Achieving strategic growth can be challenging for any leadership team, no matter how experienced or well-informed. If having a foolproof plan and executing it perfectly is not daunting enough, plenty of internal and external factors come into play and can easily deter a business’s plans for success. Whether you’re a business owner, entrepreneur, or manager, this blog post will provide valuable insights and strategies that you can use to help your company scale successfully. Read on as we discuss the top seven factors that influence strategic growth for a business and offer tips on how to use them to your advantage.
What is strategic growth?
Strategic growth is the process of planning and executing a detailed plan to achieve your business goals. Growth with intention means that the organization has adequately researched what it wants to achieve and is taking actionable steps to get there. Strategic growth involves multiple moving parts, including a focus on areas such as strategic marketing, finance, operations, and more.
So what are the key factors that influence strategic growth and help determine a company’s ability to scale?
1) Core Values
Everything a company does should reflect its core values. Your core values are the root of all business functions, from picking goals to hiring talent. They are the fundamental beliefs that guide the actions and decisions of the organization and serve as the foundation for the company’s purpose. Core values clarify the direction a company is heading, and ensure that all team members are aligned around the same beliefs.
Core values also support the development of the company’s competitive strategy, and the actions and tactics it employs to achieve its goals. By aligning its actions with its core values, a company can build a strong reputation and establish trust with its customers, employees, and other stakeholders, which can be a key driver of strategic growth. Overall, a company’s core values can be seen as the guiding principles that shape its strategy and enable sustainable growth over time.
Choosing your core values provides an opportunity to be unique and set your company apart from its competitors. For example, one of our favorite core values at Align is “Get Sh!t Done,” And boy, we do our best to live by it.
In the famous words of John C. Maxwell, “A leader is someone who knows the way, goes the way, and shows the way.”
Effective leaders are able to anticipate and adapt to changes in the market, industry, and internal and external environment, and use insights to make smart executive decisions that drive the company forward. They also foster a culture of continuous learning and improvement, which plays on the strengths of the individuals working in the business. This positive encouragement comes full circle by building employees into effective leaders themselves and developing a headstrong approach to strategic growth.
According to a recent study, 83% of organizations believe it’s important to develop leaders at every level of the company, but only 5% of businesses have implemented leadership development at all levels. It’s easy to overlook your entry and mid-level employees when focusing on leadership growth, but remember that a scalable company is one with scalable people, and scaling your people will get you closer to your end goal.
3) Strategic Planning
Some would argue that the strategic plan is the most telling factor of a company’s scalability. Planning involves identifying goals and objectives and developing a detailed blueprint to achieve them. To plan accurately, companies must be able to analyze their current situation and determine how they will get where they want to be by breaking down the journey into actionable steps. Most companies start with a SWOT Analysis.
The strategic planning process can be more easily digested by enlisting help from an outside source, like a business coach. Several business leaders do not include the rest of the team in facilitating strategic planning, but this could be a costly mistake. Involving your employees helps align the whole team’s efforts toward a common goal, increasing productivity and efficiency. This also helps fill in gaps that can be easily overlooked by CEOs attempting to create the whole plan themselves without other insight. This does not mean you need to grant employees autonomy over company objectives, but practicing transparency and giving them a voice can only bring positive results.
Strategic planning can also help a company identify and pursue growth opportunities, such as entering new markets or developing new products or services. Technologies and SaaS tools can also improve the strategic planning process and ensure you are on the right track. Overall, strategic planning is an important tool for influencing a company’s strategic growth and ensuring its long-term success.
No matter how bulletproof your strategic plan is, it won’t pay off unless you properly set that plan into action. A proper execution process can help drive strategic growth for a business by ensuring that the necessary actions are taken to achieve the desired results.
Your execution process should include specific steps centered around communication, task delegation, and tracking and reporting. Below are some action items that should be included in your execution process:
- Assigning specific roles for achieving objectives
- Establishing a timeline for achieving objectives and regularly reviewing progress
- Allocating resources, including financial, human, and technological resources, to support the execution of the objectives
- Holding frequent meetings to communicate the objectives and progress to all employees and shareholders
- Identifying and mitigating potential risks that could impede the achievement of objectives
- Regularly reviewing and adjusting objectives as needed based on external factors and internal progress
- Continuously monitoring and measuring the performance of objectives and making adjustments as necessary
- Encouraging employee engagement, ownership, and empowerment to support the execution process
- Establishing a feedback and improvement loop to continuously improve the execution process
Your people are your best asset, but every experienced leader knows this asset can be the most difficult to influence. Though it has many definitions, company culture determines a set of core values, behaviors, and beliefs shared and practiced by a group of people. It is the shared way of thinking and working that reflects a company’s values and strategic vision.
A unifying culture promotes loyalty and can motivate employees to do their best work as they strive to reach organizational goals. Companies with a positive, supportive culture are more likely to engage their employees and customers, leading to increased productivity, revenue, and profitability.
According to a 2021 study by Lexington Law, nearly 70% of Americans value benefits and company culture over salaries. Research also shows that organizations with strong cultures experience higher customer retention rates, lower employee turnover rates, and greater job longevity.
Here are some ways that leaders can prioritize corporate culture:
- Promote transparency by keeping employees informed on updates and initiatives
- Encourage an open dialogue between management and employees
- Offer recognition and awards for individual accomplishments
- Participate in team-building activities
- Give employees autonomy and trust to make decisions within their job responsibilities
- Create opportunities for collaboration and knowledge sharing among team members
- Request and implement employee feedback and measure your Employer Net Promoter Score (eNPS)
6) Cash flow
Cash – It’s the only factor listed in this blog post that can make or break your business entirely on its own. For instance, if your strategy is failing, you can make up for it with your execution and flexibility. But if you fail to manage your cash correctly, not much can be done to make up for it, and your business can quickly suffer the consequences.
This is why managing your cash flow is possibly the most vital component to scale a business strategically. Cash flow determines a company’s ability to meet its financial obligations, invest in growth opportunities, and maintain a healthy balance sheet. Without adequate cash, a business may struggle to meet its short-term obligations, such as paying employees and suppliers and may be forced to borrow or dip into savings to stay afloat.
Companies can prioritize cash flow to drive strategic growth with the following tactics:
- Analyze spending and identify areas of improvement
- Monitor cash flow trends to anticipate future needs
- Optimize operational efficiency, primarily through automation
- Review pricing strategies regularly for potential adjustments
- Control inventory levels to prevent overstocking
- Utilize strategic partnerships with vendors and other businesses
- Leverage tax credits, deductions, and other financial incentives
An adaptable business is able to identify new trends, customer needs, and emerging technologies, and then adjust its strategy to take advantage of them. Being adaptable allows the business to stay competitive and drive profitability, even during times of uncertainty. From going fully remote due to a pandemic, to counting pennies in the face of a looming recession, resilience is a critical factor that determines a business’s ability to remain focused on growth.
If there is anything we’ve learned from previous years, it’s that your Plan B and C are just as important as your Plan A.
A clear and well-executed strategy is necessary to identify growth opportunities and set the direction for the business. However, strategy alone is not enough.
When the elements highlighted above are balanced, it’s easier to foster sustainable growth that leads to higher profits and increased value over time. If one is lagging, however, your business’ scalability as a whole could be at risk. By taking strategic actions to manage each of these components, companies can leverage the full potential of strategic growth to reach their goals.
To learn how software like Align can help you scale your business and turn various factors into strategic advantages, book your demo today.