Have you wondered why despite huge investments most of the businesses tend to fail? Yes, I am sure you have. And yet there are some that are able to scale heights, without much investments… What is the link here… that ensures that businesses fail or succeed? What are we missing here…? Strategy is the missing link here or rather business strategy is the term we are seeking. But what is business strategy and why is it important for businesses to grow and develop? Business strategy may be defined as the course of action or set of decisions, which assist the entrepreneurs in achieving specific business objectives. In other words, … Business strategy is the crux of any business. Without it your business may rise up to certain level but then it will never be able to attain a perfect ‘hockey’ stick that shows overall growth. Reason… A right strategy helps you formulate your mission, strengthens your vision and helps you in achieve your organizational goals. But how do you ensure that you are formulating the right strategy? Well… a good business strategy framework should align with your organization’s Mission – explains the purpose of an organization vision – focuses on future growth and development goals – are the objectives that an organization aims to achieve Why your business strategic framework should align with your organization’s mission, vision, and goal? Because… as stated earlier a helps in business performance and ensures there is a steady growth over the years. business strategy Before you formulate a business strategy framework remember that it will always have these four components. Business objective Approach towards goals, and objectives Measurement of achievements – the process Target audience While these components alone will not ensure organization’s success, they will form a strong base on which you will build your support system for an implementation of successful business strategy framework. So from where does the strategy framework evolves…? A evolves from the organization itself. It evolves from the need to adapt, adopt and evolve as a business in the competitive market. With a business strategic framework in place, you can steer your organization in the right direction with right information at the right information. business strategy framework The importance of business strategy framework – Tesco’s case study Tesco, a PLC British-based international grocery and general merchandising retail group is one of the third-largest retailers globally as measured by profits. Tesco, with its more than 6,500 stores and 475,000 employees, developed a strategic performance management framework called the ‘Corporate Steering Wheel.’ This performance framework proved to be a powerful tool to align everyone with a single corporate vision. It also allows organizations to ensure the strategy delivery is monitored and managed. Though the important thing to consider here was that these frameworks should be live documents, which are revised on a regular basis and kept up-dated so as to reflect the business’ changing nature. In other words, … … when the strategic priorities change, the need to change as well... strategic performance framework When Tesco proposed its Steering Wheel – it had four perspectives: Finance Customer Operations People And each of these perspectives had specific number of goals that highlighted the priorities for the business at a particular point in time. If you see the figure, you will know that each of the perspectives has different number of goals. Keeping the Strategic Performance Framework dynamic and evolving Over the years, Tesco has been able to keep its Steering Wheel in line with a shift in its strategic objectives. The major changes to be added to the current Steering Wheel was to add a fifth perspective. Realizing the importance of issues like climate change and its impact on the local community are important challenges that required strong strategic focus. The Steering Wheel with the new Community perspective had two important goals: Be responsible, fair and honest Be a good neighbor These two new goals led to: Reduced use of carrier bags by 50% More locally-sourced products Reduction in carbon footprint Along with this the new Operations perspective contained had revised goals like: Get it right first time Consistent delivery every day Jobs made easy for employees Employees know the importance of their jobs Organization save time and money So what it means is that… If an organization wants to keep its performance framework fresh, then it needs to regularly update not just the individual goals but the entire perspectives. Usually the organizations develop strong performance framework, however, they fail to update it to reflect changes in their strategy and thus fall flat. Don’t do that mistake and keep your strategic performance framework updated to ensure a hockey stick growth in your organization.
