To Win Strategy Is Fundamental

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Information about To Win Strategy Is Fundamental
Business & Mgmt

Published on July 14, 2009

Author: tomstocker

Source: slideshare.net

Description

Financial statements are lagging indicators, the score. Strategy is the guiding light for everyy winner; business, athelete or team.

To Win, Strategy is Fundamental by R. Thomas Stocker Your financial statements financial results to measure their are the most important effectiveness. This proactive approach allows measure of the success of them to anticipate when conditions change your business. and make necessary adjustments to their Unfortunately you can’t tactics in order to reach their strategic goals. run your business on just Those that are good at the process don’t wait financial statements for their financial results. They keep moving because they are a lagging forward and use the results as an affirmation indicator. Getting timely financial statements of their progress. is very important, but your financial statements are still only the score. You can’t Unfortunately, a very disturbing fact is not all change them; only react to what already companies have them. The less sophisticated happened. or informal your company is, the less likely you use strategic planning. And even if you Your financial statements should be the do have a plan, is it written down, how often indicator that confirms what you already is it used, updated, shared or followed? I see know. Having and using a strategic plan is many business and strategic plans in my work. more important to driving your business, Unfortunately, many are done poorly. Many especially in the current economic are more tactical than strategy, unclear and the environment. What makes your strategic plan financial projections, (if there are any); don’t so important is that it is the roadmap vital for reflect the same results as the words. you to reach your goals and it reduces business risk; very important to you and Not having a strategic plan is analogous to outsiders alike. jumping in your car to go somewhere far away you’ve never heard of before without Consider this; you see strategies unfold in consulting a map, planning a route or even every sporting event you watch. The teams taking a map or GPS with you. (And if you that win the most are the best prepared. You are a guy, you WON’T ask for directions will not find a team in a championship game along the way). It would be a whole lot that hasn’t spent countless hours building their easier, faster and cheaper if you planned first game plan beforehand. They didn’t get there and took a map or GPS with you. by chance. They are able to anticipate and adjust to conditions that affect their planned You probably built a business plan when you tactics as the game progresses. Obviously the first started your business to get funding or team with the best execution of their planned because an advisor suggested you needed to. tactics wins. You may not have thought about the internal benefits it provided, but it helped focus your Like the best professional sports teams, “A” thinking about what you wanted to do and companies of all sizes use strategic planning what the results would look like for the next as part of their normal business process. They three years or so. It helped you prioritize and actively use and update their strategic plans to provided a basis to measure your success. I build annual tactical plans and use their suspect as you started executing, whether you 10 Larkspur Road, East Greenwich, RI 02818 401-451-9799 www.boardroomadvisorygroup.com

looked at your plan again or not, it and future plans only make that outsider more subconsciously influenced your actions as comfortable that internal business risk is under conditions changed or progress didn’t happen control. But if the outsider is someone not as you would have liked. familiar with you or your business, your strategic plan becomes significantly more Recently, there has been a fundamental shift important for them to understand your in outsiders’ perspectives on what is most thinking and to trust your ability. important in order to understand how healthy and risky your business is, whether you are Internally, strategic plans will help make your talking about your banker, investor, potential business stronger and your personal workload acquirer, vendor or customer. They all want significantly easier. When your employees to know how risky your business is. Until are part of the planning process they September 2008 strategic plans rarely understand the roadmap and goal. As a result emerged in the top five evaluation factors. they can help devise the tactics to reach the Since that time a new order has emerged. goal and can help make new or additional Comfort with the management team is now at goals that can enhance your company’s value. the very top, followed by the strategic Unfortunately, this is a ready, willing and able business plan. resource many private business owners do not take advantage of. (If you do not have these What does this mean to you? A lot. resources, that is a serious and different Confidence in your management team is problem). important for obvious reasons. Have they been through a downturn before and what Whether you don’t have a strategic plan, have were the results? Does the outsider know and one that is out of date or keep it under lock trust them? What is the team’s plan to drive and key, reconsider that decision. You are the the business forward? Is the plan credible? coach and owner, and like professional sports teams, a coach without a plan can’t prepare, If the outsider evaluating you believes in your won’t attract top talent, build a winning team team and that you were on the right track and can’t win. The score will always reflect financially before this recession, your current that To join our email list to receive articles monthly on topics important to private business owners or to comment on this article visit our company website at www.boardroomadvisorygroup.com. About the author; Tom is a Principal of Boardroom Advisory Group, LLC, an owner advisory and consulting firm. Tom serves on the Board of Directors for the RI Economic Development Corp’s Small Business Loan Fund Corporation (SBLFC), the finance arm of the RI EDC. He writes a monthly article for the RI EDC’s Every Company Counts initiative. His articles focus on areas that can add significant value for business owners. Contact Tom directly at 401-451-9799 or tstocker@boardroomadvisorygroup.com. Boardroom Advisory Group, LLC is a business advisory and consulting firm specializing in helping business owners resolve day-to-day systemic issues that interfere with cash flow and profitability attainment. The Firm works with both growing and underperforming small to mid-market private companies. The Firm’s team of hands-on senior professionals find and implement solutions to improve top-line and bottom-line growth, increase cash flow, reduce costs, improve process, structure, and use world-class metrics to keep the business on track. The team also has extensive experience working with troubled companies through business restructures and recapitalization. Boardroom Advisory Group’s core focus on developing strategies to drive and measure performance has resulted in a history of sustainable top and bottom line growth, healthy cash flow and increased company value for their clients. For more information about how we can help you build a more valuable business visit our website at www.boardroomadvisorygroup.com. ©2008-09 Boardroom Advisory Group, LLC All Rights Reserved. No part of this document may be reproduced without the express permission of the author. All registered trademarks mentioned in this document are the property of their respective owners. Additional articles written by Mr. Stocker can be found on our website in the “publications” page: www.boardroomadvisorygroup.com/pages/pubs2.html. BOARDROOM ADVISORY GROUP, LLC 10 Larkspur Road, East Greenwich, RI 02818 401-451-9799 www.boardroomadvisorygroup.com

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