Making informed decisions is essential to business success. Managers who have access to information about their own businesses, their competitors, and the market as a whole will be able to set goals and devise strategies more effectively than those who do not.
Although larger organizations often have dedicated business intelligence units that collect and analyze data, there is nothing preventing managers of smaller businesses from doing so on their own.
Many important decisions are made by managers based on their personal knowledge and experiences of the market, rather than by expensive research studies.
As the Strategy Cycle is iterative process, previous strategies and key learnings should be incorporated into business intelligence.
Planning
Business intelligence analysis can help managers identify both internal and external factors that affect the organization and develop suitable strategies for achieving their objectives.
Business aspirations are the goals that an organization seeks to achieve. In general, they are aimed at growing the business and increasing profitability, but they can also be industry specific, such as when a technology company wants to become the leader in innovation.
In order to accomplish these goals, business managers establish goals that provide a more tangible destination for the company to strive for.
For example, a business seeking market leadership will probably focus on increasing sales and reducing costs. The heads of finance, marketing, HR, R&D, and production would then be responsible for developing strategies to accomplish these goals.
The strategy of an organization can be described as a collection of actions that will facilitate its goal achievement. Using an effective cost reduction strategy may require staff redundancies, renegotiation of contractual terms with suppliers, and implementing more efficient supply chains.
Management should constantly consult with other department heads and other employees who will be in charge of implementing the strategy throughout the planning process.
It is difficult for different parts of the business to work together without appropriate communication levels, resulting in redundant efforts or inability to deliver on customers’ expectations.
An example of this is when the marketing department implements a sales campaign without informing production of the plans so that they can prepare for the expected increase in demand.
During the planning process, you should also consider:
- Determining how the success of the strategy will be measured
- Outlining the key milestones and stating when these will be achieved
- Financial planning to agree appropriate budgets for each activity within the strategy
- Undertaking a risk assessment and identifying ways to mitigate major risks
- Establishing an approval and sign-off process for each activity
Implementation
Implementing a strategy involves several interrelated activities, which are undertaken according to an agreed schedule and standard. This is often referred to as project management.
To successfully deliver projects, managers need to have good communication, financial and time management skills, so that they can liaise with staff, contractors and customers (both internal and external), whilst ensuring the project remains on schedule and within budget.
It is common for larger organizations to undertake several interrelated projects to meet a particular objective. This is often referred to as program management, with a program board regularly monitoring each project to ensure it is delivering.
Each milestone activity in the strategy should be reviewed and approved by designated managers as it is completed. Activities that are not delivered on time or in good quality should be reviewed to understand why and corrective action should be taken to bring them back on track.
Measurement
Once the strategy has been implemented, it is important to assess the extent to which it has enabled the goal to be reached. Measuring effectively is crucial to assessing what worked and what needs to be improved in future strategies.
The method used to measure the strategy should be closely tied to the specific objective. Hence, if an organization’s goal was to increase sales turnover, it would use the increase (or decrease) in actual sales as a measurement.
When measuring strategy success, it may not always be possible to use internal data, especially for factors like brand awareness. In these cases, external data will need to be gathered through market research surveys and opinion polls.
Making informed decisions is essential to business success. Knowledge of the market, competitors, and one’s own business will help managers determine their goals and devise strategies better than those who lack this knowledge.