Creating a successful business strategy is a huge challenge today, especially as more people take the plunge and get into entrepreneurship. Not to fret, because new and old companies alike are currently undergoing a huge digital overhaul whether they like it or not. Today, few businesses can survive without the use of data aggressively intwined in strategy. The key to a successful strategy is to start with the right mindset and a clear understanding of the market and the competition of where your target is. In this article, we focus on the first steps to consider when creating a successful business strategy, including where to start, how to reduce the noise, and how to take a data-first approach. This is not an exhaustive article, but one that talks about where to start which is often like building a wall; your first step is the most crucial and essential one.
Where to start?
When creating a business strategy, it is important to start with the end in mind.
Where are we going? What is the goal?
This means understanding your company’s overall goals, objectives and working backwards from there. It goes without saying, but there’s often a misconception that a goal of “being successful” is enough. However, due to it’s vague answer, it’s difficult to envision and is much easier to default to what we know. The most important starting place is your mission and vision.
Mission and Visions
A company’s mission statement and vision is a helpful compass in guiding those aboard the ship. The mission and vision will serve as the foundation for all of your decision-making and will help guide you as you move forward.
Once you have a clear understanding of your company’s mission and vision, it’s time to take a deep dive into the market and the competition. It is important to understand your target audience and what they are looking for in a product or service. This will help you to identify opportunities and areas where you can differentiate yourself from the competition.
Examples of great mission statements
Helpful in getting started is a little inspiration from great companies who have accomplished great things by creating a following to their brand within their organization.
|Jetblue ✈️||to inspire humanity – both in the air and on the ground|
|Starbucks ☕||to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.|
|Tesla 🚗||To accelerate the world’s transition to sustainable energy.|
These are a few examples, but you can look up your favourite companies here for more inspiration: Mission Statements
Note that these companies have bold objects to steer the company and their clientele towards a common goal. It’s the vision the company has and provides a guiding light to those who want to understand how great companies continue to remain competitive in their industry. From here, companies set organizational goals to reach the heights of their bold missions.
Goals or Objectives
Jonathan Haidt’s, Happiness Hypothesis, describes decision making within the human mind to take place between two key figures on a path:
- The elephant - force and momentum
- The rider - direction and guide
If the elephant doesn’t have a clear direction, then the force and the momentum will go to where it’s comfortable and the direction that it knows. That leaves the rider without control (aka the boss) for where to steer the elephant (organizaion). If you’ve never heard it before, creating a goal should be concrete, tangible and measurable with deadlines.
Specifically, i’m talking about SMART (Specific, Measurable, Actionable, Relevant and Time bound) goals as the one you might be familiar with that are useful in achieving goals for your business. An alternative approach for goal setting which follows similar principles that are more frequently revised are OKRs (Objectives and Key Results). We’ll go into a few examples of each kind to help you refine yours.
Examples of SMART Goals
Personal, professional or divisional goals with a SMART structure make it clear and concrete for a business or their people be accountable and achieve new heights. Here are examples of SMART goals and their structure to give you an idea of how they might be structured.
Example (Service or Product Company) - Revenue in a new line of business 💵
Achieve $100,000 in sales with our newest line of business by capturing 10% of existing clients by December 2023
Example (Retail Company) - Client acquisition 🧑
Double our existing client base for our top selling product in a new geography within the next 12 months
Example (Software Company) - Creating a product 💡
Build a new software product for helping clients monetize use of our platform designed for our core user base and launch the beta with 6 months
These are relatively generic and i’ve left them flexible in the event you, the reader, have these ideas already and would like to make it more concrete within the context of your business. However, this is one framework that is useful in a business tool kit.
SMART goals also have their drawbacks and require revisiting or they risk becoming irrelevant to the core business if they aren’t iterated over time. For this reason, modern companies have moved towards OKRs to have a persistently moving target that is revisited as frequently as needed with reporting or meetings.
OKRs - A crash course
OKRs are a goal-setting framework that helps businesses and teams set and achieve their objectives. First developed by Intel and has since been adopted by many successful companies, including Google, Amazon, and LinkedIn. OKRs are a simple but powerful method that can help businesses focus on what is most important and achieve their goals more effectively.
How does it work?
The OKR framework is based on setting objectives that are specific, measurable, achievable, relevant, and time-bound (SMART). Once the objectives have been set, they are broken down into key results, which are also specific, measurable, achievable, relevant, and time-bound. Key results are the specific metrics that indicate progress towards achieving the objective. The difference is that they are less time bound, but are frequently revisited so that employees can reflect progress at different intervals to determine if the initiative continues to be relevant or not.
Examples of OKRs
Prominent companies use OKRs and here are a few that have used them in their core products and visit them frequently.
Objective: Increase user engagement on the search results page.
- Increase the click-through rate on search results by 5%.
- Increase the number of searches per user by 10%.
- Increase the time spent on the search results page by 15%.
Objective: Improve customer satisfaction.
- Increase the number of 5-star reviews by 20%.
- Reduce the number of customer complaints by 15%.
- Increase the percentage of repeat customers by 10%.
Objective: Increase revenue from premium subscriptions.
- Increase the number of premium subscribers by 15%.
- Increase the average revenue per premium subscriber by 10%.
- Increase the retention rate of premium subscribers by 5%.
Objective: Increase market share in the online retail industry.
- Increase the number of active customers by 10%.
- Increase the conversion rate of website visitors to customers by 5%.
- Increase the average order value by 10%.
With a single objective and several methods of measurement,you can avoid biasing your goals and penalizing other parts of the business
How to reduce the noise: being hyper-focused
To create a successful business strategy, you need to be able to cut through the noise and distractions that can derail your efforts. A critical first step is to develop a clear understanding of your market and competition. This includes analyzing your target audience and understanding their needs, preferences, and buying habits. By gathering as much data as possible about your customers and competitors, you can make more informed decisions about where to focus your resources and energy.
Good questions to focus on when cutting through the noise:
- Who are your customers, and what are their demographics?
- What are the key pain points and challenges that your customers are facing?
- What are your customers’ goals, desires, and aspirations?
- How do your customers prefer to communicate, and through which channels?
- What are the specific features and benefits that your customers are looking for in your product or service?
- What is the price range that your customers are willing to pay for your product or service?
- What are your competitors doing to meet the needs of your target audience, and how can you differentiate your offering from theirs?
- What are the most effective marketing channels and tactics for reaching and engaging your target audience?
- What data and metrics do you need to track in order to measure the success of your efforts?
- How can you continuously gather feedback from your customers and adjust your strategy accordingly to stay aligned with their needs and preferences?
You don’t need to be able to answer these all right away, but these are the important steps in today’s business environment as successful products and, specifically businesses, focus on a user-first approach to selling their product. This way, customers become ambassadors
Science meets business: Data-first approach
Data can help businesses of all sizes to make more informed decisions, improve their operations, and increase their profitability. However, it’s not just about collecting as much data as possible - it’s about having a strategic focus on the most relevant and actionable data that can drive meaningful results.
By taking a data-first approach, businesses can gain insights into their customers, their industry, and their competitors that were previously impossible to obtain. With the right data, businesses can better understand their target audience, their preferences, and their behavior. This can lead to more effective marketing, better product development, and stronger customer relationships.
Moreover, a data-first approach can help businesses to optimize their operations, reduce costs, and increase efficiency. By collecting data on everything from supply chain management to customer service, businesses can identify areas for improvement and implement changes that lead to greater profitability.
For new businesses, a data-first strategy can be particularly impactful. By starting with a clear focus on the most relevant data, new businesses can avoid costly mistakes and make smarter decisions from the outset. For established businesses, a data-first approach can help to stay competitive and adapt to changing market conditions. In conclusion, creating a successful business strategy is not easy, but it is essential for the growth and longevity of any company. The key is to start with the right mindset and a clear understanding of the market and the competition. By being hyper-focused on your target audience and taking a data-first approach, you can reduce the noise and make better decisions that will drive your business forward. Remember, it’s important to define your company’s mission and vision and use it as a foundation for all of your decision-making and to constantly track the progress and be open to new data and pivot if necessary. The key is to stay optimistic and take action with urgency. With the right strategy in place, your business can achieve great success. Speak to one of our specialists today at EV Advisory about how data science can elevate your business