The importance of Strategy!
Why is ‘Strategy’ so important, and why is it important to have your strategies documented?
Before we can answer that question, it is important to first ask – who are your business partners?
Who are the people and organisations who will assist you in ‘being successful’?
Then we need to ask – what does ‘being successful’ look like?
What are your business’s ‘key success factors’ – how will success be measured?
By being clear about what your Strategies are, and having them documented, you make it easy to share those strategies with your various business partners. And in doing so you help to ensure that everyone is on the same page and working together in the same direction.
You can then put in place a monitoring and measurement framework to compare actual performance against planned outcomes!
Lenders and owners (both existing and potential) can then gain greater confidence in whether your business is a good investment opportunity.
Management and staff can be more focused on how they are adding value, and be synergised in helping the business toward success.
Customers and suppliers can develop a greater sense of their importance in your business and its success.
Other advisors are better placed to provide more targeted specialisation and guidance.
You should have a wide range of strategies documented!
At S&A we specialise in advising on and managing business risk.
These are particularly the risks that investors (lenders, as well as equity partners) will be looking at. The risks they will be looking at when assessing whether or not to invest. And if they do decide to invest, what level of return they’ll be looking for to compensate for their perceived investment risk?
In summary, by developing and documenting Strategies, you help to ensure all business partners are working together in synergy toward the same outcome.
By putting in place a monitoring and governance framework, you help to ensure the business remains on track toward its desired outcomes - toward what you define as Success!
By getting all business partners working toward clearly defined outcomes, and being able measure actual performance against expected outcomes, you help to build improved Shareholder Value!