Validating Your Business Strategy; To Get Strategy Right, it’s an On-Going Process: Validation Keeps It on Track…

Validating your business strategy is critical for business sustainability… But what should you validate? Validate everything having to do with the basic assumptions of the business, for example; two key factors include:

1. The ‘Problem’ you are trying to solve: You must ensure that the intended problem is ‘real’ and in fact, it’s an important issue that creates tangible pain or cost for the target customers…

2. The ‘Solution’ that’s being proposed to solve the intended problem: You must ensure that your solution, in fact, solves the intended problem and eliminate or mitigates the target customer’s pain or cost, and it does so by providing great value…

According to Greg Githens; CEOs regard the ‘correct business strategy’ as the #1 success factor for strategic initiatives: Validation means getting it right… Moreover, you have a valid or correct strategy– when you have matched a ‘distinct problem’ or opportunity with a ‘effective solution’ and assured that your solution is adequately resourced and structured for implementation; that is, it’s a strong, logical coupling of a distinct problem/opportunity with a distinct solution…

valid 13_2_validation_manufacturing_process

It’s important, from time-to-time, to ‘stand-outside’ your business and look at it from a customers’ perspective… while engaging the customer, face-to-face, so as to better understand the ‘work’ that they are trying to accomplish and how they are trying solve their pain… Then from these first hand lessons learned, you might determine that your business strategy is not working because you are trying to solve the wrong ‘problem’ or trying to solve the ‘problem’ in the wrong way… then, your remedy is to ‘pivot’ your business strategy: Update or completely change it, and repeat the process until you get the ‘solution’ right…

Also, stand-outside the business to better understand the end-to-end customer buying process, identify the leverage points and if you find that your engagement is wrong, then again ‘pivot’. Throughout this process you must change course whenever you discover that the course is wrong… Understand that the key steps are; 1) identify the assumptions, 2) stand-outside the business to test the assumptions, 3) validate the facts by engaging customers face-to-face, then ‘pivot’ as needed…

Validating your business strategy can be a very disruptive process for a business; not every stakeholder in your business will agree with a proposed ‘pivot’, that is, a change in the coupling of the existing ‘solution’ with the ‘problem or opportunity’… An important leadership role is to meet and work with key stakeholders and get them to better understand the justification for a proposed ‘pivot’… Hopefully these interactions create a more solid framework for developing, strengthening, and validating the business strategy, at least temporarily…

However, if there are disagreements you may have, at least, gained some useful feedback about the issues and concerns from key stakeholders, which may be useful for making adjustments, as needed… According to Paul Ricoeur; the logic of validation allows you to move between the two limits of dogmatism and skepticism...

valid thBRDDAAKG

In the article Validate Your Vision And Strategy by Guy Rigby writes: A business with a clear ‘vision’ and a strategy designed to achieve it, will be far more likely to achieve success. Vision gives way to strategy: Once you have a ‘vision’, you should describe exactly what you want the business to look like (to become) in several years, using just a couple of brief sentences– you must be realistic and consider all available resources… and develop it from an analysis of the market, competition, opportunities and threats… as well as from a visionary prospective…

Also, identify just a few (three or four) key ‘success factors’ that the business really hinges-on; critical factors that the business will depend-on in order for it to meet its multi-year goal… Describe each one of the factor in a couple of brief sentences, specifying targets and metrics that are to be used to show that the business is on-course to fulfill the vision, over the next several years…

Strategy gives way to tactics: Against each critical ‘success factor’, identify the tactics to be used to ensure successful delivery of each success factor, over the next several years… Also, clarify the specific responsibility for each delivery, and consider the risks, what could go wrong, and how you would reduce or manage these risks… Involve the team: Get the team actively involved in development of the ‘success factors’, since they can provide ideas, insights…

By working through the process with the team you can develop a detailed understanding of the business objectives and success factors, and how they can be achieved… Implementation and execution is everything: Strategy is pointless if it’s not implemented and executed effectively, so make sure that people’s actions and responsibilities are clearly established at the outset and managed relentlessly… Circumstances change and strategy is emergent, so don’t be afraid to change plans and priorities, but in all cases there must be validation…

valid th0RC4W1J3

In the article The Hidden Dimension of Business Strategy Validation by johnrchildress writes: It’s a sad truth but too often the only way you find out whether your business strategy worked or not is after its implementation… And even then it gets very confusing as to what actually caused it to fail. Was it a bad a strategy or was it just badly implementation-execution? This chicken and egg argument is rampant in academic business circles and in the literature on strategy…

Hence, one of the first things you must do is spend time validating the business strategy before implementation… Most strategy validation exercises conducted by the big consulting firms involve lots of market research, weeks of data analysis, and analyzing the business strategy versus current and future market trends. This is an important piece of the business strategy validation process…

However, in many cases it’s surprising that even when the business strategy gets the green light from the consulting firm, it may still fail. Ah, then you say– its poor execution, that’s the culprit. Maybe you are right, but it would be great if there was a better early warning signal that the business strategy might fail, instead of waiting for months or years to determine the outcome… A complementary approach to business strategy validation has less to do with market and customer analysis and more to do with evaluating the internal company management alignment and commitment of the senior leadership team…

It’s this alignment, or lack of alignment at the top, that is a critical factor in deciding whether a business strategy is valid or not, or will be successful or not… And this deciding factor is often overlooked and undervalued for its impact on the ability of a business to perform… Strategy validation is more than just analytics and market insights; there are people issues as well…

valid th7HA48YBE

Most business strategies don’t work because they are not ‘real’ strategies, in fact, they are just ‘hopes’ or something that the business management ‘wishes’ will happen… many stakeholders within an organization and even customers, often don’t really understand what a business might call a strategy, and even if they did understand it, they probably wouldn’t be able to implemented it…

It’s vital to understand difference between a business management ‘intention’ versus what is ‘actually’ delivered… To be ‘validated’ a business strategy should pass several simple tests, for example: Does it really deliver the ‘right solution’ to the customer? Is it ‘rational, relevant, timely’ in its delivery? Is it ‘worth’ it, does it provide ‘real value’ to the customer? Evidence suggestions that many strategies do ‘actually work’, but only a small percentage are able to convincingly demonstrate that they provide ‘real value’…

According to Mike Moore; it’s important to look back at what worked (or didn’t)… validating a business strategy consists of adopting a reverse view: Look at the tactics that are being used: How successful are they? How did you arrive at these tactics? What actions would be more effective? Has the marketplace shifted? Examining all the strategic assumptions and analysis that are behind the game plan is critically important… The intellectual integrity of a business strategy should be vetted with all key stakeholders, including; entire management team, boards of directors, employees, customers, vendors…

According to Travis Newton; What is validation, you ask? I know what you’re thinking, for example; if the market is growing and all the research shows that this is a viable market, then why worry about validation? However, just because a market is purchasing a specific item, then what makes you think they’ll purchase yours? Validation of specific solution is critical for business sustainability…

According to Steve Blank; one of the major outcomes of validation is a proven and tested business road map, and you can create this map, for example; by engaging a small set of early visionary customers, and the goal of this step is to validate your solution and identify a scalable and repeatable business strategy that works…

valid3 th

Business is highly competitive and an ever-changing environment with new opportunities and threats arising at every turn, for example; technology change, increased regulation, globalization, development of international supply chains… these are just some of the factors driving change within domestic and international industries… And counter to popular thinking, the problem that many businesses face is not necessarily due to an absence of opportunity and choice, but rather its proliferation…

A business must not only choose the markets they compete-in and their level of commitment, but also decide how to deploy finite resources to achieve progressively higher performance… the struggle of some organizations to effectively realize their business strategy is a real challenge, which includes; replacing dead-end business initiatives that don’t quite deliver the performance required– with relatively simple, easy-to-understand, implementable initiatives that can be validated with real evidence of success…

According to rianstefan; adapting your business strategy to changing competitive dynamics involves ‘risk’ to the business, which means that a business must plan ahead and examine alternative options before taking any action to modify existing business strategic, for example: Examine the ‘key performance indicators’: Look at revenue, sales and other metrics… Review industry benchmarks to see if there might be a long-term industry shift that may impact the business… And most important, evaluate your business strategy every six months or so, and make adjustments, as necessary…

Then, analyze these results and expand the business initiatives that show promise, and cut back or refine those that don’t… According to Michel Besner; sometimes good ideas are not ready for the market, yet. If customers don’t see the value or need– don’t just keep pushing because you think you are right. In some cases, it’s not a bad thing to park an idea for a while and focus on something else until the market is ready for your grand business strategy– the key is validation before committing to a specific business strategy…