The strategy for a business defines the scope of product and market the business would pursue. They in turn determine the capabilities required for execution. The business environment is dynamic; opportunities are vast and unanticipated changes could arise any time. A business could steer off course when its strategy is not clear. An opportunity could entice the company to take a chance. This problem is more pronounced with start-ups that are anxious to build revenue and traction in the marketplace.
Start-ups tend to put less vigor into assessing an opportunity when it is pressed for cash. To avoid going off course, there are a few things worth doing:
- Have a clear value proposition for what the business offers—this describes the benefits customers enjoy in consuming the product(s). Clear value proposition is unambiguous and it identifies how customers are better off.
- Be specific with the core products it offers—the list of products or lines of products must align with the value proposition. The list is clearly defined so that any new opportunities that don’t fit won’t be considered.
- Be specific with the markets it serves—the market segments where the products best fulfill the value proposition define the characteristics of the products. A change in the markets could have significant implications on the products.
- Have intimate knowledge of what capabilities are critical to success—the capabilities required tend to place constraints on how well a business fulfils its value proposition. These capabilities include people, technology, methodology, finance, legal, and operations. A solid understanding of the interdependency of these capabilities helps to quickly assess the viability of pursuing an opportunity.
The value proposition, products, markets, and capabilities define the playing field for a business. When a threat or opportunity arises, the company would go through the four areas and assess whether there is a fit. This minimizes the risk of making decisions based on gut feel or flavour of the day. Perhaps the most important step is to have the above information posted somewhere so that it is easily accessible. That way, anyone could refer to them when in doubt. Staying the course is critical as lost time and poorly invested resources are detrimental to success.
© Connie Siu 2013. All rights reserved.