Business strategy: past, present and future
Business strategy, business strategy, business strategy.
It seems to be what all wannabe entrepreneurial influencers with a microphone and a social account are talking about!
But for many small businesses (SMEs), while the advice is brilliant, the question remaining is often: what even is a business strategy?
If you’ve ever watched an inspirational, five-minute video on LinkedIn about the key to a successful business strategy and were left with more questions than answers, you’re not alone.
Cut to the chase: what exactly is a business strategy?
Essentially, a business strategy is a set of plans, actions and goals that outline how you’ll compete in your market and with what products/services.
What do you want to achieve? Are you looking to grow revenue, increase market share, expand into new regions, open more stores or hire more people – these sorts of things are common goals.
How are you going to do it? Are you going to launch a new set of products, promote your services in different geographic locations, ramp up your marketing or even set up a new social media account – these are typical actions used to achieve the above goals.
So, just like that, you’ve got the skeleton of your business strategy sorted.
History lesson: where did business strategy start?
Let me begin by saying I’m no academic or theorist, but bearing this in mind, indulge me for a moment in a brief summary of how we’ve ended up where we are.
I’m sure it won’t shock you to read that strategic planning has its origins in the military; the phrase 'military operation’ exists for a reason – they really know how to plan.
But what might come as a surprise is that business strategy is a relatively new concept.
In the past, the closest businesses came to strategy was budget planning, which only began in the late 1920s or early 30s during what we know today as the great depression.
Budget planning began to evolve when the grandfather of business strategy, Peter Drucker, published 'Concepts of the Corporation’ in 1946.
Drucker analysed various businesses, determining that the most successful companies worked around a centralised organisational structure and saw value in comprehensive goal setting – the very foundation of business strategy.
As the decades marched on, academics began to pile in and add more brain power to the theory development, with the popularity of business strategy skyrocketing throughout the 60s and 70s.
Now, today the business strategy industry has evolved to be worth over £200 billion a year, with some companies spending millions.
The future of business strategy
So, as you can see, it’s been quite a journey for business strategy, but it’s not done evolving yet.
Today, strategy is no longer exclusive to the 'big dogs'; businesses from the very smallest to the biggest organisations on the planet should look to have a defined strategy or, at the very least, a business plan.
But the way you approach strategy needs to change.
The economic environment is no longer stable – I’d actually argue it’s never been less stable – and as a result, businesses need to adapt and discover strategic opportunities and risks as the world unfolds around them.
Real talk: what does this mean for a business looking to create its own strategy in 2022?
Well, as they say in basketball, 'think fast '.
The goals you want to achieve haven’t changed, but you can no longer commit to a fixed, long-term plan to achieve them; the evolution of your strategy must happen in the field.
Changing economic, technological, environmental, legislative and political factors all mean plans can change in an instant.
Think fast, think agile
I’d say there’s never been a better time for small businesses to thrive!
Why? Big businesses have a fundamental disadvantage today – they’re BIG and with size comes the struggle to be agile due to all the layers of sign-off and approval.
As a smaller business, you are perfectly placed to adapt at a moment’s notice when it matters most.
How do you act agile?
I’d advise you to assign resources to a very small number of priorities (one or two) and then put in place a framework that allows progress to be organised and driven by your actions and inputs.
The final piece of the puzzle is the most important and difficult to quantify, the team; the people you assign these tasks to must be competent, willing and understand the goals.
Use case example
Take a (make-believe) home goods store during the pandemic as an example.
When the lockdown was introduced, and shops had to close, the example home goods store quickly reconsidered their goals to adapt.
At the time, they were trying to refurbish their onsite premise to draw in more foot traffic but with an agile business strategy, they reacted to the change and instead flipped their focus on developing/pushing their online presence.
Staff focus turned to online promotion, website development and packing/shipping products remotely, which enabled rapid growth during uncertain times.
If you can bring focus, priorities, measurements, drivers, framework and people, you can achieve amazing things far faster than you may think.
Investing in technology to support your business strategy? Check out our recent blog that delves into showcasing the return on investment from HR tech.