How to Rethink Your Business Strategy for Sustainable Growth
The events of 2020 have been enough for businesses across industries to rethink a lot of things. From reimagining the use of office space to exploring leadership changes, companies around the world are making strategic changes to their business operations.
Many businesses have been thriving in 2020. Cleaning companies, grocery delivery services, liquor stores, and landscaping companies have been busy over the last several months because they offer products and services that can help people who are stuck at home.
Other businesses have not been so fortunate. A recent economic report from Yelp shows that nearly 100,000 businesses that shut down temporarily in the spring of 2020 have now been forced to close for good.
As an entrepreneur, you have undoubtedly come across new challenges in 2020. You may be wondering how or if your business can make it through 2021, as the unknowns in the business world continue to pile up. Or, you could find yourself with more business than you know how to handle and are struggling to make decisions about hiring or making capital investments. Not knowing what the future holds can be extremely stressful, no matter what industry you are in.
Instead of worrying about things you can’t control, carve out some time to rethink things that you can control — pivoting your business strategy so that you can continue operating now and in the future at a sustainable rate might be just what your company needs to not only get through 2021 but to come out of it stronger than ever.
Defining Sustainable Growth
The easiest way to think about sustainable growth is that it’s the rate at which your business can continue growing without running into any issues. If you grow too fast, you might run out of funding or be unable to keep up with customer demand. If you grow too slow, you’ll stagnate and become irrelevant over time. Sustainable growth is the sweet spot that allows you to grow at a rate where you can provide exceptional service and value to your customers while still remaining relevant and adaptable.
3 Ways to Rethink Your Business Strategy for Sustainable Growth
There comes a time in every business when the original strategy needs to be revisited. Whether you are a few months into your business venture or have been an entrepreneur for decades, it is worth taking the time to rethink your business strategy to ensure sustainable growth. Here are a few ways to do it.
1. Get Familiar with Your Business
Sure, you know the essentials about your business, like what your company does and who it serves and employs. But, when was the last time you took a good, hard look at your business to understand how your operations compare with your original vision?
It’s easy to get bogged down in the day-to-day details. However, introspection is good for business owners. Some things to review include:
● Culture: Are people happy to work here? What are some of the biggest challenges your employees face every day?
● Vision: How does your vision match up with the realities of your operations?
● Core competencies: What are you better at than anyone else? What other opportunities can you develop into a core competency?
● Risk assessment: What threats could tank your business? It could be new competitors, new technologies, a change in the market, or anything else that could suddenly cause a drop in revenue.
● Financials: Are you able to keep up with the costs of running your business, or are you spending more than you are bringing in? Be honest. If you are overspending, you will need to find ways to cut back or earn more revenue.
2. Review and Update Your Business Model
Many business owners get out of the habit of checking in with their business model to make changes and adjustments over time. They write it, use it for funding purposes or to engage key stakeholders, then forget about it.
Now’s the time to review and rethink your business model, considering more than just the financial aspect. As David J. Teece explains, the business model shouldn’t just be a financial statement, but rather a conceptual model of the business. Your business model is fluid. The concepts defined within it should evolve as your business grows.
When updating your business model, consider growth strategies and ask these questions:
● Could you create partnerships that would provide more stability or allow you to broaden your offerings?
● What are your customers demanding that you could deliver to improve their experience and allow you to grow the business?
● What gives you a competitive advantage over other companies in your industry?
3. Think Like a Designer
Getting input from all stakeholders is essential when you are rethinking your business strategy. However, as you are likely aware, trying to define a strategy with stakeholders who come from various backgrounds and worldviews can be challenging.
The method of “Foresight by Design” proposed by researchers Jörn Bühring and Jeanne Liedtka can be useful here. In their Foresight by Design model, stakeholders work together to consider different future scenarios and their outcomes, taking an objective approach to envisioning the future based on real-world risks. They then look at future scenarios more subjectively, taking a human-centered approach to consider how changes will personally impact customers, employees, and other stakeholders.
The researchers propose that this model can help strategic planners foster innovation by “detecting early warning signs of change and giving deeper insights into the phenomenon behind these changes.” By combining Foresight’s objective techniques with the more subjective and human-centric focus of Design, the Foresight by Design model can give business owners clarity and enhance strategic planning.
It’s tempting to think short-term when you’re trying to figure out how to pivot your business strategy. However, you will be better off in the long run if you look for opportunities for sustainable growth instead of just focusing on the next 12 months. Taking a close look at your business and accounting for both objective and subjective viewpoints can help you rethink your business strategy and achieve sustainable growth.