Running a business without an eye toward strategic direction is liking setting out on a road trip to an unfamiliar place without a map or a navigation app. You may eventually reach your destination, but the journey will be chaotic, and you'll most likely waste more effort than necessary. Developing a solid strategy that outlines your company direction will help you to increase profitability while making your day-to-day work less stressful.
TL;DR (Too Long; Didn't Read)
Strategic direction is an approach to planning that includes setting and synching short-term, medium-term and long-term goals.
How to Set a Strategic Direction
The importance of strategic direction lies in its capacity to orient your company's overall purpose. Consider your vision, or your big-picture reason for wanting to be in business. This can be as ethereal as wanting to make the world a better place or as practical as wanting to earn as much money as possible while making the least possible effort. Your vision should embody the "why" behind your venture
Next, consider your company's mission, or the tangible way you will make your vision into a reality. Your mission statement will likely include some specifics about your products and services. For example, an auto mechanic might articulate a mission to keep its customers' cars safe and mechanically sound, and a fair-trade importer might adopt a mission to improve the quality of life for indigenous artisans by paying fair prices for their offerings. Your mission is the "what" to your vision's "why."
Setting Periodic Goals
- Long-term goals. By thinking through where you want to be far down the line, you'll be able to make shorter-term plans aimed at taking you in the direction you've defined. Long-term goals should be practical, big-picture steps aimed at moving you toward achieving your mission and fulfilling your vision.
- Medium-term goals. These are objectives that cover a time frame of approximately two to three years, long enough to be broad and meaningful but short enough for you to actually be able to get specific about possible outcomes. Medium-term goals connect the scope of long-term plans with the concrete details of shorter-term steps.
- Short-term goals. The process of setting short-term goals breaks your longer-term planning into achievable, manageable steps. Short-term goals should take into account short-term needs such as having to meet your rent and payroll. They should also be crafted with an eye toward long-term objectives.
Setting Quantifiable Goals
When setting goals, frame your objectives in terms that will be easy to measure. It's far more useful to say that you plan to increase your gross sales by 20% over the next year than to say that you plan to grow significantly. The more specific you are about goals, the easier it will be to see what you need to do to achieve them and to measure your success through each stage of the process.
If you don't meet the specific targets that you have set, this does not necessarily mean that you have failed. If you fall short by just a small margin, you probably just need to do some tinkering with your business model. If you are nowhere near your target, you may need to make some more major adjustments to your operations.
Keep in mind that the issue may be the goals themselves rather than your work toward achieving them. Circumstances change, and sometimes variables appear that you couldn't possibly have anticipated, such as the introduction of an especially savvy new competitor or a brilliant new technology. In that case, it is prudent to re-evaluate your goals and set new objectives that keep the current situation aligned with your strategic direction.
Devra Gartenstein founded her first food business in 1987. In 2013 she transformed her most recent venture, a farmers market concession and catering company, into a worker-owned cooperative. She does one-on-one mentoring and consulting focused on entrepreneurship and practical business skills.