One of the big conceptual foundations of strategy is what I like to call your business identity.
This is what makes your business different from all others: what you want, what you do well, how you do things and what makes you unique.
What You Want
It starts with what you (as the owner of the business) want for your company. Define success for yourself. It isn’t always a matter of market share, sales growth, profitability and return on investment, although those concepts are always nice. In many cases it’s about living well, or living better. Having more time with the kids. Coaching soccer. And sometimes it’s about being right. Showing that something can be done. A lot of times it’s about doing what you want and making money at it. It helps to think this through. You can’t get to your destination if you aren’t sure where you’re going.
There are several levels of goals in business planning. Use one or more of them to define your identity:
- The mantra: This is a simple sentence or phrase describing what you do. Guy Kawasaki has a nice treatment of mantra in his book The Art of The Start, and he’s made an excerpt of that available for download.
- The mission statement: Too bad it’s usually just empty hype. A good mission statement actually defines what your company wants to do for its customers, for its employees and for its owners. That can be useful.
- Business objectives: These are specific, concrete, measurable goals, like sales levels, growth rates, units, profit percentage, gross margin percentages, customers served and so on. If it isn’t measurable, then it shouldn’t be there.
- The vision: This is a dream for the future. Project yourself forward into time, say three or five years, and describe what you want to see for your company.
What You Are
Then there is that sense of looking in the mirror, as a company, recognizing what your company really is. This includes:
- Core competencies: What are you really good at? What do you do better than anybody else?
- Keys to success: They are different for every company. It doesn’t really go by industry, either; one company’s key to success is better parking, another’s is better food, another’s is better service. Or lowering costs. Or more repeat business. Or better marketing.
- Strengths and weaknesses: The top part of a good SWOT analysis, the nature of your company. Be honest. First identify strengths and weaknesses, and later you can build strategy based on them: Work toward the strengths and away from the weaknesses.