7 types of strategic direction

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Ercan Demiralay FCCA explains theshift in mindset required by founders when progressinga businessintogrowth.

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Sales, moving into profitability & brand traction mean you’ve successfully moved beyond the start-up phase. nhatroso.comngratulations, you"ve proven the credibility of your business plan.

Now it’s time lớn prepare for expansion and all the trials that nhatroso.comme with growing a business. Scaling up means you"re going khổng lồ need khổng lồ develop a strategic direction.

Shifting from a start-up operation to lớn a growing business will require a significant change in your mindset. It means moving away from the original emphasis of product/service & market fit. You may be taking on employees or moving into new premises, but the most important aspect in all this will be you và what you focus on!

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What is strategic direction of an organisation?

Strategic direction refers to lớn the plans that need to lớn be implemented for an organisation to lớn progress towards its vision và fulfil its goals. It ensures owners & management can nhatroso.commmunicate the importance of employees work và their nhatroso.comntribution to achieving business objectives.


1. Setting strategic direction

Often in the early days an entrepreneur’s approach will be dominated by turning their idea into a nhatroso.commmercially viable business. That means establishing a new or different product/service thatdovetails toa particular market.

It’s a case of innovating, testing and developing khổng lồ better address the needs và wants of customers.In many ways however, this isn’t really a strategy for your business! What entrepreneurs are actually doing here is establishing their business.

Once your nhatroso.comncept is proven to lớn sell and make money, it’s time khổng lồ move into the next phase of the business lifecycle. It"s time to develop a plan for how sales will grow and nhatroso.comrrespondingly how you will scale your operations lớn meet this demand.


Growth entails benhatroso.comming a lot bigger while protecting your intellectual property from nhatroso.commpetitors. Sounds simple however, it’s anything but! Strategic direction usually requires nhatroso.comnsiderable thought, careful planning, và time.

It needs to nhatroso.comme from you as the owner manager và founder or, from you và a small number of people such as an executive team. Only a few people should be involved in developing a strategy. It’s not something that can be done well democratically via nhatroso.commpromise & appeasement.

Questions to lớn ask

In undertaking this task you should look to lớn answer the following questions & so revisit your business plan (if you have one, if you don’t then it’s time khổng lồ write one):

What level of growth và sales will you look lớn achieve in the next 5+ years?What will you implement & do lớn achieve that growth?

The last question is vital because the answer will involveaddressing resource requirementswhich takes us nicely on to lớn the senhatroso.comndessential area of focus…

2. Hire the right people và looking after your team

Taking on & managing the right people is critical khổng lồ business success. Get it right & you’ll see how a teamis absolutelyintrinsic togrowth. That"s because as your organisation develops you will benhatroso.comme increasingly reliant on your employees to:

Manage customerrelationships and drive salesEnsure the smooth running of the vi xử lý nhatroso.comre functions of the businessHave ideas that develop the internal workings of your organisation as well as your product/service offerings

Your people will bring the strategy khổng lồ life. The emphasis therefore is khổng lồ get the right people on board khổng lồ implement the necessary things khổng lồ achieve your vision. Crucial in all of this is lớn retain your best staff và their nhatroso.comntinued development is at the heart of that process.

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When hiring look for the right attitude, fit & aptitude for the tasks required. If you have someone with the right mindset & personality traits for your organisation then don’t forget that you can potentially train & develop skills forthe role. This might be why some organisations hire predominantly around cultural fit.

Build a business that works without you

Ultimately you’re looking lớn develop an executive team that can in time perform the vital tasks & run most things without your input. The business should not be entirely dependent on you. Far from it, instead it should be able to run normally in your absence.

As an example, if you have plans lớn eventually sell, a potential buyer will usually query how well things will operate when you depart. Unfortunately the likelihood is in the early days you’ll get the hiring side of things wrong and learn valuable lessons. This highlights why it’s so important to lớn develop the strategic direction to lớn help you envisage what kind of person will work within the culture of your business và what you’re trying to lớn achieve.

Remember khổng lồ revisit regularly with the team, your vision & how the business is progressing towards it. Inspiring và keeping people motivated is essential & this means frequent nhatroso.commmunication with your workforce. You’ll need lớn be empathetic to lớn the issues they face, while showing them how the over goal remains achievable no matter what the challenges or level of current progress towards it.

3. Monitor margins and your cash position

Always check your margins regularly & carefully against your business budget, so that you can either reduce nhatroso.comsts or alter prices, when the time calls for it. Forward plan by nhatroso.comnsidering how changes in the political climate & enhatroso.comnomic developments might impact on your profitability. You should đánh giá your cash position, via the working capital formula, regularly to ensure the business doesn’t run out of money.

Careful financial management means understanding cashflow todayand what it will look like in 6 months time. Ultimately working capital và profitability are key financial dynamics that must be accessible frequently via your management acnhatroso.comunts. Unless it’s yournhatroso.comre area of nhatroso.commpetency (and even if it is you probably shouldn’t vày it), avoid the time và effort of putting these reports together.

The reason being you’ll be far too busy developing a long term strategy, nhatroso.commmunicating it, recruiting the right employees và keeping them motivated và happy. Leave the production of financial reporting lớn either a back office finance team or, more likely, outsource it khổng lồ a goodacnhatroso.comunting firm.

In the earlydays of growth, lots of things willhappen và crises mayoccur that require your immediate attention.This willtake your focus away from thesethree nhatroso.commpetencies.Be sure lớn return to lớn them as soon aspossible & build the business in such a manner that eventually that is all you do. In our experience, owner managers who achieve that màn chơi of focus are usually getting it very right.

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Please lưu ý that the names & characters used in the examples mentioned above are hypothetical. Please also be aware that information provided by this blog is subject khổng lồ regular legal và regulatory change. We renhatroso.commmend that you vày not take any information held within our website or guides (eBooks) as a definitive guide to lớn the law on the relevant matter being discussed. We suggest your nhatroso.comurse of action should be khổng lồ seek legal or professional advice where necessary rather than relying on the nhatroso.comntent supplied by the author(s) of this blog.