How To Manage Your Business Model

The New Year is here and it’s time to roll out your strategy for the coming year. We started last year by looking at organizational leadership. This year we’ll look at how leaders lead by weaving strategy into their business.  How is this done?  By using your vision, your end-to-end process design, and the action steps required to make it all happen.

Strategy Starts with a Vision

First we need a vision. Without a vision you can’t have a strategy, which is what transforms objectives into results. The vision is the target. Your vision answers the question “How should we view the organization five to ten years in the future?�  The “we� includes everyone in your organization.  Everyone involved must be able to see the organization in the future and agree that this is the direction we want to go.

To find your vision ask yourself a few strategic questions:

• Who are the stakeholders and customers today and tomorrow?
• What do they want today and tomorrow?
• When do they want it?
• What choices do they have today and tomorrow?
• What must we do to satisfy them today and tomorrow?
• Who will be responsible for these actions?
• How much will it cost?

The answers to strategic questions like these can provide you with some ideas about what the future looks like. Your vision is now forming.  Don’t worry if it is not crystal clear yet; we have some time to clarify it before we’re done.

Strategy Evolves from Your SWOT

SWOT stands for Strengths, Weaknesses, Opportunities and Threats.  These are comprised of various internal and external pluses and minuses.  What is good and bad about your company, employees, products, markets, industry, or country you operate within?

Your strengths and weaknesses are about you — your internal issues.  What are you good or bad at?  Where does your profit come from and where do you lose money?  Answers to these questions begin to form a basis for your strategies.

Next, you should examine your opportunities and threats.  These come from the outside.  What is the trend within your industry?  Are regulations increasing or decreasing (hint: government laws, like taxes, generally increase over time)?  What is the competitive threat?  How is quality changing your industry? 

Answers to these questions help with both strategy and vision.  By now your strategy should be getting clearer, but we are not done yet. 

Next week we will look at your business model through your end-to-end process design to begin to develop a sense of scope or scale for your vision.  Using this scale, your SWOT and your answers to the strategic questions will provide you with the vision or direction for your venture.

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Posted on Wednesday, January 10th, 2007 under Business Management & Operations