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A Must-Have Skill for Building Your Business Strategy

September 26, 2011

Strategy Concepts

 

Photo from State Library and Archives of Florida

As you might expect, any business strategy process will include a fair bit of research.  It is certainly common that business leaders and staff (or consultants if engaged in this work) will spend the majority of the early stages of strategy development studying, analyzing, assessing (pick your buzz word) various components of the market, your business and the business environment.  With the volume of data collected, someone could create an epic novel or deliver more money.

There is one killer skill that will make the difference between more money due to an excellent business strategy, and that epic novel – a wasted effort.  That skill is the ability to draw concise conclusions.  If you learn and use the technique outlined below and build this skill personally, you’ll avoid a total failure of the strategy creation process.  You will have the integrated action plan that will drive your business forward and bring in the profit.

What is it about Drawing Conclusions?

Having worked for years in strategy development with many business leaders, and had many opportunities to work with and interview strategy consultants, the ability to ‘synthesize data’ or draw conclusions is consistently ranked among the top of skills required to create great strategy.

As discussed in other posts, much of the focus on how to create a strategy is actually around how to create a business plan.  If you need convincing, as of this writing, there are over 3 million monthly Google searches on “how to business plan” versus 300 thousand on “how to business strategy” almost as much as searches for “business plan template”.

The trap of templates is that they can lead the strategy builder to believe that through the completion of the template, a good business strategy will be born.  The entire activity becomes an exercise in collecting data, not analyzing data.

What good strategy needs is the ability to draw conclusions from the data, not just report the data.

Three Simple Steps to Drawing Conclusions from your Data

So, there are three steps that you can take to strengthen your ‘conclusion drawing’ skills.

First, you should find some way to record the important strategic information you collect.  You need to record it in a format that allows you to regularly reference the data, to review the data, and to sort the data.  You can use a spreadsheet, text document, database or even note cards if you prefer the written word.  Why?  Because this information you collect is a cornerstone of your business strategy and it needs to be managed in a way that allows you to reference this information as part of your strategy development.

Second, and most important, use a questioning method to assess the value and application of the information you collect.  The simple way to do this is to ask “So What?” or “What is this telling me?” or “How can I use this information?” when you identify what might be a key bit of market insight.  You need to implement this step, if nothing else.  Challenge each key piece of market (or environment or customer) information that you collect with these questions to really get the essence of that data as it applies to your business.  Do not just take the data at face value, e.g. “Oh, the demographics in our town have shifted toward retirees.”  Ensure you understand that the demographic shift, for example, means that “your key customer segment is declining at a rate that will reduce your sales by 25% over the next 2 years.”

Third, create relationships between key pieces of insight/information.  If your first step is well done, you will have a format that also allows you to tag your information to create common associations.  These tags could be things like “supplier” or “customer” or “government” or “competition”.  Identify what potential commonalities within your business environment the information is addressing.

In the early stages of using these techniques, you may struggle settling on the “So What?”.  Allow this struggle to reinforce for you the importance of continuing the pursuit of the conclusions.

Take Action

To ensure the success of your business strategy, right now, create a system to record important new strategic information.  If you prefer electronic tools, make a spreadsheet or check out my preferred mind mapping tool on the Resources page; if you prefer the more tangible systems, start using note cards.  Don’t let your critical business insight pile-up unused or slip away, lost forever.

 

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