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Strategy is key to sustainable growth

How a robust strategic plan can set companies on a course to growth

On their journey toward sustainable growth,  private company owners  must increase sales volumes and surpass the competition . But without a well-developed strategic plan and the talented employees to support it, companies may not achieve their objectives. Learn how to craft and implement a successful growth strategy to chart a course for the coming years.

Creating a detailed battle plan would seem like a logical first step for any business owner. But one of the key findings in  Deloitte’s survey of private company owners and managers  is that many of them “simply do not know which strategies are most effective to drive the future success of their organizations.” In fact, while the survey reveals that many owners want to do the right things better, the lack of a long-term plan creates uncertainty about what exactly “the right things” are.

“Many entrepreneurs rely on gut instinct mainly because of their inherent bias toward action,” explains Dominic Deneault, a practitioner with Deloitte’s Strategy & Operations practice. “These business owners often say, ‘No time to talk and explain to others. I know where I am going. Please follow me,’” says Deneault. “Some succeed, but many fail because, in order to win, you must count on the contribution of others.”

Those surveyed believe that increasing sales volume is the best way to grow the business value of a company. But the lack of a sound corporate strategy actually undermines their ability to fuel long-term growth, says Strategy & Operations Partner Guy Barthell. The reason: without a clear plan of attack, there’s greater potential for management to be impulsive or reactive. This can cause leaders to move the company into areas beyond its core competencies, where it cannot compete effectively.

“Most approaches to strategic planning forget this step – determining where your company is now, and where you want it to be a year from now. But how can you craft a strategic plan when you don’t have a clear consensus on where to start?”
— Dominic Deneault

Every company needs to chart a course
It may sound simple, but the most important aspect of developing a long-term strategic plan is to determine precisely where your company is now, and where you want it to be a year from now. “Most approaches to strategic planning forget this step,” explains Deneault. “But how can you craft a strategic plan when you don’t have a clear consensus on where to start?”

Once the leadership has clearly determined where it wants to go, the next step is to articulate a strategic plan that sets out concise, measurable objectives to help the company reach its destination. The plan should include 10 to 15 specific strategies that will collectively help the company achieve its targets. Each of those strategies should be seen as a call to arms, says Deneault. Management should also assign each strategy to a “champion” or watchdog accountable for its execution.

A clear growth strategy can have unexpected benefits
Creating and implementing a strategy will not only set the company on a clearly articulated course to growth; it will also produce positive side effects. Having a strategic plan can improve teamwork and boost morale, simply by engaging as many employees as possible. Secondly, following a clear route can have a positive impact on employee retention. “If an organization is going in one direction one day, another direction the next day, and a totally new direction the following week — that kind of organization is much more likely to lose its people,” Barthell observes.

In fact, an owner without a strategy may run the risk of losing the company. “This is a huge risk in comparison to the small amount of time an entrepreneur saves by running the company like a one-man show,” says Deneault. “That kind of manager can end up surrounded by a team of weak employees, because no one with real talent would be interested in working with them.” To put themselves on the route to success, private company owners must take the time to articulate their growth strategy, then engage all employees in executing it together.

Five key steps to designing a strategy
  1. Analyze the current situation. Determining where your company stands is an important first step that some managers forget. Ask yourself, “Where are we now?”
  2. Set a clear strategic direction. Use mission and vision statements to articulate goals, then set out an action plan for how to reach them. Focus on your competitive advantages.
  3. Develop a coherent set of strategies. Outline 10 to 15 strategies and assign them to key employees to implement.
  4. Establish a detailed action plan. Include benchmarks and scorecards for monitoring progress. “Assign a champion to measure your progress,” says Barthell.
  5. Align the organization. Make sure you disseminate the strategy to all employees. “If changes must be made to ensure implementation,” says Barthell, “do it, and do it fast.”

Deloitte Image  Learn more about sustainable growth