Strategic resilience is the practice of thinking forward while leading through present turbulence, adapting to difficult operating circumstances while looking beyond current conditions to keep focused on the horizon.
So what does that mean? Well, during difficult economic times, whether it was 2003, 2008 or today during COVID most entrepreneurs are really working hard to keep their businesses afloat with the hope of getting back to normal. The danger with that is that we sometimes miss the opportunity to look forward, to innovate, and leapfrog our competition. In other words, we miss the chance to come out of the recession even stronger.
Step 1: Give yourself permission
We don't want to drop the ball or stop what's actually making us money. But we need to give ourselves permission to recreate our business or at the very least, give ourselves permission to look at all aspects of what's working and what is not. Especially when looking at upcoming trends that might disrupt our profit centers.
That's why at STAND, we say, let's build a business that would put your business out of business. That's how we start all our strategic discussions, because it gives us permission to think outside the box and to reimagine what our business could be and to innovate beyond the small, safe bets, you need to look at the bigger picture.
Let's build a business that would put your business out of business
Step 2: Evaluate your Micro-Environment
What are your winners? What are your losers? Sometimes we don't take the time to look at what products or services are winning and which ones are not winning, which ones are high margin, which ones are low margin. Maybe it's time to shuffle things up.
With your team, start to brainstorm against these following categories on all things Micro-Environment.
Customers
The kind of customer base that your company attracts, as well as the reasoning behind purchasing your product, are going to highly affect the way you create marketing campaigns. Your customers can be B2C, B2B, international, local, and so on.
Important factors related to customers are:
Stability of demand
Prospects of sale growth
Relative profitability
Intensity of competition
Suppliers
If a supplier of a particular product is the largest, or even the only one, they are certainly going to have a big influence on how successful your business is.
The suppliers are extremely important factors as:
Key link in the value delivery process
Insurance that your business has the necessary resources
Essential determinants in terms of price increase or decrease
Resellers
If you decide to sell your product via a third party reseller, or middlemen such as wholesalers and retailers, then the success of your marketing is going to be highly dependent on them. If let’s say, a certain retail seller has a strong reputation, it will pass on to your product.
As a link between you and the customer, they are important in terms of these factors:
Promotion
Sale
Distribution
Marketing
Financial mediation
Competitors
Logically, every business that sells the same or a similar kind of product as you do is your competition on the market. So, their sale and marketing tactics matter to you a lot. You need to answer various questions, such as how their product and its price affects yours and how you can make use of that in order to gain an edge over them.
The three factors that matter in this case are:
Desire competition
Product form competition
Brand competition
Step 3: Evaluate your Marco-Environment
What is macro-environment? Basically the macro is the bigger picture, economic factors, demographic forces, technology forces, political forces, social forces etc...
Again, with your team. Brainstorm into the following Macro categories to try and look beyond the day to day operations.
Economic factors
Basically, the very environment of the economy can have an effect on two essential aspects – your company’s levels of production and the decision-making process of your customers.
Some examples of economic factors affecting business:
Interest rates
Exchange rates
Recession
Inflation
Taxes
Demand / Supply
Demographic forces
Each and every chunk of the market is affected by universal demographic forces. These are age, education level, cultural characteristics, country and region, lifestyle, and so on.
The crucial variables include:
How income variables influence business
Age variables that affect business
Geographic Region Variables
Education Level as a Variable
Technological factors
These factors are related to skills and ability that are implemented into production, as well as all the materials and technology that a particular product requires to be made. They are essential and can have a big impact on how well your business is running. It boils down to even the most basic factors, such as what kind of maintenance trolleys you use in order to preserve your tools and equipment for as long as you possibly can.
Some of the most common technological factors are:
Automation
Internet connectivity
3D technology
Speed/power of computer calculation
Engine performance and efficiency
Security in terms of cryptography
Wireless charging
Natural and physical forces
Every business must also take into account the very planet and its resources. There are those that can be renewed, such as forests and agricultural products, and those that cannot, such as coal, minerals, oil, and the like. Both are strongly related to production. So, natural and physical forces can be:
Climate change
Pollution
Weather
Availability of both non-renewable and renewable resources
Laws that regulate the environment
Survival of particular biological species
Political and legal forces
The market develops according to the political and legal environment in various areas. This means that every business needs to be up to date with such forces worldwide in order to be able to make the right decisions.
This generally includes legal factors such as:
Copyright law
Employment law
Fraud law
Discrimination law
Health and Safety law
Import/Export law
Social and cultural forces
Finally, it is crucial to understand that the product that you bring to the market can have a strong impact on society. For example, your production needs to eliminate every practice that is hazardous to society, and show that it is socially responsible. There is a wide variety of social and cultural factors, some of them being:
Purchasing habits
Level of education
Religion and beliefs
Consciousness about health issues
Social classes
Structure and size of a family
Growth rate of the population
Emigration and immigration rates
Life expectancy rates and age distribution
Different lifestyles
Step 4: Bring it all together into a SWOT Analysis
The SWOT (Strengths, Weaknesses, Opportunities, and Threats) is useful both for understanding the micro and the macro factors. The former two are internal and affect the very business, while the latter are external and not under the organization’s control.
In terms of strengths, you should ask yourself what you are good at, what value you bring, what kind of difference you make, and so on. On the other hand, when it comes to weaknesses, you need to evaluate your dependency on outside vendors, aspects that need to be improved, and so on.
Opportunities are related to favorable circumstances that the company needs to make use of in order to improve its position on the market. Threats are factors that cannot be controlled but need to be acknowledged. This includes political, economic, and customer trends, as well as debts and costs
Step 5: Build your Strategy Cascade
You can view our YouTube Channel to learn more about how to create a Strategy Cascade. But in a nutshell, it is the strategic process of answering these 5 questions.
What is our winning aspiration?
Where will we play?
How will we win?
What capabilities must we have?
What management systems to we need?