Long-term Strategy – A Game Plan

Long-term strategy is a roadmap to a desired vision of a future state.

Long-term strategies in business are ubiquitous; everyone has them.  Just ask a business owner to tell you about his strategies and they will give you an earful.  With such a focus on these strategies, why do so many of them fail?

The primary reason many strategies fail is that they are disconnected from the environment within which they must play.  In effect, they are not designed to be clearly understood by those who must implement them.  They are often filled with buzzwords, an over inflated goal/objective, and a lack of clarity.  It sounds great, but it is hard to get your arms around.  They are devoid of elaboration, so it is up to the individual to figure out what they mean.

Long-term strategies must be both precise and broad in scope.  They are precise enough to enable the implementers to clearly understand the objective and broad enough to enable the implementers to journey beyond customary limitations; they have to be able to make adjustments to resources (time, people and money) based on what they are learning during implementation.  They must have some flexibility.

Successful long-term strategies:

• are designed from a future perspective. You must develop a clear vision of that future state, and then design the path to get there.
• are carefully chosen from a list of possible strategies. It is a selection process; it is choosing the most important strategies that will have the greatest chance of being successfully implemented.
• require buy-in by senior management; i.e., commitment. Commitment must be observable.
• require providing direction and the distribution of responsibility.
• have a reasonable time frame; e.g., three to four years. In most businesses you cannot be precise enough in a six to ten-year strategy.
• require making difficult choices, specifically resource decisions (time, people and money). You must make decisions without prefect data and weigh the consequences of those decisions; both to the current state and to the strategy.
• are measurable; they have metrics.
• are executable living documents.
• are communicated to the proper levels of the organization.

Long-term strategies can simply be a great idea with limited action, or they can be a game plan with players on the field.  Only the latter keeps score.

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Advisory Boards – A Valuable Asset

A common misconception of business owners is that outside advisory boards are for larger companies – multi-million dollar international firms you read about in the news.  Smaller mom and pop shops, individual proprietors, or firms with less than $5 million in revenue would never have an outside advisory board. – Not true.

An outside advisory board consists of three or four individuals (outside of your business) that have the competencies and capabilities to help you be more successful.  It is that simple.

Most businesses are started by an individual, or several individuals, who invest their personal capital (time and money) in an idea.  In the beginning, they do everything, primarily because they simply don’t have the funds to hire employees.  If successful, they gradually develop into a more structured organization with numerous employees, customers, business relationships, and a defined capital base.  Along this journey, it becomes increasing difficult for the owners to break away from business operations to spend time thinking about the strategic perspective of the business.  They can’t work on the future because they stuck in the day-to-day.

This is where an outside advisory board can help a lot of companies.  Its primary purpose is to help/guide owners to spend time working on the future of their business.  In other words, planning for the future.  Of course, outside advisory boards also help owners work on the day-to-day stuff; but their greatest value is strategic.

There is a long list of reasons why companies say they have not considered outside advisory boards.  In many cases, the reasons are based on a lack of understanding of the role and responsibilities of outside advisors.  In other cases, the owner simply does not want outside advisors.  For companies that set up advisory boards, the board is one of the most valuable assets an owner can draw upon; regardless of the size of the business, its products or services, or its industry.  Clay Mathile, founder of Aileron and former owner of The Iams Company, has said that “if I had a popcorn stand on the corner of Third and Main in Dayton, I would have an outside board; it is the best investment you will ever make in your life.”  I know quite a few companies that have set up a Board of Advisors, and not a single one has regretted that decision.  Most wish they had done it sooner.

There are organizations that can help you develop a better understanding about the value of an outside advisory board.  Check local business listings, organizations, chambers, etc. to find out more.

On the other hand, I realize that outside advisory boards aren’t for many business owners.  If this is the case, find an strategic business expert that can help you develop and implement a “strategic perspective” of your business.  Like advisory boards, a strategic business expert is also a valuable asset business owners can draw upon to help them to be more successful.

Regardless, of setting up an outside advisory board or using an expert, you must take charge of your future; don’t leave it to chance.

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