Your strategic plans will only succeed if you can put them into action. After you’ve looked at your situation and considered the options, you should have an idea of the right strategy for your business. Now you need to document your strategy, break it down into smaller objectives and tasks, do those tasks, and monitor your progress. You’ll also need to manage the change in your business and bring your team along with you.
A strategy statement is how you record the strategy you’ve chosen and show how it leads to the outcome you want. It’s the starting point for turning your strategy into doable tasks. This is when it starts to become real.
Have you identified your strategy by looking outwards at your market, looking inwards at your business, and looking for opportunities to create your own space in the market? Grab your notes in your strategy planning worksheet, and use this page as a guide to documenting your strategy and putting it into action.
Your strategy statement will help you communicate your strategy and test everything you do against it. A simple strategy statement fits on one page, and clearly shows the objective, scope and advantage that make up your strategy. You can write your strategy statement in three steps.
Your strategic objective should be a single goal. Make it specific and measurable, and set a target date for when you will achieve it.
Your objective should flow from the plans you developed by looking at the market, your business or both. For example, maybe your current market position of being the lowest-priced fireplace retailer in your area doesn’t suit your business profile. Your objective needs to help you set this right. You could set an objective to improve customisation to move your market position. You aim to have 50% of today’s total customer numbers designing their own custom fireplaces two years from now, adding value that will support prices about 40% higher.
Your scope is the boundaries your business will not go beyond to achieve your objective. Think about your scope in three areas: customer or offering, geographic location, and vertical integration (buying parts of the production or sales process that you previously outsourced). The ‘Looking inwards’ part of the strategy planning worksheet should help you set your scope by finding:
For example, you might want to expand the business but decide that you won’t open a new branch in the South Island until your business reaches a certain size. Or you might want to reduce your emissions, meaning you don’t scale up the business until you’ve made your production process more efficient.
Defining your scope up front helps you avoid wasting effort on tasks that don’t fit your strategy.
Your advantage explains the things that make your business unique, and how and why those things will help you succeed. You might plan to build on an existing advantage, or to redefine your point of difference.
Your strategy planning worksheet should have helped you identify your advantage by looking at your business, your customers, and your market. For example, your advantage could be:
To write your strategy statement, use our template with instructions, tips and examples for each of the three steps above.
Hinewai’s vision is for her gym to be the happiest place to work out for people of all ages in Hamilton in three years. She wants to develop a strategy that can help her get there.
She has looked at the Hamilton gym market, identified activities that made her Tauranga operation succeed, and worked out some options to create her own space as a community-focused gym in Hamilton. She feels ready to decide on her strategy and put her plans into action.
First, Hinewai looks at the other gyms in Hamilton. There are three major gyms, each offering similar training programmes but with different membership rates based on their location. She sees that she can’t compete directly with them based on price.
Hinewai’s business partner Sam is from Hamilton and has worked with two of the major gyms before. Hinewai identifies that Sam’s a key resource who understands the community better than anyone, and has the networks to recruit the right trainers for her gym. She also notes the other key resources and activities she needs to make her business unique.
Hinewai is keen to explore some options to stand out from competition. To make her gym space welcoming for everyone, especially for elderly people, she identifies some key points of difference her Hamilton gym will need. For example, she’ll need specialist trainers who can provide yoga, Pilates, and other balance and physical therapy programmes. She’ll need her facilities to suit people with restricted mobility too. Hinewai spots an opportunity to tailor the fit-out and decoration to suit that segment of the market. She hasn’t yet fitted out the space, so senior-friendly layout and furnishing choices won’t add much cost for her. Competitors would have to tear out some of their current setup to make changes.
Hinewai writes her strategy statement.
Once you are clear on your strategic objective, you need detail to implement it. Everything you do must line up with your overall goal. Creating a scorecard will help you develop all the projects and targets that will go towards meeting your strategic objective. Then your scorecard will help you track what you do and see how it contributes to your overall objective. You can create your strategy scorecard in three steps.
A scorecard for strategy can work only if you have a clear picture of what you’re trying to achieve. Everything in your scorecard relates to your strategy statement. This statement helps you describe what your business will look like at a set time in the future. If you have already written one, you have a great starting point for your scorecard.
This stage breaks your strategic objective into more detail in areas that are crucial for your business. For example, if you are a retailer you may be interested in improving your customer service. If you are a charity, you might be interested in community and wellbeing goals. Figuring out your detailed objectives helps you find how to measure progress, set targets and plan projects that help you reach them.
Split your strategy’s overall objective into four categories. Here are some popular categories that could be a good starting point.
Financial objectives are common for most strategy scorecards, but other areas could differ. If you pick your own categories, make sure they fit your overall strategy. For example, if you want to focus on sustainability you could use that as a category, writing detailed objectives for energy use, waste reduction, and other related topics.
Plan what you’ll do for each category. Everything you do should improve your performance in that category and contribute towards your overall strategic objective. Hinewai in our example above might pick customers as a category, and identify detailed objectives related to:
Keep the strategy statement and your overall objective at the centre and check how your four categories contribute towards achieving it. Your detailed objectives in each category need to be consistent with each other, and with the objectives in other categories. For example, you might check your financial targets are consistent with your objectives for innovation and learning or community objectives.
Make sure your timelines for these tasks align with your overall objective. Some of your projects could be quick and relatively simple. Others could be more complex projects that take months or years to complete.
The smaller the business, the more areas you generally want to improve. But connecting each detailed objective to your overall strategy helps you focus on the right measures and targets. For example, you might define ‘increased sales over last year’ as one measure for growing your profits, and choose ‘20% by value’ as your target.
When you’re working towards your strategic objective your measures will help you track your progress. For example, you might check against your eventual targets or set a series of milestones along the way.
To create your strategy scorecard, use our template with instructions, tips and examples for each of the steps above. You’ll create a scorecard that expands your strategy statement into the four categories you want to focus on, each with detailed objectives, measures, targets and what you’ll do to meet them.
Once you’ve created your scorecard, you’ll find it useful for more than just tracking your strategy. It’s also a great starting point for communicating change to your team, for planning the investment you might need, and for checking back to see if your strategy is holding up well or needs a review.
Scorecards help you make sure everyone understands a strategic objective and how their own actions relate to it. For example, your team may be worried about change, and this worry can often make people resist new responsibilities.
You could draw up a scorecard and talk everyone through it, so you all have the same understanding of the bigger picture. You could also use the scorecard as a prop for talking to each team member individually.
Exploring how their new everyday tasks contribute to the overall strategy helps people see that what they do matters, and helps them understand how they help the business succeed.
Any strategic objective you pursue is going to have an impact on your finances. Your strategic objective gives some direction to guide your budgeting and how you allocate resources. You’ll need the right people and equipment working towards the objective, and the money to pay for them.
Your objective also helps you set financial targets for revenues, expenses, profits and investments. Look at your financial statements and compare them against your strategy statement and the finance information in your scorecard. Where are your strengths? If you need to address some areas, what would they be?
Use our financial modelling workbook to estimate the future cash flow you would require to meet your strategic goal.
You can use a scorecard to get feedback on your strategy and gain new insights about your business. For example, maybe your projects to reduce costs are going well, but your overall costs are still well above your target. This might show you that you’ve missed out other important factors to measure, or that other projects or objectives are conflicting with this one.
Putting a new strategy in place will mean change for your business. When you introduce any change in the business, you can affect your people, processes, systems, business structure, job roles, or a combination of these. Managing change is always hard. As a small business owner you will probably be doing it on your own, without specialists or a big budget. The flip side of this is that you can also react to new opportunities faster than a larger company. And if you find problems with your strategy you can change quickly in response.
The most important steps for change management are:
If you can keep an eye on each of these, you have a good chance of success with your new strategy.