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Be Strategic


Every company needs a long-range plan. For some, that might be just 3 years versus the annual operating plan. For others, it could be a 3-7 year plan. For large multinationals dealing in capital equipment, it could be 10 years. Even a startup needs to think in terms of 5-7 years, because that is a typical time frame for the angel investors to get a return on their investment through some sort of liquidity event such as an Initial Public Offering or a sale of the company to a strategic buyer. Whatever your time frame, it is definitely something more than a 1 year tactical plan. Think in terms of Strategic being an acronym. . . .

Solutions

Target

Relationship

Action

Teaching

Earnings

Growth

Innovative

Cost

Solutions

It has to be more than products and services. Those words focus on you and your company. I prefer to focus on the customer. I want to know what their issues are and where they are experiencing pain, discomfort, or frustration. Many companies grow in the long term by expanding from a single product or service to an integrated suite that provides more of a solution to the customer.

Target

Strategy is all about setting long range targets or goals for the company. You are at point A now, but you want to get to your target, point B. Sometimes it is not specific, but more shapes of what you want. Even so, you will need to have ways of measuring your progress to that target.

Relationship

You have to maintain a trusting relationship with your customer, your shareholders and investors, with your employees, with the government. We are all people, not machines that lack any emotion or spirit. Logic alone will not keep a customer returning for more, or an employee showing up for work each day. I use the term log-emo-tion to address logic, emotion, and action in a single word.

Action

Strategy is just a wish list if you don’t have actions that move you toward your target.

Teaching

Hard sell tactics and urgent please may work on some people, some of the time. But, that is more like giving someone food rather than teaching them how to fish. Long term relationships benefit by having your company teach the customer in subtle ways, helping them understand the value you are creating for them. It also applies to your employees and your suppliers. The strategy is teaching your people where the company wants to go and why. It’s logic and emotion that engages people to take action.

Earnings

Profit oriented companies are in business to create a profit for its shareholders. That’s earnings. For a non-profit, they need to have some earnings to be able to deliver to their constituency. For the non-profit, it’s also about earning the respect of the community you serve and the benefactors that provide donations to fund your activities.

Growth

Sales and earnings must grow. You cannot stand still. Inflation, taxes, costs are all going to increase. Therefore, the top line must grow faster than the bottom line in the sales/cost equation.

Innovative

Technology will change something. Customers will come to value different things over time and over time in their own world. While the millennials are viewed one way today, demographers are confident they will settle down, buy houses and have children as they get older. Therefore, you must continually innovate your products and services to meet the changing environment.

Cost

Controlling cost will always be an imperative. Cost reduction programs to correct for bloat in a company are often the result of poor strategy.