Top 10 habits of successful business owners – set clear strategy
“Strategy is about making choices, trade-offs; It’s about deliberately choosing to be different.” – Michael Porter
Successful business owners know the importance of setting clear goals and how to achieve them, aka strategy! They set clear strategy because they are agile, close to the customer, bold and not afraid to accentuate what makes them different.
The understand that the essence of good strategy is to leverage whatever resource they have in front of them now, while aligning everyone in the company behind the strategy. Dodging and weaving as they go, they don’t wait for a perfect 50 page document, rather they get their ideas into the market as quickly as possible for validation or rejection. When they get a hit, they run with it and plow resources into the greatest opportunity.
Successful business owners set strategies to dominate their sector, not just compete. It becomes a mindset, an approach, not a boring corporate document.
Successful business owners have developed the habit of being strategic thinkers, without over thinking, while being great on execution, without being hasty. They know good strategy leverages the existing strengths of the business, makes them different in the market place, creates values and is simple.
Leveraging Strength: Even the smallest business has some strength that can be leveraged in a unique way; its location, a unique product or service, the way it connects with a customer, customer experience or some unique talent in its staff. Don’t reinvent the wheel, work with what you have.
Be Different: Successful business owners know to avoid the commodity trap or competitive pricing and low margins. If customers cannot tell the difference between you and the competitor, they will not pay a difference and you will trade at commodity levels. While low cost can be a good strategy, be prepared with great execution, exceptional systems and the ability to scale. Accentuate what makes you unique, or even peculiar. Stick out, get attention, and fight through the noise so people remember you.
Create Value: Good strategy creates value, and successful business owners know that value creation is the essence of business. This starts with a decision on how to make the customer experience better and how to do it at the lowest price and highest quality. In other words, starting with value creation for the customer and then figuring out how to deliver, not the other way around.
Simple: Successful business owners know that good strategy is usually simple, and can normally be explained to a new employee in one sentence. For instance, it can be response time, value added services, freemium business model, logistics or product delivery, customization, or anything else that is easy to execute around.
Building strategy can be as simple or as complex as you like. At its most basic level, I normally recommend companies at least have the following four elements in a strategic plan: precisely and clear known, well documented, communicated to key stakeholders, and supported by culture and actions of the organization.
For most companies, a simple planning exercise, will help put together a great approach to understanding the market sector, creating significant value and leveraging their hard-earned strengths to win and dominate the sector.
Eamonn has a B. Eng. (Electrical) from Lakehead University, MBA (Finance) from University of Toronto, and has completed Executive Education at Stanford University Graduate School of Business. He lives in Vancouver, Canada. Follow him on twitter @EamonnPercy.