Is Business Strategy a Waste of Time?
Many start-up owners think that business strategy isn’t relevant to them – it’s just for multinationals and large companies. Nothing could be further from the truth. If you want to be successful you have to have a clear strategy that will guide you through the early, dangerous years of your business. It’ll help you avoid the pitfalls. It’ll stop you wasting time and money on unnecessary distractions. It’ll give you the clarity to focus your resources and achieve your most important objectives. In this video I’ve used the maiden voyage of the Titanic to explain what you need to know.
As Simple as Possible
Creating strategies can be complicated but I’ve taken a very simple approach that will work for start-ups and small businesses. It’s enough to get you started. As your business grows you’ll need to add more factors but, by then, you’ll have the experience to do that easily.
Your First Time?
If you haven’t created a strategy before you may need to watch the video several times. You’ll also find the next lesson useful. I’ve also added more information in this article, below the video.
Download the MSD Matrix
You’ll find the link to download the matrix here (no, not the one with Keanu Reeves) – along with other free downloadable resources.
The Mission Statement
I explained the Mission Statement in the video but it’s worth looking at some examples because it’s very important. First, a mission statement should not be something like: “I want to be worth $100 million in 5 years”. Instead, it should focus the benefits you hope to give the customer and – in the process – it should define your niche.
For example, “We will be the best developers of medical database add-on modules in the world.” That’s a useful statement because it defines a niche and it prompts a series of questions that should be answered by the strategy. For example, do we need to be certified? Do we need specific programming skills? Should we compete world-wide or start in our local market? Who are the big players in the market?
It also raises another question – how do we define “best”? How would we know if we’ve achieved it? So we’d go back to the mission statement again and re-define it. It might mean achieving the fastest response time or the most compact code or the most seamless integration with the host application.
A successful mission statement is a powerful document that will affect how you behave and the decisions you make. It will guide you towards some areas and away from others. It might just prevent a disaster.
Defining Your Business
You saw how to identify your niche in the video. That’s important because it takes advantage of your strengths. However, don’t act on it yet – wait until you watch the next lesson. I’d suggest that you carry out the exercise with the MSD Matrix and let it lie for a few days. In the meantime, think about other options if your first choice was blocked. Then watch the next video.
Some of this strategy stuff is quite subtle. You won’t really appreciate the benefits until you find yourself in a difficult situation. It’ll simplify your choices and guide you in the right direction. However, that won’t happen unless you put time and energy into doing it properly. If your mission statement is simply a paper exercise, it’ll have no power to help you when you need it most.
The Titanic Mission Statement
I can’t be sure that the Titanic had a mission statement as shown in the video. However, all reports indicate that the desire to beat the fastest crossing time record was one of the major contributing factors to the eventual disaster (the iceberg being the main one). It drove the Captain’s behavior on that night. A proper mission statement might have prevented the disaster.