Creating a business strategy and assessing your business with this insightful tool
When creating a business strategy or assessing your business, it can be difficult to know where to start. There are so many things you could do right now: look for capital and investors, network with potential clients, do market research, work on your social media strategy, tweak your offering… If you don’t have a tool to give you a framework to conduct this analysis, you run the risk of spreading yourself thin, chasing everything at once.
Against that, the Wheel of Strategy gives you
a step-by-step, orderly checklist to do several
The Wheel of Strategy is a diagram that invites you to grade your business on a scale of 1 to 10 in eight different areas. Filling in the gradients of the wheel will allow you to:
1. Establish a diagnostic
Where is your business at, right now? What are its strengths and weaknesses? Use the wheel as a diagnostic tool to examine your strategy from a number of perspectives.
Choose a number between 1 and 10 to represent how strong you are in each specific area: ideally you would be as close to 10 as possible in each one.
If you have an unbalanced or “unrounded” wheel, it is going to be rather difficult to push it forward in the direction of your high level vision: the next step is to figure out what needs to be fixed, who is going to do it and when. To do that, set some SMART goals!
2. Work to improve your business strategy
By filling in the Wheel of strategy you will get actionable insights and you will see how a tweak here results in a change there: for example by refining which Customer Segments you serve, you will stumble upon a new tool in Planning Processes, which will unlock new Resources and ultimately modify your Product.
3. Do simulations for proposed strategies
The Wheel of strategy is also a superb tool for “What if?” brainstorming sessions. Because it gathers information in a way that makes it visually easier to hold all the strands together, you can support effective, daring brainstorming and follow your flights of fancy, while always having a solid base to start from and go back to, and to ground and anchor the conversation around a tangible visual cue.
Creating a business strategy: the spokes
of the wheel
The Wheel of Strategy has eight spokes: products, markets, customer segments, planning processes, actions, motivation, support and resources. I developed this when I saw how useful the Wheel of Life is during business and life coaching sessions, so I thought about a way that I could apply this to areas of business that aren’t always very clear.
Products, markets, customer segments: the foundation of creating a business strategy
The first question to ask yourself is, what product or products do you offer? It might sound obvious, but do you know exactly what the product is, can you articulate it clearly? For example if it’s a service: is it training, is it an outsourced service, is it provided on a consultancy basis, on a retainer basis? You need to be crystal clear on what it is you offer exactly: there is a plethora of ways to “skin a cat”.
In my book The Savvy Guide to Making More Money, you will find a detailed blueprint to investigate and refine your offering. This excerpt describes a methodical framework to explore and create a product, from very vague (“I like cooking”) to laser-focused.
The second spoke of the wheel is about identifying your markets. Do you know what your markets are? Typically these tend to be geographical: are you focusing on a domestic or export strategy? Are you taking a nationwide approach, i.e. the Irish market, or a particular region, the Dublin market, or a number of them, the Irish and Maltese markets? What market is it that you are pursuing, from a geographical perspective? Also, in this digital age, your market could span both the physical and online worlds. If so, then who are you seeking to target online? Bloggers? Facebook users? The C2C market through the internet?
The third question to ask yourself is, “Do I know exactly who I am targeting?” In the context of the #SavvyTeenAcademy, Monica Murphy and I have a corporate offering, an open course offering and a CSR offering.
To sum up, in the specific case of the #SavvyTeenAcademy, the first three spokes of the wheel are:
Product: a five-day summer camp, Monday to Friday, focusing on Careers, Communication and Confidence for young people going into 5th and 6th Year.
Market: we are focusing on Dublin and Cork at the moment and we are open to new possibilities if we are approached.
Customer Segments: corporate, open course, CSR.
These first three spokes are the foundation of your strategy and they will influence your answers to the other areas of the wheel, so it’s a good idea to spend time exploring them in depth. This is where the flexibility of the Wheel of Strategy comes in: it’s ideal to use the Wheel in conjunction with other tools, as these frameworks will build on one another and exponentially enrich your answers.
Creating a business strategy with the Ansoff matrix
If you are not very clear yet on your products, markets and customers segments, a great tool to use is the Ansoff matrix. This matrix explores two dimensions, product and market, along two axes: new or existing. This yields four dimensions:
- Selling an existing product to an existing market: your dimension is Market Penetration
- Selling an existing product to a new market: your dimension is Market Development
- Selling a new product to an existing market: your dimension is Product Development
- Selling a new product to a new market: your dimension is Diversification
These four dimensions go from least risky to most risky.
When working on creating a business strategy, this is a model that will help you figure out which way to direct your actions.
For example what am I going to do this year if I choose Market Penetration:
- am I going to increase capacity?
- am I going to increase the frequency of the purchases?
- am I going to increase the volume of the purchases?
- am I going to increase the value and hence the price of my offering?
- or am I going to develop new relationships within my existing markets to sell existing products?
In terms of risk vectors, the next step would be to take an existing product and offer it to a new market, introducing it to new customer segments and geographies.
The interesting thing is that creating a business strategy can progressively take you through different quadrants of the Ansoff matrix. In my own case, the #SavvyTeenAcademy was in the Product Development quadrant last year, and this year it comes in under Market Penetration.
In contrast, Market Development is slightly more risky since you can’t rely on the trust you have built with existing markets, but seek to take a strategy that has worked before to a new group of customers. Don’t make the mistake of thinking you can copy and paste, as this is where so many companies have fallen down (i.e. Wal Mart in Germany).
Finally Diversification is when you are introducing a new product to a new market, and is the highest risk proposition. If you have been going through the first three quadrants of the Ansoff matrix there is a fair chance that your human, financial and mental capacity and resources are exhausted by now. So as a rule of thumb you would consider diversification when the other three are not working or when you are faced with a structural change in the marketplace, or if you have a particular (substantiated!) desire to start a new, completely unrelated business.
As a result of the above, I find the Ansoff matrix a highly effective tool to brainstorm around those first three elements of the Wheel of Strategy.
The next question to ask in the Wheel of Strategy is, what are your planning processes? Have you put systems in place that allow you to methodically take step after step and to make sure you are not putting the cart before the horse?
There are a myriad tools out there that you can use to great effect in conjunction with the Wheel of Strategy: the PESTLE framework (Political, Economic, Social, Technology, Legal and Environment), the SWOT analysis (Strengths, Weaknesses, Opportunities and Threats), SMART goals, the GROW model, a business plan that you refer to often; and you can add the Ansoff matrix and the Wheel of Strategy itself to your panoply of tools.
Ensuring you have a well-stocked toolbox before you set out creating a business strategy will allow you to have really productive business planning sessions instead of running around chasing your tail.
The next spoke asks about your actions. More specifically: do your actions reflect your strategy? This is a hard one and it can be uncomfortable. Basically, are you doing on a daily basis what your strategy says you should? If you’re not, then what are the reasons? Is it, for example, because you let the urgent take precedence over the important? Then you can use the Important and Urgent Matrix to help you with that.
You can also use the Blue Ocean Leadership Canvas tool to input your leadership activities and obtain a detailed graph mapping your activities against your stated objective: considering what you are working towards and the different types of actions you have outlined in order to reach that objective, where does your daily activity fit? Is it actively taking you and your team towards your goal, or are you stagnating?
On the other hand, if you’re not quite sure what actions to take to pursue that strategy, focus on what one thing you can do today to progress towards your goal.
This part of the analysis can be very unsettling, as I’ve heard from a number of people. The question about whether your actions reflect your strategy really asks you to hold up the mirror. The question about support can draw out some uncomfortable truths. This exercise finds its way into places you might have been hiding…
Now if the reason you are not taking action is not procrastination and is not that you’re unsure of what to do, maybe motivation is the issue. Maybe your heart isn’t in it: I meet people all the time that rationalize this by blaming external factors (e.g. the economy, lack of time imposed by others, waiting for things to “settle down”). If that is the case, you need to dig deeper and ask yourself: is this what you really want? Does it get you out of bed in the morning?
Demotivation can also come from fear of failure or fear of success. It’s a very powerful debilitator. It’s very important to take the time to really consider where it’s coming from and how you might need to adjust course. The alternative is standing still for a long period of time whilst blaming other people, things or events.
The next area to investigate is support. I am very lucky to have a lot of support in my endeavours: I have the full support of my team and as a result there is no friction in this domain. I don’t need to fight anything or anybody and that really helps the progress of my business. If I did experience this kind of friction, I would ask myself what I can do: is it due to a lack of understanding? Perhaps I haven’t “sold” the message correctly, perhaps there is another reason for it. Asking whether you are supported in your environment and how you can garner more support is an essential part of the Wheel of Strategy diagnostic.
Finally, the last spoke of the wheel concerns resources: the mind, the time, the people, the confidence, the mentoring, the role models, the vision that you need. Do you have all the resources that you need to have? In my Savvy Women Online endeavour, I have my trusty Wandsoft CRM, the team in DCU, I received an Innovation Voucher, as well as many other pieces of the puzzle: all the mechanisms are in place to make it happen and this mission is high on my agenda for the year ahead.
As you work your way around the wheel, you will see a diagnostic emerge and you will be able to answer the following questions:
- Where am I now?
- Where are the gaps?
- How rounded is that wheel?
- Where are the issues?
Of course we would all like the wheel to be perfectly balanced, but, as with anything that is constantly evolving, your business is constantly changing, along with its place in the wider context of competition, the market place, and the economy: you will always be in the process of balancing and rebalancing.
When you have worked your way around the wheel once, go off to explore the resources hyperlinked in this article, then come back and fix whatever is in your power to fix. You can have regular strategy check-ins to check where the gaps are, whether anything has shifted, and how your actions have borne fruit. This is a hugely effective, impactful process and I wish you the very best with it.
Are you on the list?