The strategy of a company and business is a complex subject. Every manager has a different approach. In this article, I want to share my thoughts on this topic.

Every situation is unique

I want to start with the fact that every company is unique, and in each particular situation, the focus in defining the strategy may change according to the problem.

My points are mainly related to large corporations rather than startups. Although I have considerable experience working in both, such strategies are more applicable to well-established companies than new ones.

So keep in mind all mentioned above and don’t blindly copy my or any other approach.

How do I see the outline of the strategy?

1. WTF is going on

• Finding the main challenge of the business
• What is the current state of the market?
• Who are the customers?

2. SWOT analysis

3. What is our biggest and most important goal? BHAG.

4. And based on the previous points:

• What results will we have in 3 years?
• General principles we need to follow
• The budget
• Apply the 80/20 rule in the next 12 months of work
• What are the risks?
• What kind of team do we need?

WTF is going on?

The most crucial task is figuring out what is happening in the business. What problem are we solving? Why this problem? Does everyone see the challenge that needs to be addressed in the same way? To answer these questions, you need to talk to as many people as possible: executives, employees of your and other teams, customers, and also product, finance, IT, and legal teams.

I usually have one-on-one sessions with people and ask the following questions:

1. What are the significant problems you think we need to solve with the help of business direction/ new product development/ transformation strategy, etc.?
2. What is the most pressing problem? Why?
3. If we solve these problems, what kind of future will we have? What’s good about it?

During every such meeting, I take detailed notes and write down the problems and challenges that came up during the conversation. The resulting list of difficulties I then rank by importance.

The next thing that needs to be done is to analyze the current state of the market. If necessary, I look for or buy reports, talk to the experts I know, and read analytics, articles and news.

Is the market we want to operate in, growing? Are there a lot of competitors? What are they focusing on? Is there any room for a new player? What are the new things we can offer? What realistic position can we take on the market in 3–5 years?

The following question we need to answer is, who are our customers? I used Customer Development for this some time ago, but recently I switched to JTBD (Jobs To Be Done). Here you need to conduct a few dozen interviews with consumers to:

1. Find the Jobs that are relevant to our customers,
2. Understand how our products are already covering the current needs of our customers,
3. Identify the problems of our products through the eyes of our customers,
4. Rank the Jobs found and possible solutions by customer pain points (what “hurts” the most).

Our dear SWOT-analysis

At the end of the first phase, it will be great to put all our findings on the SWOT matrix to better understand our opportunities and limitations.

When developing a strategy, it’s important to focus on the results but also to consider the obstacles that stand in our way to greater achievements. Do we have powerful strengths? Whether organizational, market or any other.

Big Hairy Audacious Goal (BHAG)

By this point, you will gradually understand what this is all about. You will know what you’re strategizing for. This is where strategy turns into a goal.

This goal must motivate the whole team and be a target for the next few years.

For example:

• At least 20% of all secondary real estate sales in Portugal are made through our company,
• The new direction of business will bring at least 30% of the revenue of the entire company,
• Our services will be used by more than 10 million customers.

No need to set the goals on purpose. They will form during the first phase of our strategic thinking. Besides, your objectives need to be ambitious. Dream big!

Elaborating the strategy

At this point, we can begin to make our strategy more elaborate. This is how my thinking process goes:

What results will we have in 3 years? We need to start with the result. What will we get? What is our future like?

General principles we need to follow. How are we making the future come true? What do we need to do? What are the most crucial problems we need to address?

The 80/20 rule in the next 12 months of work. What will we do in the first year? What results do we expect?

What are the risks? What can go wrong? How do we prepare for it?

What’s the budget? What is our financial model? What are our revenues and expenses? What about the drivers?

What kind of team do we need? Who do we need to hire? And when do we need to hire them? What competencies do we need? What tasks will we outsource, and what will we develop in-house?