‘Business strategy’ is something of a buzzword amongst managers, but we’d bet a fair amount of money that most of them don’t know what it really is.
Done correctly, a business strategy can be true and shape a company for years. Do it wrong, and everything spreads into chaos.
This is one of the reasons why so many companies now outsource individuals to put together complex strategies. One example if JD Dukes, who has become something of an expert in the field. He is regularly sourced for struggling companies who need to be put on the right track – and that says everything you need to know about how specialized this role is.
Unfortunately, with so many people confused by the term, it means plenty of untruths are branded around. We are now going to scrutinize a selection of these myths and highlight all of the inaccuracies that blight business strategy.
Myth #1 – The strategy reveals that a business has no competition
This is one of the most alarming ‘revelations’ to come out of a lot of strategies that businesses put together. More and more seem to be under the impression that they don’t have any competition and most of the time, it couldn’t be further from the truth.
The general consensus, amongst the ‘real’ strategists at least, is that if a business feels they have no competition there’s a big chance that they are working within a market that doesn’t really exist.
Sure, a business might feel that their product blows all rival ones out of the water and this effectively means that they don’t have competition. However, just because their product has a richer feature-set, it doesn’t mean to say that those that are lagging behind aren’t going to catch up and prove more of a threat. The competition will always exist, even if it might feel minimal.
Myth #2 – It’s OK as long as a business has put together a strategy at ‘some point’
Another common misconception is that as long as a business has put together a strategy at some point, they never need to revisit it. The problem is that any strategy which was put together more than a year ago has suddenly become out-of-date. The market has changed, their status in the market may have shifted and generally, things just aren’t accurate.
The best companies will constantly be revisiting their strategy, with the optimum period being once every year. This is sufficient to cope with changes in the industry and anything else that needs to be taken into account.
Myth #3 – The strategy focusses on cutting costs
In truth, we could probably pick a whole host of different ‘strategies’ which businesses claim to use. However, ‘cost reduction’ is a popular one and it’s interesting to delve into this topic further.
In a lot of countries, the main cost that a company has to deal with is its employees. As such, if a company talks about cutting costs, they are effectively talking about releasing employees.
There are very, very few examples where such an approach is going to promote growth. Large companies might experience success by deploying this strategy within a small department, but in terms of ‘cost reduction’ as a strategy for the whole of a business – it’s just not going to work.