Differentiated strategy?

“Scaling up” a company is very difficult. Verne Harnish indicated in his excellent book “Scaling Up” that creating a “truly differentiated strategy” is one of the four key items that the directors and CEO need to ensure has been implemented within the company.

“Strategy” refers to the blueprint that relates to what the company is trying to achieve. The generally accepted practice even for very small companies is to have a written Business Plan, which is reviewed at least annually.

The Business Plan should not become a “forgotten document” that is filed away and never looked at again. At each directors or Board of Advice meeting, an overview should be presented relating to the progress made in implementing the strategies outlined in the company’s Business Plan.

The Business Plan on its own is “a lot of words”. The accompanying document for a Business Plan is the “financial interpretation” of the Business Plan – the “Predictive Accounting Process”, which relates to:

• Budgets

• Key Drivers of subaccounts: inventory, debtors, creditors, capital expenditure

• Cash Flow Forecasts

• Projected Balance Sheets

These documents express in the strategies outlined in the Business Plan in “financial terms”.

Each of these component documents are very important in outlining the strategies of the business, but probably the most important is the “Projected Balance Sheet”, because this document illustrates to the directors and leadership team what the end financial result is expected to be from the strategies outlined in the Business Plan.

The pursuit of a “truly differentiated strategy” enables processes, systems, the rhythm of meetings and team training to be all part of ensuring that the responsibility for the management of the company is not centred on just one person, but is distributed through the leadership team and other team members, which will encourage the adoption of the “differentiated strategy” as the mantra for “how we do business in this company”.

Towers Business Development can assist with the development of a “differentiated strategy for your company”. To find out more, contact 1800 232 088 or email .