Businesses have to be nimble enough to adapt to a changing marketplace, but having a laser focus on your strategy will keep you on the right path. Before you get too heads down, run a strategy test to make sure it’s the right one. Companies often want to adopt fresh strategies that are the leading edge of new discoveries. Yet, if they wait to find out if a profit is being made or not, to determine the efficacy of a strategy, the leading edge can cut your bottom line. Instead, here’s how to tell ahead of time if your strategy is a winner with these five tests. Strategies that yield results can always be optimized and those that fail should be excluded quickly. However, the only way to differentiate what is and isn’t working is to evaluate your strategy.
5 Strategy Tests To Evaluate Your Business
1. The Competitive Review – Does It Express your Competitive Edge? Instead of just having a good hunch here, you want to really do a competitive analysis. How are your competitors positioned in the marketplace and how does your strategy differentiate your products and services?
2. The Customer Review – What Do Your Customers Think? Some of the best new strategies are a development of customer surveys. By getting regular feedback from your customers, you not only can tap into their needs better, but you also have access to their bright ideas. You can even offer a discount for a product or service you’re thinking of implementing and thus figure out what the demand is before you launch a new strategy in the marketplace. If there isn’t enough demand, or buzz is low, just cancel the launch. If they’re not willing to promote it or get behind an idea, it’s probably a bad idea.
3. Organizational Buy-In – Does It Fit Your Company Culture? A successful strategy works best when you get buy-in from all employees essentially implementing your strategy. If there is a joint creation on the strategy with key internal stakeholders then you’ll have a higher adherence to your company’s direction with stellar results.
4. Profitability – Does It Look Profitable on Paper Now? – A business plan can help determine your business strategy and its profitability. However, when it comes time to implementation, you’ll want to keep a closer eye on the actual results. Make sure you’re tracking receivables in a steady fashion and looking at trends that are positively or negatively impacting your projections. Then, change your strategy when necessary, before you’ve committed too much time and energy in a path that isn’t yielding success.
5. Simplicity – Is It Easy to Adopt and Implement? A good strategy should be simple enough for a 8th grader to understand. That makes it easy to implement and get buy-in. It also should be easy to track the metrics so that you can determine as the strategy is implemented, whether it is producing the results you want.
Keep Your Eye on the Ball
In the end, a good strategy should be self-evident. In other words, it shouldn’t have to be hard to explain, it should be profitable, and everyone from customers to managers and employees should be on board. It should also be clever enough that it sets you apart from your competition and is the driving force to a data-driven, insightful, change in the way you do propel your business.
Find more helpful ways to know if your company’s strategy is working in Ruthless Focus. Read more than a dozen big brand company examples of successful strategies.
