Welcome to the third episode of the Leaders In Strategy Podcast, where Mike Harris tackles the fundamental question – ‘What Influences A Strategy?’ Join him as he dives into the key factors that will shape your strategy which will be built upon in future blogs.
Written by Mike Harris, managing director at Strategus Consulting
Introduction
Hello & welcome back to all you Leaders In Strategy. I’m Mike Harris and this is episode three of my blog, which I am calling ‘What Influences A Strategy?’ In other words, what are the key factors that will affect your strategy, and to be honest there are a lot of them.
I am an experienced leadership consultant, and most of what I do is through workshops, seminars, and coaching.
Last year, I decided to widen our reach and help a new audience, and someone suggested doing a blog. So here we are, and each episode will cover a different subject related to leadership & strategy. I will share insights from my successful workshops & seminars & hopefully you will gain a different perspective and some helpful insights.
Everything I look at is through the lens of strategy. For some of you this will be new and for others this will act as a refresher. It will help sharpen the skills that you already have. Hopefully this will remind you of what is currently affecting your business and therefore should be considered when looking at a strategy.
What Influences A Strategy?
As I said above there are a lot of factors affecting your strategy. It could be the economic climate, the political landscape, social changes, new technology, legislation, compliance issues but you’ll be really pleased to know I’m not going to talk about any of those. I’m not saying they’re not important but generally we can’t influence them.
So, when putting together your strategy, it’s really important to focus on the things that you can influence. Those things that are closer to home, which will have a direct impact on the outcome of your strategy.
This is not an exhaustive list, but these are the ones that I most commonly come across when meeting with clients.
I always split these influences into external factors and internal factors. Here are 10 examples of each.
External factors
- Your customers. Understanding your customers, their needs, and their value to your business is crucial for success. Do you know which customers generate repeat business and the most profit? What about the ones who are the most enjoyable to work with? It’s essential to delve into these aspects to tailor your strategies effectively.
- Your customers’ requirements. It’s really important to understand their individual & collective requirements. These may be articulated, inferred or they may be silent. Do you know them? If not, you may have to work them out. Or perhaps you can ask them.
- Other stakeholders. It’s vital to consider other stakeholders like parent companies, investors, and the local community. Their involvement can significantly impact your business direction and decisions.
- The markets you operate in. Market dynamics play a significant role in shaping your strategy. Whether there is a boom or a slowdown in the markets you operate in, it’s crucial to adapt and adjust your approach accordingly.
- Your competition, both current and potential, is a key factor to consider. Anticipating future entrants in your markets or exploring new markets yourself requires a thorough understanding of the competitive landscape.
- The Supply Chain, including your suppliers, is equally important. Assess if your current suppliers align with your strategic goals or if you need to explore new partnerships to enhance capabilities and capacity.
- Where you sit in the supply chain. You may feel you are low down, feeding into lots of companies. Maybe you want to move your way up the supply chain so that you are more control of the market you are in & and have more influence over what you are doing.
- Relationships within your industry is essential. Not just the ones that you have, which I will cover later, but also the connections your clients and suppliers have with your competitors. If they’re really strong, they might be working against you. Strong relationships in the market can either support or challenge your business objectives.
- Obstacles and challenges that you face & you have to deal with in order to make your strategy a success. Identifying them early and putting in place counter measures is one of the most important aspects of any strategy. We will be covering this in detail in a future episode.
- Available resources. As you plan for growth, evaluating resources available in the marketplace is critical. The availability of skilled professionals can either facilitate or limit your expansion plans.
Internal factors
- Your competitive advantage. In other words, how you differentiate yourselves from your competition based on your company strengths. What your customers like & want to buy from you. It’s what sets you apart. Again, we will be covering this in detail in future episodes.
- Your experiences. Whenever you look at a strategy it’s important to draw upon both company-wide and individual experiences for strategic insights.
- Your strengths and weaknesses. Look at what you are good at as a business and what needs improving. When you do this it’s essential that you’re honest. I see a lot of people convince themselves they’ve got 20 strengths and but only 3 weaknesses. Or they’re really pessimistic and they’ve got 20 weaknesses but can only think of 3 strengths. Make sure you’re balanced. That you have roughly the same number of strengths and weaknesses. Be honest about what you excel at and areas for improvement.
- Available resources. I spoke earlier about resources available in the marketplace but also look at the resources you already have in the business. Assess the skills and capabilities needed for your strategy.
- Your structure. Is it fit for purpose for the business that you want to become? Ensure your business structure aligns with your future goals.
- Your location. Consider if your current location meets your business needs. Maybe that you need multiple offices, or you need to move offices
- Your premises. Evaluate if your current premises are suitable for future growth. You may need to change if they are not going to be suitable or big enough.
- Your pricing structure. Ensure your pricing structure reflects where you want to be as a business moving forward. I’m not just talking about the fact that your prices may need to go up or down, but also that your pricing structure might not be relevant to the work that you want to be doing in the future. So, you may need to a create a new pricing structure. Review and adapt your pricing to reflect your business direction.
- Stakeholder strategies. I mentioned earlier about stakeholders. if you have stakeholders, understand how their strategies impact your own.
- Your Relationships. The business and the people in the business have lots of relationships. Make sure you use these to get the best you can for the business. Think about how you maximise your relationships when putting together the strategy for the business. Leverage business relationships to optimize your strategy.
In summary
In looking at the factors affecting a strategy focus on the things that you can influence, the things that will have a direct impact on your business strategy. Split it down between external and internal factors. My top five for each are:
External Factors
- The customer
- Other stakeholders
- Competition
- Obstacles and challenges
- Others’ Relationships
Internal Factors
- Your Competitive Advantage
- Experience
- Strengths & Weaknesses
- Available resources
- Your relationships
Homework
As you know, I like to set some homework, so think about those factors which affect the strategy in your business. Split them between external and internal. Maybe not all of mine apply but equally I may have missed some that are really important to you. Don’t just go with the list I’ve given you, think about others that might be applicable
I’m eager to hear from you! Share your insights on the factors driving your business & strategy. Connect via email at sale.enquiry@strategusconsulting.co.uk or reach out to me on LinkedIn.
Episode four
I hope you enjoyed this blog, and I’ll see you here for our next episode, which is based on a reader’s suggestion & is called ‘What makes a successful strategy?’
About the author
Mike Harris is an experienced business leader and founder & lead consultant at Strategus Consulting. With 40 years of experience, Mike offers a unique opportunity for readers to learn and grow as strategic leaders. He is also the host of the Leaders In Strategy Podcast, which can be found on Podbean, Spotify, Amazon Music, Apple Podcast and YouTube.
The Leaders in strategy blog is brought to you by Strategus Consulting, a management consultancy that works with organizations and individuals to achieve their ambitions by focusing on their strategic plans and providing leadership, guidance & support.