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Turning strategy into action
Your strategic plans will only succeed if you can put them into action. After you’ve looked at your situation and considered the options, you should have an idea of the right strategy for your business. Now you need to document your strategy, break it down into smaller objectives and tasks, do those tasks, and monitor your progress. You’ll also need to manage the change in your business and bring your team along with you.
From a plan to a strategy statement
A strategy statement is how you record the strategy you’ve chosen and show how it leads to the outcome you want. It’s the starting point for turning your strategy into doable tasks. This is when it starts to become real.
Have you identified your strategy by looking outwards at your market, looking inwards at your business, and looking for opportunities to create your own space in the market? Grab your notes in your strategy planning worksheet, and use this page as a guide to documenting your strategy and putting it into action.
Your strategy statement will help you communicate your strategy and test everything you do against it. A simple strategy statement fits on one page, and clearly shows the objective, scope and advantage that make up your strategy. You can write your strategy statement in three steps.
1. Choose your objective
Your strategic objective should be a single goal. Make it specific and measurable, and set a target date for when you will achieve it.
Your objective should flow from the plans you developed by looking at the market, your business or both. For example, maybe your current market position of being the lowest-priced fireplace retailer in your area doesn’t suit your business profile. Your objective needs to help you set this right. You could set an objective to improve customisation to move your market position. You aim to have 50% of today’s total customer numbers designing their own custom fireplaces two years from now, adding value that will support prices about 40% higher.
2. Set your scope
Your scope is the boundaries your business will not go beyond to achieve your objective. Think about your scope in three areas: customer or offering, geographic location, and vertical integration (buying parts of the production or sales process that you previously outsourced). The ‘Looking inwards’ part of the strategy planning worksheet should help you set your scope by finding:
- the unique activities that make you money — focus on these
- the activities that aren’t unique or don’t make you money — focus less on these, cutting them back if you can
- other opportunities to add more value without too much extra cost, or to cut costs without hurting your value.
For example, you might want to expand the business but decide that you won’t open a new branch in the South Island until your business reaches a certain size. Or you might want to reduce your emissions, meaning you don’t scale up the business until you’ve made your production process more efficient.
Defining your scope up front helps you avoid wasting effort on tasks that don’t fit your strategy.
3. Identify your advantage
Your advantage explains the things that make your business unique, and how and why those things will help you succeed. You might plan to build on an existing advantage, or to redefine your point of difference.
Your strategy planning worksheet should have helped you identify your advantage by looking at your business, your customers, and your market. For example, your advantage could be:
- making the most of your key resources if they are valuable, rare and hard to imitate — like the perfect location
- providing something that your customers value and that they can't get anywhere else
- creating new value by adding product or service elements to what you offer today
- taking an opportunity you’ve identified to stand out from the competition.
Write your own strategy statement
To write your strategy statement, use our template with instructions, tips and examples for each of the three steps above.
Case study
Hinewai writes her strategy statement
Hinewai’s vision is for her gym to be the happiest place to work out for people of all ages in Hamilton in three years. She wants to develop a strategy that can help her get there.
She has looked at the Hamilton gym market, identified activities that made her Tauranga operation succeed, and worked out some options to create her own space as a community-focused gym in Hamilton. She feels ready to decide on her strategy and put her plans into action.
First, Hinewai looks at the other gyms in Hamilton. There are three major gyms, each offering similar training programmes but with different membership rates based on their location. She sees that she can’t compete directly with them based on price.
Hinewai’s business partner Sam is from Hamilton and has worked with two of the major gyms before. Hinewai identifies that Sam’s a key resource who understands the community better than anyone, and has the networks to recruit the right trainers for her gym. She also notes the other key resources and activities she needs to make her business unique.
Hinewai is keen to explore some options to stand out from competition. To make her gym space welcoming for everyone, especially for elderly people, she identifies some key points of difference her Hamilton gym will need. For example, she’ll need specialist trainers who can provide yoga, Pilates, and other balance and physical therapy programmes. She’ll need her facilities to suit people with restricted mobility too. Hinewai spots an opportunity to tailor the fit-out and decoration to suit that segment of the market. She hasn’t yet fitted out the space, so senior-friendly layout and furnishing choices won’t add much cost for her. Competitors would have to tear out some of their current setup to make changes.
Hinewai writes her strategy statement.
- Her strategic objective: Double the number of fitness programmes offered in her gym and turn the Hamilton operation profitable by the end of the financial year.
- Her scope: Provide specialised training programmes for elderly customers in Hamilton. She’ll update facilities to suit this audience, hire new staff, and do some targeted marketing. She won’t remove any current programmes or equipment. She’ll stop offering loyalty discounts for current members, which doesn’t align with this strategy.
- Her advantage: She’ll use her business experience from Tauranga and Sam’s local insights and networks to help build the team required for a high-quality experience customised for older customers. They have unique skills and experience competitors can’t match. The gym’s layout, decorations and furnishing will be tailored to these older customers. She has an advantage over competitors here because she’s already budgeted for work on the facilities, and tailoring that work won’t change the cost much. She’ll have the right programmes, people, and facilities for this target market. Other gyms would need significant investment and a complete change of culture and focus to attract similar customers.
Create a strategy scorecard
Once you are clear on your strategic objective, you need detail to implement it. Everything you do must line up with your overall goal. Creating a scorecard will help you develop all the projects and targets that will go towards meeting your strategic objective. Then your scorecard will help you track what you do and see how it contributes to your overall objective. You can create your strategy scorecard in three steps.
1. Start with your strategy statement
A scorecard for strategy can work only if you have a clear picture of what you’re trying to achieve. Everything in your scorecard relates to your strategy statement. This statement helps you describe what your business will look like at a set time in the future. If you have already written one, you have a great starting point for your scorecard.
2. Break your strategic objective up and add detail
This stage breaks your strategic objective into more detail in areas that are crucial for your business. For example, if you are a retailer you may be interested in improving your customer service. If you are a charity, you might be interested in community and wellbeing goals. Figuring out your detailed objectives helps you find how to measure progress, set targets and plan projects that help you reach them.
Split your strategy’s overall objective into four categories. Here are some popular categories that could be a good starting point.
- Finances: what financial goals will my strategy help achieve?
- Customers and stakeholders: how well should I be performing to meet their expectations?
- Internal processes: what objectives for systems and processes do I need to meet customer expectations?
- Innovation and learning: what new products or processes do I need to meet my overall objective?
Financial objectives are common for most strategy scorecards, but other areas could differ. If you pick your own categories, make sure they fit your overall strategy. For example, if you want to focus on sustainability you could use that as a category, writing detailed objectives for energy use, waste reduction, and other related topics.
Plan what you’ll do for each category. Everything you do should improve your performance in that category and contribute towards your overall strategic objective. Hinewai in our example above might pick customers as a category, and identify detailed objectives related to:
- ensuring all activities are accessible to people with lower mobility
- catering for customers with poor vision or hearing
- providing transport for those who need help getting to the gym.
Keep the strategy statement and your overall objective at the centre and check how your four categories contribute towards achieving it. Your detailed objectives in each category need to be consistent with each other, and with the objectives in other categories. For example, you might check your financial targets are consistent with your objectives for innovation and learning or community objectives.
Make sure your timelines for these tasks align with your overall objective. Some of your projects could be quick and relatively simple. Others could be more complex projects that take months or years to complete.
3. Set the right targets and measure your progress
The smaller the business, the more areas you generally want to improve. But connecting each detailed objective to your overall strategy helps you focus on the right measures and targets. For example, you might define ‘increased sales over last year’ as one measure for growing your profits, and choose ‘20% by value’ as your target.
When you’re working towards your strategic objective your measures will help you track your progress. For example, you might check against your eventual targets or set a series of milestones along the way.
Create your own strategy scorecard
To create your strategy scorecard, use our template with instructions, tips and examples for each of the steps above. You’ll create a scorecard that expands your strategy statement into the four categories you want to focus on, each with detailed objectives, measures, targets and what you’ll do to meet them.
A scorecard does more than just measure
Once you’ve created your scorecard, you’ll find it useful for more than just tracking your strategy. It’s also a great starting point for communicating change to your team, for planning the investment you might need, and for checking back to see if your strategy is holding up well or needs a review.
Communicating and linking
Scorecards help you make sure everyone understands a strategic objective and how their own actions relate to it. For example, your team may be worried about change, and this worry can often make people resist new responsibilities.
You could draw up a scorecard and talk everyone through it, so you all have the same understanding of the bigger picture. You could also use the scorecard as a prop for talking to each team member individually.
Exploring how their new everyday tasks contribute to the overall strategy helps people see that what they do matters, and helps them understand how they help the business succeed.
Planning your finances
Any strategic objective you pursue is going to have an impact on your finances. Your strategic objective gives some direction to guide your budgeting and how you allocate resources. You’ll need the right people and equipment working towards the objective, and the money to pay for them.
Your objective also helps you set financial targets for revenues, expenses, profits and investments. Look at your financial statements and compare them against your strategy statement and the finance information in your scorecard. Where are your strengths? If you need to address some areas, what would they be?
Use our financial modelling workbook to estimate the future cash flow you would require to meet your strategic goal.
Feedback and learning
You can use a scorecard to get feedback on your strategy and gain new insights about your business. For example, maybe your projects to reduce costs are going well, but your overall costs are still well above your target. This might show you that you’ve missed out other important factors to measure, or that other projects or objectives are conflicting with this one.
Managing change is key to success
Putting a new strategy in place will mean change for your business. When you introduce any change in the business, you can affect your people, processes, systems, business structure, job roles, or a combination of these. Managing change is always hard. As a small business owner you will probably be doing it on your own, without specialists or a big budget. The flip side of this is that you can also react to new opportunities faster than a larger company. And if you find problems with your strategy you can change quickly in response.
Vital steps for successful change in a small business
The most important steps for change management are:
- helping everyone understand the change — agreeing it’s important and urgent so they feel an emotional connection to it, rather than just feeling obliged to take part
- creating a shared vision and collaborative approach — working with your staff rather than commanding them, helping them feel part of the process
- establishing new systems and processes — starting with quick wins to keep up urgency, then scaling up the changes to your business practices
- getting the change to stick — demonstrating how new approaches have improved performance, and ensuring that key people in your team support the change and set a good example.
If you can keep an eye on each of these, you have a good chance of success with your new strategy.