Strategy. Perhaps there's no other word in business that draws such a diverse set of definitions and emotions. Just what is strategy and how is it relevant to your business? And how does your strategy change as your business grows?
First, it's important to understand what business owners should not regularly change, regardless of the size and maturity of their business. All businesses need a long-term vision. How will you transform the industry? Will your new restaurant be the "McDonald's killer" or will you become a "Pillar of the local community"?
In addition to a vision, it's critical to set the rules of the game. Tom's of Maine uses no animal testing or animal ingredients in its products, dedicates 5% of employees' time to volunteer activities, and uses no artificial colors, flavors, fragrances, or preservatives. For Tom's, the "how" is a critical piece of its values.
Regardless of size, there's also a need to identify the markets where you'll compete and how you'll successfully win in the market. Corporations place a lot of emphasis on developing alignment among key stakeholders, clearly and concisely communicating the strategy and pressure-testing activities to ensure they are aligned with the overall strategy.
At emerging firms, buy-in and communication are still critical, but because the team is smaller and more focused, it's often less of a sticking point. Instead, the challenge becomes setting goals, executing against those goals and knowing when to re-evaluate, or pivot. The last piece is the hardest, because you need to re-set expectations and goals coming out of the pivot.
To know when to pivot, you need a solid feedback loop. For new products, do research and quickly get a prototype in the hands of a select set of customers. Seek feedback and listed to the customers rather than trying to force your original strategy. Listen, re-assess your customer demands and create another product that better meets the need. Don't rationalize and try to force your first idea. Focus on learning rather than making money when you're an emerging company or business unit and even once you're profitable, always keep learning, improvement, and flexibility as priorities.
It's easy to narrowly define your company, but the most successful companies, regardless of size, constantly reinvent themselves. IBM is a great example of a company that has transformed itself from a products-based company to a services company. As an entrepreneur, your strategy will certainly change if you're accurately capturing feedback from your customers. What are your customer's biggest needs? Which products are they gravitating toward? What features, offerings, or ideas are not worth pursuing?
As a small company, you have an advantage over large companies, because you can pivot quickly at a low cost. Your strategy will frequently change, and you should view this as a good thing. After all, it's not about how well you strategize at the onset that matters--it's about building a business you're passionate about.
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Avondale's Bradley Hoos contributed to this article.