In my role as a business consultant, I see small companies struggling to evolve into larger companies. There are also large companies who have difficulty growing consistently, or even maintaining their current position. Why is that? Do they run out of ideas, do they reach maximum market share, or do they face competitors who are just too agile and disruptive?

Maybe its because some are running on autopilot, busy in their day-to-day activities but not taking enough time to look ahead and set a plan for their future. To be successful, businesses have to plot their own destiny and execute a strategy to get there. But at the same time they need to be agile and flexible to change if necessary.

Companies with visionary leaders have a strategic planning culture that dynamically drives their business forward. These companies understand their competitive advantage, they build a clear business mission and execute a roadmap for growth.

Here’s a surprising statistic though: Only 14% of employees understand their company’s business strategy and direction.

So what if the employees don’t understand it?

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Understanding the business strategy will build team motivation

Communicating this business strategy effectively throughout the organisation can create a powerful motivational environment. Employees feel a stronger sense of purpose and are invested in outcomes, giving them pride in how their roles and achievements contribute to the overall results. Managers also have clear guidance in how to set goals and measure performance.

Teamwork is strong in these organisations, trust is high and people are more empowered to work with less supervision which allows for agile decision-making. This is a familiar environment in a startup where business strategies and plans are usually fresh in the mind. However, all too often in established companies, strategic planning is treated as an occasional one-off event and even then, not widely communicated nor successfully executed.


Here are 10 warning signs that your all-important business strategy is unclear, is not properly communicated or is not being implemented effectively:


1. You cannot easily describe why your business exists

Can you articulate concisely what makes your business different and why your customers buy from you? Can do this without mentioning your competitors? Will all your employees have a consistent answer?

You should design a mission statement that clearly states why you exist and what is the value you create. As Simon Sinek explains in this TED Talk, people can be inspired by why you exist, rather than what you do and how you do it.


2. Sales pitches and marketing messages are not clear or consistent

Do all your sales team use a well-defined and consistent sales pitch to customers? Does your website and your marketing collateral reflect and reinforce these points?

You need your customers to clearly understand your value propositions or the pain points that you solve. The messages they receive from every interface with your company must be crafted to focus on your competitive advantage and should be convincing and memorable.


3. You chase every business opportunity, large and small

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Don’t waste resources chasing every opportunity

Are you tempted to respond positively to each opportunity that presents itself? Do you find yourself enhancing your current service offerings or product features even if it is not part of your core business?

By strategic planning, every company should be clear about what business it is in, what it will do and what it will not do. Otherwise, you risk over-stretching your resources, becoming distracted from your core strengths and confusing your employees and customers alike. By the 80/20 rule, 80% of your business comes from 20% of your customers and you cannot jeopardise these relationships by losing focus.


4. You are following rather than leading your competitors

Do you tend to discount prices on all your products or services trying to win business? Do you feel pressured to copy your competition’s sales and marketing tactics?

It is vital to analyse and define your company’s competitive advantage or unique value proposition, as this is where you differentiate from your competitors and it is what will drive your profitability. Understanding your competitive advantage allows you to redirect your resources and efforts, ensuring you focus on the most important customers and target the best business opportunities.


5. Your customers do not know exactly what you do, or your range of capabilities

Has a customer ever said to you “We placed the order with your competitor because we didn’t know you supplied those products/services”?

If you are not completely clear with your business focus then neither your employees nor you customers can be expected to understand your company’s competencies and scope. Your customer-facing personnel need to be coached, and your marketing plan should be developed hand-in-glove with your strategic vision to effectively position your capability and capacity.


6. You have no clear idea what your customers are really thinking

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Customer feedback is vital for your business

Do you know your customers’ big issues, their opinion on industry trends and their long-term strategies? How do they view your capabilities and what objections might they have to using your company’s products or services?

There are many inputs to the strategic planning process, but few are more important than feedback from your key customers. It may take persistence and time to reach out to the various functions and levels of a customer’s organisation, but the information gathered is critical to your decision-making. Involving key customers directly in your strategic planning process can also cement strong relationships and build trust in your company, positioning you as a resourceful partner.


7. You are not clear about important trends in your industry

Do you understand how regulations, technologies or other factors are affecting your industry? Do you know the total market size that you are competing for, and how fast it is growing, or shrinking?

Industry surveys and analysis reports can provide useful third-party inputs to your business planning process. Understanding your own customers’ outlook and their long-term strategy is also critical. The ‘Five Forces’ model created by Michael Porter is a useful framework to analyse the competitive forces that shape the strengths and weakness of an industry’s structure.


8. Your organisational structure is not setup to capitalise on growth opportunities

Are your teams operating as compartmentalised functions that do not share information freely? Is bureaucracy slowing you down, making you inflexible or distracting you from growing your business?

Organisations build and develop to meet the necessary business needs at the time. A fresh look at the structure and the business processes may be required because of changing market conditions, different customer demands or new business strategy implementation. Teams with the appropriate skills and experience must be assembled and aligned to support all the elements of the growth strategy.


9. Employees are not fully engaged or performing to their highest capabilities

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Goals and objectives will drive your team forward

Are your employees demotivated and under-performing? Are their performance objectives confusing and not aligned to overall business goals? Is mediocre performance accepted?

Communicating your business strategy to employees is vital to give them a sense of purpose and pride in their roles. By helping to define goals and objectives in alignment with your plan and vision, employees will buy-in to the process and be more invested in achieving results. Key performance indicators and stretch targets are more relevant and better understood when the business outcomes are clear.


10. You don’t know how you will grow

Do you have a clear idea what your business will look like in a year, in 3 years or in 5 years’ time? Is your growth plan just to keep doing what you’re doing but work harder? Should you expand your current operation, diversify product lines, enter new markets, partner with others, or identify M&A targets?

A comprehensive business strategy is your company’s growth playbook and roadmap. If well executed and maintained, the strategy will focus your resources and develop your competitive advantage to ensure your business is aligned to your customers’ needs and is adaptable to industry changes as they happen.


In short, Proper Planning Prevents Poor Performance, every time.

What are your experiences? How well is Business Strategy communicated and executed in your organisation? Does your business have a Strategic Planning culture?

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