Covid-19 is first and foremost a human tragedy. However, it will also have shifted your customers’ problems and how you deliver your value proposition. Therefore, your strategy will need to be adjusted so you can continue to provide superior value to your target customer relative to the competition.
You can use our Strategy Blueprint© to create your strategy from scratch, augment it or layer on top of any existing analysis such as a Business Plan, SWOT, PESTLE, VRIN etc. that you may have conducted.
IVC’s Strategy Blueprint©
There is a persistent belief amongst Startups and SMEs that business strategy is an overkill, complex and requires a lot of work for little gain. Consequently, resources are almost solely deployed on doing and working “in” the business, and minimally to designing and working “on” the business.
However, this inaccurate belief can be deadly: in the US c.50% of new businesses fail within 5 years; in the UK it is c.60% and c.90%+ for Startups; in the US another 40% fail between their 5th and 10th year. Worse still, this is against a backdrop of chronically low profitability.
A root cause is that a successful business requires a lot more than a good idea and hard work. To profitably build and scale a business necessitates working effectively “in” the business and effectively working “on” it. To work effectively “in” and “on” the business requires a strategy, like our Strategy Blueprint©, that is intuitive, innovative, implemented and agile.
“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat” – Sun Tzu, a Chinese general and military strategist identified this around 500BC!
Startups and SMEs often believe that they are less complex and can therefore intuitively understand the current business, where to go and how to get there. We would question the validity of this belief based on their failure rates alone.
Additionally, there are now tremendous opportunities to create a global/continent-wide small business by harnessing technology platforms, the gig economy and integrating into ecosystems. Our Strategy Blueprint© provides the clarity to help Startups and SMEs step change to the next level.
So, should we solely rely on our intuitions to build and scale our business?
Scientists at the Max Planck Institute in Germany conducted a study showing that people walk in circles, once visible cues are removed. Yet participants were convinced that they were walking in a straight line!
The research noted “Small random errors in the various sensory signals that provide information about walking direction add up over time, making what a person perceives to be straight ahead drift away from the true straight ahead direction”
Would you stay on the plane if the pilot announced – “Ladies and Gentlemen I am going to turn navigation off, as I intuitively know the way, and planes are off course c.99% of the time anyway”? No, you wouldn’t. And likewise, you should not attempt to profitably build and scale any sized company without a strategy.
Our Strategy Blueprint© provides clarity on the current business, where to go and how to get there. Yes, you will be off-course a lot of the time, but the strategy acts as the compass to keep you heading in the right overall direction via constant adjustments in tactics informed by a well-designed measurement system.
The Problem
Business Plans, Accounting Reports, etc. are useful for presenting ideas, facts and backwards-looking analysis but are not designed for building and scaling a business – see IVC’s blog “You Need a Blueprint of your Business to Increase Profits & Scale and Work “On” it– Business Plans, Accounting Reports etc. don’t work.”
Additionally, business strategies are typically unwieldy, complex and hard to execute. Mankins and Steele note in an HBR article that “Most companies’ strategies deliver only 63% of their promised financial value…. How to avoid these errors? View strategic planning and execution as inextricably linked – then raise the bar for both simultaneously….including: keeping your strategy simple and concrete.”
Moreover, strategy theory taught in business schools tends to focus on large companies and can be hard to adapt for Startups and SMEs. Additionally, strategy has its own technical language, which can be intimidating and make it hard to turn theory into action. Theory that cannot be actioned is effectively worthless!
That is most unfortunate as in my experience, owners and entrepreneurs from Startups and SMEs are natural strategists, making strategic decisions every day, but not framing them as such. Strategy has been used to run businesses for centuries, but strategic management as a discipline is a relatively recent development.
Startups and SMEs need a simple actionable and visual strategy blueprint that can be operationalised and deliver value with a relatively small investment in time and money. (Large companies actually have the same need!)
Our Strategy Blueprint© has been designed to be simple, actionable, and visual; it embodies these two guiding principles:
- “The explanation that requires the fewest assumptions is superior” Occam’s Razor
- “Everything should be made as simple as possible, but no simpler” Einstein
IVC’s Solution – The Power of Simple, Actionable & Visual
Business strategy is viewed and defined in so many different ways, which is confusing. For clarity, our definition of business strategy is shown in the infographic below.
In plain English business strategy is about making choices about how the business creates, delivers and captures value to create a durable competitive advantage. Tactics are the actions to make it happen. Strategy drives tactics, but tactics also drive strategy where there is a top-down and bottom-up feedback loop – see IVC’s blog Competitive advantage needs a winning strategy AND excellent execution.
Our Strategy Blueprint© has been designed so that Startups, SMEs and even Corporates can create a strategy that delivers on its promise by being intuitive, innovative, implemented and agile.
Our blueprint has five fundamental building blocks presented in the form of a jigsaw – see below for a visualisation of it.
You assemble a jigsaw by putting the pieces that fit together, and the same goes for strategy. The pieces are interrelated, so if you change one of the pieces you will have to adjust some of the remaining pieces.
You can have great jigsaw pieces, but if they don’t fit into your strategy, they must be rejected – strategy is about making choices of what to do and what not to do. However, it is hard to discard great ideas. Steve Jobs noted that focus means “saying no to the hundred other good ideas that there are”.
Your Top Five Benefits from IVC’s Strategy Blueprint©
- Increase profits, cash flow and business value
- Scale profitably by working “on” the business and systemisation
- Clarity and visualisation of the business, where to go and how to get there
- A strategy that is intuitive, innovative, implemented and agile
- Value-Based-Management that supports strategic positioning and execution
By Hugh Page
MD Integrated Value Consulting (IVC)
- IVC is a Business Advisory Firm enabling SMEs and investor-backed Startups to Build, Scale and Sell a Valuable Business at a premium
- We Demystify Strategy & Valuation to Increase Business & Exit Value and Attract & Wow investors for Debt / Equity Raises, Acquisitions & Exits
Take our Valuable Business Builder© Scorecard: get insights to maximise your business & exit value, for free.
For more details see www.ivconsulting.co.uk
Index of this 6 Part Blog Series
- Blog 1: Overview
- Blog 2: Mission Statement
- Blog 3: Target Customer
- Blog 4: Unique Value Proposition
- Blog 5: Core Capabilities System
- Blog 6: Measurement System
This 6-Part series is designed to add value on its own. To go faster, deeper, overcome inevitable obstacles and take your business to the next level, please schedule a call to see how we can help.
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