How to Develop Better Internal Strategy – The Complete Guide

Now that we have diagnosed the challenge and created a guiding policy, it’s time to put everything together. Before we do, let’s look at some things not to do:

· Create a list of unrealistic or general goals
· Focus too short term or too long term
· Use any set of numbers to build a strategy

These are just a few mistakes companies make. Setting goals such as 10% growth or 20% customer satisfaction are not efficient coherent actions. One should ask: How do I reach 10% growth or achieve a 20% increase in customer satisfaction by utilizing my competitive advantage? Do I need to decentralize my company? Do I need to invest in R&D? Should there be more communication between departments? This will vary with industry or company. The important thing to remember is exactly how you are going to achieve superior results.

There are a few ways to get started. Let’s use an example of a small marketing firm that is attempting to raise its profitability by 10%. First, this is a goal with no foundation, so we will adjust it and think about what they do better or cheaper than anyone else. If content marketing is their answer, then that’s where they should focus. If you believe you can create an advantage in another area, you may need to make an investment. For example, you can focus on employee training in a particular area or hire externally. What’s important is that you need to be able to demonstrate to your customers that you can do something better or cheaper than everyone else. Even more importantly, you and all your employees need to believe it.

So what is it that you do better than everyone else?

· Low cost?
· Differentiation?

If it’s low cost, it’s a little more straightforward. They could add automation, hire students as interns, have employees work from home, take advantage of online meetings, or develop software that may have a high fixed cost but will save money over time.

If it’s differentiation, then let’s think about how to deliver more value to the customer. Maybe opening an office internationally with local staff will allow your company to gain insight into local customers. Perhaps hiring or training employees for specific skills will create more value. Maybe it’s using more case managers to work with important clients or more flexible teams. It will depend on the problem you’re trying to solve and your industry but the important thing is to do it better than anyone else.

Once you’ve created these actions, pitch them to your staff or other advisors. They may have on-the-ground insights. Some of the best suggestions will come from people who interact with your customers daily. More importantly, let them speak first and listen with an open mind. They will have ideas that can and will help. If you go first, they may be reluctant to speak their minds. It’s not to say that you must use every suggestion and you may even have push back, but allowing others to be a part of your strategy will create a sense of importance throughout the company. Everyone has to be on board with the message developed at the top and this set of actions must be clear throughout the organization.

Case study: Mcdonald’s

Here is an example from McDonald’s’ corporate website. “Our mission is to make delicious feel-good moments easy for everyone.” McDonald’s has assumed that by pulling on the heartstrings of the public, they can combine feel-good jargon with a business idea. Including “delicious” gives you an idea of what the company is about but other than that, there isn’t much to go on.

This type of generic vision does not give employees, investors, or even customers an idea of what the business is trying to do. However, if you look at an annual report, you get a little closer to what this company is about. Here is a short segment: “By leveraging ‘the System’, McDonald’s can identify, implement and scale ideas that meet customers' changing needs and preferences.” A lot of jargon again, yes, but it does get closer to defining its competitive advantage. McDonald’s refers to a combination of franchises, supply chain, and other advantages as “the System.” Relying on an amazingly strong supply chain allows them to standardize certain products around the world while also allowing customization in certain areas. The company can do this at a rock bottom cost. Basically, we are looking at an unbeatable supply chain and the lowest costs. It’s no wonder the company has been so successful and it’s also easy to see why McDonald’s can charge a few dollars for their products while smaller businesses must charge much more.

Still, we would almost like to see something along the lines of “Putting a McDonalds’ product on the plate of everyone around the globe once a week for the lowest possible cost.” Although incredibly ambitious, this kind of statement creates direction. It is something everyone in the company can strive towards and should be what the CEO is talking about in the boardroom. Every conversation now starts with “How can we get people to eat more burgers and keep the lowest cost?” This isn’t meant to pick on McDonald’s and if you look at almost any company, you’ll see the same type of generic vision. So, let’s step back and take a look at a company that was once seen as a small start-up with an ambitious goal.