determine what advantages will be obtained and whether the newly found advantages will be sufficient for winning.
To successfully complete such analyses, management must query employees, customers and vendors for their insights. In this way, valuable information is obtained for a competitive advantage.
Operations
One salient mistake that companies make is in assuming the status quo in operations will be sufficient to achieve the goals.
To lay a foundation for success, it’s critical to assess your organizational structure, employees, processes and technology.
Then, take salient steps and make the needed improvements.
From the Coach’s Corner, here are related sources of information:
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10 Execution Values to Guarantee Your Strategic Plan Works — Many companies devote resources to devise a great strategic plan. But they fail in their objectives because they don’t link their strategy to execution. So here’s how.
For Profits, Align Your HR Program with Your Business Strategy — For profits, a successful human-resources management strategy should complement your overall business strategy. Here’s how.
Build a Strong Sales Foundation by Being Defense-Minded — Sports is a great lesson for sales growth — build a strong foundation by being defensive-minded. Protect your turf first. Here are five tips for sales domination in your hometown.
6 Strategies if You’re Losing Market Share to Small Rivals — Here’s a scenario that can happen to any successful business – smaller competitors grabbing your marketing share. Here’s what you can do.
“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”
-Jack Welch
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