What a year 2020 has turned out to be. For most of us, not the twenty plenty that was envisioned at the onset. Who would have thought that a flu virus reported in China would have such a devastating effect on the world economy? And ourselves.

Many people can’t wait to close this chapter.

The fact is, however, that not much is going to change at the stroke of midnight on 31 December 2020. The world is not magically going to revert to what it was before. It is up to you and me to take the bull by the horns. To formulate a strategy for the future. To decide how to deal with uncertainty in these turbulent times.

History has taught us two things about times of turmoil:

  • Some companies respond better than others. Are they lucky, or better prepared?
  • Some change is temporary and some here to stay. The lockdown in itself exceeded the estimated 66 days it takes to form new habits. This has already impacted market demand in so many ways. Do we know how this affects us?

Ultimately, we have to survive the crisis. We must balance current needs with long-term objectives, improve efficiency without sacrificing innovation.

Here are the steps we follow to develop a strategy for 2021.

1 – Know your destination. Where are you headed with your business? Has your vision changed? Look at your mission statement. Have any of the 5 elements been affected by current events; that is your target market, your value proposition and how you deliver this, the processes or technology used in your business, and your purpose – your Why?

2 – Revisit your existing Business Model Canvas and ensure that it is well defined. The key activities in your business must be understood, and flawlessly executed, KPI’s measured and the results evaluated. Take an honest, hard look at your financials. Should the targets or the execution be adjusted?

3 – Develop an understanding of the Business Model Environment. Embrace the uncertainty of the future as a reality.

Identify forces that will shape future markets and operating conditions.

How do macro-economic forces, socio-economic trends and technological advances affect the economy and your markets?

Identify disruptions in the value chain and changes in the needs and demands of your customers.

It is important to determine whether a behaviour change is temporary or permanent. Has an existing trend received a short-term boost or achieved accelerated growth? Is a new trend a blip or genuine disruption? Have consumers developed new habits or different needs during lockdown?

4 – Next we look at innovation – the word synonymous to business growth. Here are five ways to grow your business, even during times of uncertainty.

  • Sell more of your existing products to existing customers. Offer your clients better experiences by building stronger relations with them. In this highly competitive world, the personal connection has become increasingly important. Prove to your customers that you value them, and in time your loyalty will be rewarded with loyalty. 
  • Develop new and improved features to your existing products. Progress down your product road map; add improvements incrementally to enhance your customer’s satisfaction and keep them interested.
  • Develop new product offerings altogether. Solve different problems for existing customers that may have become apparent as your relationship with them improved.
  • Create new revenue streams or utilise different channels to reach customers and/or deliver your offering, for example, subscription models, web-based sales or online service delivery.
  • Explore new markets to attract new customers. It’s a whole new world out there. Times of crisis are also times of opportunity. Identify new market segments that have now become available to you.

On the axes of capability and markets, innovation can be evolutionary or revolutionary, exploration or differentiation.

The bulk of your innovation should go into evolutionary growth, whilst investing in the others dictated to by your views of the possible futures.

5 – Use the knowledge accumulated thus far – your goals, your results, your strengths and weaknesses, business environment developments, trends and growth opportunities – and develop a few scenarios to consider.

The aim in each case is to identify the key activities and resources required to deliver the value proposition to the target market in an economically viable manner.

Zero growth – no good news as far as the markets are concerned. Consolidate activities and expenses around servicing key customers with core products.

Modest growth – project cautious growth in sales with realistic, post lockdown data. Any new products, features or market segments already developed, operational savings already introduced should be included.

High growth – apply a more aggressive approach to innovation that results in market adoption of one or more of the growth strategies that you identified. That is, introducing both new capacity and new customers to the equation.

Moonshot – in the words of Jack Nicholson: “take away reason and accountability”. Unshackle your business and shoot the lights out. New processes, products and markets all come together in an unprecedented fashion. Just do it!

From here, select a business model and strategy aligned with your long term goals. Your new business model will be influenced by the supply and demand developments in your industry, the strengths and weaknesses of your business and capacity considerations.

Remember, you cannot pursue all possibilities, and should not try to do so…

Key questions to return to throughout:

  • What are we good at?
  • What do we have capacity for?
  • Why will they choose us?

6 – Link Strategy 2021 to Operations.

Strategy is the way you aim to achieve your objectives.

Sologix - Master Strategy 2021 Planning vs Doing
So often, though, there is a disconnect between the planning and the doing. 
 
Know your goals and how you plan to achieve them. Identify the key activities required, employ the discipline to execute these, fail fast should it not work and adopt new plans.

Here are two ways to close the gap between strategy and execution.

With the right processes and technology in place, specific skills that combine well are required to face off challenges. This demands fully engaged employees that feel connected to the purpose and identity of the organisation. Let them understand, in human terms, what skills are required to execute strategy and how their roles tie into this. Involve them in developing your Strategy 2021.

The other is a paradigm shift in the budgeting process. All costs are, by extension, investment in activities and resources required to deliver strategy. The budget must reflect the most critical tasks in this regard and should not merely be a desktop exercise in tweaking numbers to satisfy the banks. Critically evaluate whether your planned expenditure incorporates the investment required to achieve the innovation required to maintain and/or grow your business.

The Sologix solution

We have the experience and the sincere desire to help you understand your business model and develop strategies for the future.  Our sole objective is to help you improve your business.

Our process to develop Strategy 2021 includes

  • templates,
  • checklists,
  • guidelines and access to
  • selected online courses.

We have limited slots available before the end of the year. Book a session with Anton now to help you prepare for your future.

Engage with Sologix to help you on this path. Join an online course or contact us for personal business coaching by sending us an email here.