How to Develop Strategy in the Right Way?

Much has been said and written about strategic planning. However, the problem remains the same – there are still many managers and business owners who have the wrong concept of company strategy and strategic planning in general. It often happens that the developed strategy either doesn’t work or it has nothing to do with reality. Sometimes, strategies remain on paper, being favorite toys of top managers. In such a case, however, strategies have nothing to do with what is going on in the company, on lower managerial and production levels. Sure thing, strategic planning is not only about design of strategy maps and making presentations for shareholders and top managers. It is easy to set unrealistic goals and say: “We are going to be the best!”

Recent survey has shown that only 20% of top managers and midlevel managers directly participate in strategic planning. However, very few of them have the right concept of company strategy. If a top manager understands strategy in his own way he will interpret it in the wrong way to lower level managers. Thus, employees are the lowest level will have no idea of what the company’s driving at. It’s an interesting question what is worse: to be ignorant on company strategy or to participate in strategic planning but have the wrong concept of the strategy? Still, there is no definite answer. However, it is possible to say that The Best Option is to get the entire personnel involved in discussion and adoption of a strategy.

How to develop strategy in the right way? Most believe that development of a strategy is only about setting strategic goals. This is not so. Company owners, shareholders and top managers should answer some questions “Where will we be in several years?” “What are our values?” “Who are our customers?” “What do our customers need?” There are even more important questions like “How can we implement strategic goals?”

One of the most common mistakes in developing and implementing strategies is designing of unrealistic strategic goals. Of course, a strategy should be ambitious but at the same time realistic. It is impossible to win a 50% market share in one year is at the moment the company has only 3 or 5 percents. So, it is very important to make you a realistic strategy and goals that can be achieved. The same time top management of a company should always look to the future and set new goals otherwise the company will not develop.

Strategy is also often confused with short-term goals. Some managers want to get immediate profits and instead of developing a comprehensive strategy the design short-term goals to get immediate cash. This is also a very common mistake with regards to strategy development. Most experts recommend using services of external advisors. At the same time, one needs to be cautious because somebody else’s experience is still somebody else’s experience. Something that is perfect for one company can be devastating for another. The best way is to involve top managers, company shareholders, business owners, external advisors and ordinary personnel in discussion and development of a strategy.