Four Key Elements For Establishing A Winning Strategic Direction
Often small and medium sized company owners; especially in the engineering, trades, and technology industries….no offence intended ;) say the following: “I have a successful & profitable business, what does an “MBA” or consultant know about my business when they have never been a trades person, an engineer or software developer”? To be fair this happens across all industries and company sizes though. Just like you consultants have spent many years in the field working for different companies as well as going through years of education in many different areas of study.
It is true many of these businesses are profitable without hiring outside consultants. However, a case can be made that if you are lucky enough to have a company in this position you have a duty to always continue to grow sustainably. For example, think about the one extra better paying job you could generate which supports a young family or the more you could give back to your local community. Companies can always do a little more by seeking sustainable and low-risk profitable growth. You don’t need to be 100% better to see 100% improvement. A small change in the right place makes a huge difference. It’s a concept called the winning edge.
4 easy steps you can take to grow your business without having to commit lots of time and money. Make sure you have the following and that they are up to date:
1) Vision Statement:
This vision statement defines the direction of your organization for the next foreseeable amount of time. The vision is the bigger picture “why” the company is in business and is a clear and concise statement. The typical timeline is 5 years but depending on the stage your company is at this could range from 2 to 10 years. The vision clarifies the organization’s meaning and purpose to all stakeholders, especially employees.
2) Mission Statement:
This mission statement defines the route to achieving the vision. It is for a shorter amount of time and typically ranges between 12-24 months. Again, this depends on the current stage of the organization. The mission clarifies what business you are in and how you service customers.
3) Target Acquisition:
Strategic objectives set up the main areas of focus that you have determined are absolutely necessary to achieve if the company is to thrive. The objectives need to be specific, measurable, actionable, and of course compatible with your company.
4) Performance Metrics:
In order for each strategic objective to drive value into your company it needs to be supported by a structure. The easiest way to do this is by using the balance score card method and having at least 4 key performance metrics tied to each objective. This way you can track progress against the main strategic divers behind your organization’s future success. The amount and type of metrics varies from company to company but, it is good practice to have between 4-6 per each strategic objective.
In the coming months focus on developing out these for areas and communicating them effectively to both your internal and external stakeholders. Do this and you will easily see company profits grow in the short-term and in the future.