When developing a business strategy, ‘why’ is the most important question to keep revisiting. Why does your business exist and are you being true to your vision? Why are you choosing one action over another? Strategy is about long term planning, and provides the framework for the activities of the entire business. It’s very easy to get immersed in the practical details – what you do and how you do it – the operational aspects of activities, staffing, resources, financials. Without understanding your purpose, why your business exists, there is a risk that your focus on the details will divert you from your original vision.
Most innovative start-ups start by recognising that they have can solve a problem better than anyone else, creating a unique business opportunity. A good strategy will focus on satisfying customer needs, but there is more to consider around why that problem is important to you.
Without a good understanding of why you are making the decisions that you do, it can be easy to lose motivation and for the long term direction of the company to drift.
Purpose and valuesClosely aligned, it is important to define them in any business, large or small.
Some entrepreneurs may be very clear on their motivation to start a business, driven by what is important to them and and their own personal values. Others, having recognised an opportunity, may be more focused on taking action without really reflecting on how the business opportunity fits with what is important to them as individuals and on society at large.
More established companies may have started with a very clear proposition, but over time could have moved a long way from its initial position, as it pursues growth and profit. If they continue to be successful, does having a clear purpose really matter? The attitudes of customers and stakeholders change over time, so it is prudent for any company to review its strategy on a regular basis, ensuring that their values remain in step with the times.
I’ve recently returned from a holiday in the Outer Hebrides, where I took the opportunity to visit the Isle of Harris distillery. Its a great example of a small business with a clear purpose – to reverse the long term decline in the population of this magical island, by creating a new, sustainable business as a catalyst for positive change. Whilst producing gin and whisky is its primary business, its clearly defined purpose allows it to diversify into new areas and to support other local businesses too.
ESGEnvironment, Social and Governance
If you have already clearly defined your purpose and values, can you align them in a way that is meaningful to others? ESG is much more than the latest acronym to hit the Boardrooms. Its a way of demonstrating that a company can make a positive impact on the planet and on society, while still adding value to investors. Its a complex subject, and it is not always easy to measure performance, but by setting out genuine commitments your company will benefit by attracting passionate employees and loyal customers.
If you are new to the concept of ESG, a good place to start is with the United Nations Sustainable Development Goals (UN SDGs). There are 17 goals, with clear targets, and all of us can play a part in achieving them. Of course, not all of the goals will be relevant to you or your business, but they provide an excellent starting point. Identifying steps your company can take to contribute towards solving some of the world’s biggest challenges. Aligning your business activities with relevant SDGs will reinforce what is important to you, your employees, your customers and investors. It can also create exciting new business opportunities.
So why not ask yourself why?