Know Where You Are Going?
Organizational strategy is concerned with envisioning a future for your family business, creating value in the eyes of your customers, and building and sustaining a strong position in the marketplace.
"As a result of the current market conditions, continued success for many family businesses will be determined by how they can adapt to change - and to be able to do it quickly," according to leading family business expert
Schwerzler has been studying and advising family business entrepreneurs for more than 40 years and he is the founder of the Atlanta-based
Family Business Institute.
"As we work with our family business clients, assessing their organizational strategy is an important part of our
succession management strategy
- we consider organizational strategy in terms of four key components, each with critical elements."
Organizational Strategy - Vision, Mission, Competitive Advantage
The first critical strategy element is Vision, Mission and Competitive Advantage, which describe the business a company is in, it's current and long term market objectives and the manner in which it differentiates itself from the competition.
- Focused Purpose
- Clearly defining short-term purpose
- Ensuring mission is realistic
- Serving the best interests of all stakeholders
- Defining a point of differentiation
- Future Perspective
- Clearly defining long-term outlook
- Appealing to the long-term interests of the company's stakeholders
- Providing a foundation for decision-making
- Strategic Advantage
- Competitive advantage is a key driver to forming an organizational strategy
- Competitive advantage is clearly understood by all stakeholders
- Employees clearly understand how their role supports the company's organizational strategy
160 Key Business Questions will help you to focus on organizational strategy - external and internal
Organizational Strategy - External Assessment
A second key strategy element is External Assessment, which reflects an organization's approach to gathering and analyzing essential market data. Included in this data are developing competitive profiles, studying macro and micro economic information, identifying industry opportunities and threats, and understanding what it takes to be successful in a given market.
- Customer Profile
- Clearly defining reasons why customers buy products or services
- Clearly defining benefits that customers seek
- Clearly defining reasons why customers would not buy products or services
- Assessing customer bargaining power
- Knowing customer preferred choice of distribution channel
- Industry and Competitive Analysis Is Essential Component of Organizational Strategy
- Identifying primary competitors
- Identifying potential and indirect competitors
- Clearly defining strengths, weaknesses and strategies of competitors
- Assessing the threat of substitute products or services or new entrants into the marketplace
- Understanding what it takes to be successful in a given market
- Comparing customer growth rate with industry standards
- Ongoing market evaluation process
- Environmental Assessment
- Defining and clarifying regulatory requirements
- Assessing vulnerability to adverse business cycles
- Summarizing opportunities and threats due to:
- Economic conditions
- New technology
- Demographic structure
- Legal or political events
- The natural environment
- Socio-cultural norms
- Key Success Factors Are Identified With a Critical Thinking Process
- Implementing a critical thinking process
- Clearly measuring competitive intensity
- Clearly defining product or service demand within your market
- Clearly defining drivers to success within your industry
- Consistently monitoring key influences within your industry
Organizational Strategy - Internal Assessment
Internal Assessment is the key strategy element that reflects the company's ability to objectively evaluate its own strengths and weaknesses. This would include evaluating the company's management processes and how effectively it utilizes a "value chain" analysis approach. (Value Chain components are Research & Development, Production, Marketing, Sales and Customer Service)
- Adequate funding of key initiatives
- Utilizing a comprehensive pricing model
- Consistently performing within a range of financial goals
- Having a targeted long-range financial plan
- Employing a "Cost / Benefit" approach to resource allocation
- Financial plan allowing for economic or environmental disruption
- Financial plan allows for flexibility
- Employing the "If / Then" model when forming organizational strategy
- Research and Development
- Fully integrating all appropriate departments with R&D
- Maintaining a creative and innovative process
- Ensuring R&D has all required resources to successfully fulfill its function
- Fully integrating all departments to support production
- Strategic partners consistently fulfill production commitments
- Production process is cost-effective
- Production process is flexible, fast and responsive
- Coordinating all departments to support marketing
- Having a clearly defined marketing plan
- Branding plays a critical role
- Utilizing a marketing system or database to track customer and market information
- Employing an effective product / service management process
- "Competitive advantage" is a key driver for all marketing decisions
- Employees take pride in the ability to promote products and services
- Monitoring the ROI of all marketing campaigns
- Sales / Distribution
- Consistently achieving sales goals
- Ensuring that sales teams / channels possess required skills to achieve plan
- Ensuring that sales teams / channels are provided with the necessary information to achieve their goals
- Employing a well-defined sales management process
- Coordinating all departments to support our sales process
- Tracking sales activity from lead generation through close
- Does Your Organizational Strategy Emphasize Customer Service?
- Clearly defining customer service standards
- Meeting or exceeding customer expectations
- Measuring customer satisfaction
- Managers and employees share a high commitment to achieving customer loyalty
- Maintaining a customer relationship management system that provides critical service information to make the best decision
- Maintaining a high rate of repeat business, customer loyalty and referrals
Organizational Strategy - Objectives, Initiatives and Goals
Objectives, Initiatives and Goals are the final element of organizational strategy and illustrate a company's ability to articulate what it wants to accomplish, how it will do it, and when it will be achieved. Included in this process are defining direction, aligning financial and human resources, instilling accountability and determining critical measurements.
- Organization Strategy Needs Vital Direction
- Identifying key strategic objectives
- Prioritizing action items by their importance to strategic intent
- Ensuring objectives are quantifiable and measurable
- Those responsible for implementation participate in the strategic planning process
- Plans must specify how each area will contribute to achieving strategic plan
- Resource Alignment
- Allocating sufficient resources to achieve strategic intent
- Clearly defining resources necessary for each objective
- Evaluatiing individual or group capacity prior to assigning workload
- Organization Accountabilities
- Ensuring that employees understand how their roles and responsibilities relate to strategic objectives
- Holding individuals accountable for their work
- Employee goals reflect accountabilities and timeliness
- Employing an internal system to routinely review the status of key objectives
- Measuring key financial indicators
- Utilizing a uniform format to measure and report performance
For many, the most important concern for family business owners will be survival and not succession. The question for family business owners – “How will we best shape the future of our business?”
Family Business Strategic Planning
The answer to that question can then determine the organizational strategy needed to make the future vision for the family’s business a reality.
A good first step to the internal discussions about the future of the family's business is to consider engaging an objective business expert, one who understands family business dynamics, to join in the discussions about the future of the family's business.
If your family business is having problems with business strategies or problematic family relationships that are hurting the business, we can help. Use the ASK THE EXPERT form at the bottom of this page to get help!
"WITHOUT A GOOD QUESTION A GOOD ANSWER HAS NO PLACE TO GO..."
Chaos Busters - The Management Guide
Identifies 160 Key Business Questions
160 Key Business Questions are the keys to unlock the hidden potential of your organization!
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