How to Build an Effective Growth Strategy

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By Lyndon Johnson

It’s early May. That means it’s too late to build a strategy for your business, right?  Not necessarily.

In this article I look at what constitutes both good and bad strategies and use my specialist subject—PR and marketing strategies—as an example.

Thinking about strategy

Like many entrepreneurs I started thinking a lot about my business growth strategy for COMMS.BAR for the coming year in early January. I started writing this piece mid-January because I’d been thinking about strategy for the last few years.

I’ve spent a lot of time looking at the fundamentals of strategy development. Exploring questions like “what should a strategy include?’, ‘how can entrepreneurs build an effective public relations and marketing strategy?’ and ‘how can an effective pr and marketing strategy play a role in achieving measurable growth?’ helps me design more effective business strategies to grow both my business as well as for the entrepreneurs with whom we work.

The fact that I started writing this piece in January and finished it mid-April illustrates perfectly the point I hope to make: Strategy (and strategy development) isn’t linear. It isn’t determined by a fixed timeline, and it’s definitely not something you start in January and measure in December.

Not just another strategy article

There is no shortage of articles telling you what tactics you should include in a strategy. Most of them are listicles re-hashing the same things. There are, however, few articles that explain how to build effective growth strategies. There are even more articles on PR and marketing tactics—and less about building and testing effective PR and marketing strategies.

Good strategy, bad strategy

A few years ago I read Good Strategy Bad Strategy by Richard Rumelt. It’s a book I believe every entrepreneur should read, and I keep coming back to it for inspiration and direction. While travelling for business at the end of last year I picked up a copy to re-read on the trip as part of the work I was doing to design better tools for entrepreneurs to build and test strategy. The book explains the essence of good strategies, the most common causes of bad strategies, and how to build good, rather than bad, strategies. The top causes of strategic failure (and failure to develop effective strategies) are a fundamental lack of understanding of what strategy really is, which makes developing and executing it almost impossible.

What is strategy?

So, first things first. Strategy requires three things: a diagnosis of the problem, a guiding policy and coherent actions. The diagnosis is a summary of the obstacle to be overcome in order to reach the intended destination. Policies are the broad direction and underlying principles of the strategy. Coherent actions are the specific tactics that you will take in order to achieve the goals, within the framework of the policies.

Most strategies are, according to Rumelt, a series of aspirational goals and tactics. They fail to include the policies; they lack an over-arching methodology and logic. They are, to quote Rumelt, fluff masquerading as expertise, thought and analysis.

Another problem is we think about strategies at the start of the year, develop detailed strategy documents and then put them in a drawer and not look at them for another eleven and a half months. Rumelt explains that the need for true strategy is episodic, rather than annual. A strategy is a route-map for overcoming obstacles in order to achieve a defined goal.

A third problem is that most strategies are long on goals and actions but lack a guiding policy that can be used to guide strategy development on an ongoing basis.

Rumelt also identifies that most strategies are based on best-case scenarios, rather than the worst case—and fail to acknowledge the obstacles to achieving the desired outcome.

I see these problems every day. They are all common causes of failure in my specialty subject—PR and marketing. Kevin York wrote on Medium one of the best pieces I’ve read on the specific issue facing my industry. In it, he explains most PR strategies are simply a list of tactics—because that’s what most traditional agencies sell—and a list of tactics doesn’t build a strategy. It simply lays out a series of activities.

Obstacles change everything

Every entrepreneur knows that building a business is a constantly moving exercise. The strategies we build and execute need to be designed to evolve with the ups and downs of the business. An effective strategy needs, to quote Rudyard Kipling, meet with triumph and disaster, and treat those two imposters just the same.

It might sound counter-intuitive to focus on obstacles when building a strategy, but it changes the focus, inserts a dose of reality, and increases the chances of building good strategies.

Let me give you an example. Most of the entrepreneurs I work with have a tactical plan already thought out when they talk with me or one of the other COMMS.BAR specialists. It is, more often than not, based on the traditional industry logic that awareness alone leads to commercial outcomes, because that is the conventional logic of within the industry.

They want more customers and are convinced that media coverage will deliver the outcome they seek. The reality is that media coverage rarely delivers anything of measurable value.

But, let’s look at the goal of ‘finding more customers’. What if you look at the obstacle—a business doesn’t have enough customers. Finding more customers creates questions like, who is the ideal customer? Where do I find them? How do I get them to become customers?

The problem of not having enough customers, on the other hand, asks different questions. Why don’t I have enough customers? Why do they choose a competitor product or service? How do I add more value than the competitor they chose currently? Do we effectively communicate the value we deliver? How do I persuade them to become a customer?

These are the questions that need to be answered in order to build an effective strategy designed to solve the problem of a shortage of customers.

But few companies want to suggest that a strategy might fail. It’s bad for business. This is not exclusive to my industry but by failing to address obstacles to success a strategy is almost doomed to fail.

How long should a strategy last?

Rumelt makes the point that strategies are often timescale dependent. The conventional logic across many industries is that a strategy should be annual. The problem is that the conventional logic makes no sense when it comes to startups and small businesses. Many businesses fail within the first year of trading; most fail before the end of year two.

PR and marketing strategies are traditionally based on a fixed-term agency engagement of 3, 6 or 12 months with very little review in between. You do a pre-prescribed series of activities—most PR and marketing “strategies” are comprised of the same tactics, presented in differing orders or volumes.

Strategy is episodic

In Good Strategy Bad Strategy Rumelt says the need for strategy is episodic, rather than time-based and this is what I’ve found works best for public relations and marketing strategies for startups and small businesses. The length of a strategy should be determined by the obstacles being overcome in order to achieve a specific outcome. They key is to move forward as quickly as possible and to identify when a strategy isn’t working as quickly as possible so that it can be reconsidered and redesigned. A new obstacle requires a strategy to be tweaked to accommodate a new potential cause of failure.

While working with hundreds of startups and small businesses over the last 20 years I’ve found setting a goal of between 7 and 90 days appears to work best. It ensures a strategy remains relevant. It’s possible to see progress. In some cases progress can be measured within hours. If there is no progress within 90 days, action can be taken to course correct. The key is to set a reasonable timescale based on your current position and the intended destination.

Strategic reviews should take place at any point something significant occurs; any time something changes either the effectiveness of the strategy to overcome the obstacle or the desired outcome changes. This ensures that it is still fit for the purpose it was created.

Key elements of a PR and marketing strategy

I hear so many different definitions of PR and marketing, from both entrepreneurs and professionals who work in the industry, to render the terms almost useless. I’ve started to use the terms ‘relationships’, ‘actions’ and ‘awareness’. Public relations is about building and maintaining mutually-beneficial relationships with key stakeholders. Marketing is about compelling these key relationships to take an action. Publicity is about communicating at scale (usually with people with whom you have built a relationship).

A PR and marketing strategy is, after all, a business strategy. It just focuses on three areas: building actionable relationships, compelling commercially-valuable actions and communication at scale.

A public relations strategy needs to include the key relationships needed to overcome a specific obstacle; a mutual benefit; information on timing opportunities or threats; and the mechanism through which relationships can best be built.

A marketing strategy requires you to outline how you differentiate from the competition, the action you need the people you’ve built relationships with in order to achieve your desired outcome to take, any timing issues that may increase or decrease the chances of an action being taken, and how you’re going to make a call to action.

A publicity strategy will detail the people you’re communicating with, the mechanism you think is best for communicating with them and any timing issues relating to communicating a specific message.

In all cases, an overview of the obstacle that needs to be overcome is critical. It frames the strategy and also highlights one of the key metrics on which success or failure relies. Part of measuring progress and success should be to determine whether the obstacle has been overcome.

I’ve read—and re-read—Ryan Holiday’s The Obstacle Is The Way which offers both aspiring and seasoned entrepreneurs valuable insight into using obstacles as a key element in developing strategies to overcome them.

Measure strategic success episodically

Measuring the success of strategy has typically been done by an ultimate goal. But that doesn’t necessarily serve entrepreneurs well, for many of the reasons I’ve discussed. In the same way the growth of a business isn’t a straight line—or  a hockey stick–graph, so the success of a strategy is not about the ultimate goal.

By building strategies episodically around overcoming obstacles in the pursuit of a goal, it is possible to measure progress. It’s rare to develop a strategy that survives 90 days untouched—let alone longer. In reality, a startup or small business strategy rarely lasts 30 days without something external to the business changing. A new product launched by a competitor or new market conditions, new legislation or by-laws, a price drop (or an increase) caused by changes to the cost of raw materials or an operational problem.

In all cases, an overview of the obstacle that needs to be overcome is critical. It frames the strategy and also highlights one of the key metrics on which success or failure relies and allows changes to be made to the strategy an organization is executing. At the same time it enables progress towards a stated goal to be measured.

What’s your next obstacle?

So, as you sit down to review your current strategy, think not only about the goal, but about the obstacle/s that need to be overcome in order to achieve it. By developing a specific, episodic, strategy to overcome it that can be measured within 30-90 days you will not only allow you to track progress and make course corrections but also increase the chances of successfully achieving your ultimate commercial goal.

Lyndon Johnson is the Founder and General Manager of COMMS.BAR™—a Toronto-based walk-in communications clinic offering affordable, accessible, transparent and measurable public relations and marketing advice for entrepreneurs. He is the inventor of the Lean Communications Methodology™.

Before becoming an entrepreneur, Lyndon spent more than 10 years working in communications agencies in London, England. He started his career working as a broadcast journalist.

Growth strategy stock photo by Monster Ztudio/Shutterstock

The post How to Build an Effective Growth Strategy appeared first on SmallBizDaily.

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