You Have a Product, Now You Need a Strategy Without a clear strategy, companies often get sidetracked.
By Greg Shepard
Opinions expressed by Entrepreneur contributors are their own.
Startups pushing to enter the market at just the right moment have no time to rest on their laurels after coming up with a great idea. But many still make the mistake of moving forward without a detailed strategy for turning that burst of inspiration into reality. A study featured in Entrepreneur cites a "lack of persistence" as the third most common reason why startups fail. Without a clear strategy, companies often get sidetracked. Constant changes in direction can result in wasted money, time and energy.
Once your company's mission, or North Star, is solidly in focus, it's time to start plotting a course that will ensure the company reaches its goals. Taking a systematic approach, in which big ideas are broken down into measurable objectives, can help teams stay organized and accountable as they plot a roadmap toward eventual exit.
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Examining all factors that can affect the success of your business, both internal and external, is a fundamental step toward building a viable strategy. The next step is to establish missions that align with the company's North Star. Finally, companies need to determine early on when the work will get done, who will do it and how progress will be measured.
Identify headwinds and tailwinds.
To get started, companies should take the time to do a SWOT analysis -- a strategic planning assessment that helps companies analyze strengths, weaknesses, opportunities and threats. This allows founders to pinpoint advantages that will help the business move forward, as well as the hurdles that might slow it down.
Think about how each factor complements or negates other factors -- how your company's internal strengths allow you to take advantage of opportunities and avoid external threats and how internal weaknesses may prevent you from doing those things. For example, your company might have a highly skilled engineering team that develops innovative solutions but fails to meet its deadlines, so the company misses opportunities to beat competitors to market. A company's core strategy should include steps to make improvements in these areas and to prevent problems from snowballing later on.
SWOT can also be used to evaluate a product's viability. One of my clients developed a secure mobile app that allows transit customers to purchase train, bus and ferry fares on the go without having to stop at a ticket booth or machine. The payment system could be replicated for other transit systems without having to rewrite the software each time. The product's biggest strength was that it hadn't been done before, but its weakness was that transit systems did not have the infrastructure in place. To address this issue, the company built readers that could scan mobile devices as well as ticket machines that dispensed cards with chips to serve customers who don't use the app.
The startup exploited the opportunity of creating a brand new market, and it avoided the threat of another company releasing a similar app by developing the infrastructure required to make the payment system work. In this case, doing a thoughtful SWOT analysis of the product before it launched helped guide the company toward success.
Related: Uncover Market Opportunities With This Roadmapping Strategy
Divide and conquer.
The next step, what I call MOKM (Mission, Objective, Key Results and Measures), is about turning ideas into concrete actions. A mission is a brief, clear statement of what you want to achieve. Objectives articulate what is expected and when the work should be complete. Key results are the tasks that must be completed in order to achieve the objective. Measures are quantifiable indicators of progress toward a given result.
Each of the company's functional areas are given at least one mission, and those missions should encompass three to five objectives. The objectives are defined by key results, each with specific measures. Establishing this workflow hierarchy helps employees stay on task, align their daily tasks with the company's missions and North Star, and establish cohesive company-wide operations.
Let's say, for example, that a marketing and sales department's mission is to increase its conversion rate by 25 percent by the end of the quarter. One of the marketing team's objectives would be to develop campaigns that produce a certain number of viable leads, while sales would be tasked with closing deals with a certain percentage of those leads. Once both teams complete the key results tied to all of their objectives, then the mission is complete.
According to Gallup, employee engagement and performance is much higher when people fully understand their organization's purpose and feel their job is important in achieving specific objectives. Having a clear mission and a transparent game plan for how to achieve it can go a long way toward keeping employees motivated at work.
Define how the work will get done.
Departments often get caught up in trying to accomplish as many tasks as possible, even tasks that might not have a significant impact on the bottom line. Prioritize work by examining the level of each mission's impact, whether it is urgent or important and the amount of effort it will require to complete. Ideally, tasks defined as high impact and low effort -- the "low-hanging fruits" -- would be completed first.
Related: 4 Lessons That Most Successful Entrepreneurs Had to Learn the Hard Way
The final step is to delegate tasks and establish accountability with the RACI process. RACI stands for Responsible (who will be charged with doing the work), Accountable (who ensures the work gets done), Consulted (who else needs to be involved with the project) and Informed (who is debriefed after the project is complete).
According to Atlassian, 59 percent of U.S. workers say communication is their team's biggest obstacle to success, followed by accountability at 29 percent. Having a clear strategy that defines who is responsible for certain tasks and in what order they need to be carried out eliminates ambiguity and makes teams more effective.
Misaligned objectives often cause confusion across a company's functional areas. This confusion can lead to inefficient processes, employee turnover and reduced profits. Companies benefit immensely from strategies that ensure each department is working toward a central goal. Strategies are most effective when they can clearly illustrate how much progress has been made, yet are agile enough to adjust the finer points as priorities shift and the company grows.
