Having purpose

Its a sign – arrow in the sky, Lewis, Outer Hebrides

Why?

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 values

Closely 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.

ESG

Environment, 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?

In praise of ‘daft lassie’ questions

Have you ever been in a meeting where someone is using business acronyms or technical terminology, and everyone seems to know what it means except you? I certainly have. What do you do in that situation?

What are they talking about?
  1. Nod in apparent agreement and make notes, whilst trying to figure out what they mean
  2. Doodle whilst your mind wanders randomly though other topics, like when are they going to break for lunch, or why is there a picture of a worried dog on the screen
  3. Bravely put your hand up, admit you don’t understand and ask for clarification.

If you answered 3, well done. Not only will you be in a much better place to make a valid contribution to the meeting, but I guarantee you that several people will come up to you afterwards and quietly thank you for asking, as they didn’t understand either.

The daft lassie (or laddie) question isn’t just about admitting you don’t know something in a meeting, however valuable that might be in increasing your understanding of a subject. It also has a very important role to play in developing a robust business strategy, and so the ability to ask them is a very useful skill.

The art of ‘daft lassie’ strategic questioning

Creating a business strategy is an all-consuming task, whether it is for launching a new business or exploring new opportunities for an existing business. After spending many weeks on the plan, it’s likely to be very detailed and every aspect will be familiar to you. At this stage, it is important to step back and take a look at the whole plan with fresh eyes. What questions would you expect to be asked? Be honest with yourself about what assumptions you have made along the way, and how many of these assumptions you have incorporated into your plan without fully understanding the implications. Before you take your plan to your potential investors, you should ask one or two people you trust to review your proposition. This could be a non-executive Board member or an honest and forthright advisor.

In order to challenge your assumptions and stress test your plan, a good assessor will put any prior knowledge aside and ask you lots of questions, never assuming anything that is not explicitly explained in your plan. It can be particularly useful to involve someone who may not be fully cognisant of your sector but knows what makes a robust and effective strategic plan. They tend to ask the best ‘daft lassie/laddie’ questions and can expose the technical language that you may have used that could make your strategy harder for a potential funder or new business partner to understand.

What, why, who, where, how, when?

If you can answer all of their questions, well done. It is much more likely, however, that the questioning will have unearthed details or opportunities that you had not already considered. If so, what assumptions did you make that need to be backed up with additional information? Do you need to undertake some more technical or market research or can you test the market with your first prototype product or service?

Now revisit your plan and take a final opportunity to improve the clarity of your strategy. Strip out unnecessary jargon and make sure you explain any remaining technical terminology and methodology. Above all, make sure you have not overlooked the basics of what problem you are solving, and for whom.