6 Keys to a Successful Business Strategy in 2022
March 9, 2022
What are the keys to forming a successful business strategy? The answer is critical to the success of any business, and business owners and leaders who lack that knowledge will pay the price in lost profits.
Dr. Arati Srinivasan is an expert on the topic. She holds a Doctor of Business Administration (DBA) in Strategy and Innovation from Boston University. She has published research focused on the ways that technology intersects with business strategy and innovation in publications including Strategic Management Journal, Strategic Entrepreneurship Journal, and Academy of Management Perspectives and others.
As an Associate Professor of Management at Providence College School of Business she teaches courses on Strategic Management and Technology, and Innovation Management.
This April, she’ll be condensing her capstone course on business strategy into a single, supercharged 3-hour class as part of the 8-week virtual PC Micro MBA program at Providence College School of Continuing Education. Here, she shares a high-level view of some of the key concepts she’ll be sharing during the session.
What is business strategy, exactly? What does it consist of?
Well, when we look at that question of what we mean by strategy, what it is, and what do organizations and managers need to think about, it helps to look at examples of Fortune 500 companies. Many of them that existed 20 years ago don’t exist today. In my course, we use those examples to find what leads organizations to fail, and then we explore the details behind what strategy is and what it isn’t.
At a basic level, there are three elements that go into developing a good business strategy.
- The first is analysis. You need to be aware of environment in which you are operating, both internally and externally. In the course, we go into more detail about how to analyze the external environment and assess internal strengths and resources, but at a high level you want to look at the framework of your particular business environment and think about the internal and external factors that you can optimize to ensure you’re performing well against competitors.
- The second element is strategy formulation – the process of developing a strategy specifically designed for success within the environment you discovered in step one, given those external needs and internal resources.
- The third and final element is execution. A strategy is worthless unless you can execute it properly, of course, and there are some specific elements that you need for proper execution. I cover these in more detail in my class, but two of the most important are strong leadership and a strong organizational culture to ensure that all parts of the strategy are well understood and well connected.
What are some simple ways that business owners and leaders can begin to improve their business strategy? What are common challenges to prepare for?
One challenge to prepare for and avoid is the tendency to have attribution bias. When things are going right we tend to look inside the organization and attribute the success to what’s happening there, but when things go wrong we tend to attribute that to external forces that we feel are beyond our control, like the economy or current events. That is a misconception. There can be external factors beyond our control of course, but it’s really how we manage the internal factors that are within our control in response to those external factors that ultimately determines success.
Another key thing to understand is the difference between strategy and planning. Most people assume they’re the same, but they are fundamentally different. Strategy is about the big picture – how are we going to compete, how are we going to differentiate, what is our competitive advantage. Whereas planning is the specific ways we will achieve the strategic goals, like “We will grow our staffing by 10% in the next five years.” Plans need to follow from strategy.
Finally, people often think of strategy as being something restricted to senior managers, but it’s also part of middle management, in the aspect of being able to make sound decisions in carrying out the plan that was formed based on the strategy. So decision making skills are something we also cover in my class – how to make decisions when faced with challenges in the internal or external environment. We also focus on problem solving – how do you work across business functions to be able to deal with these problems?
That’s really what sets the strategy class apart from the other seven classes in the Micro MBA Program – it’s not looking at one aspect like finance or marketing but how each of the individual functions work together to hep an organization drive performance.
Technology is certainly a very big part of any business these days, particularly when it comes to innovation. How did you become interested in this particular facet of business, and what are some of the major ways that you see it unfolding?
This has been my area of research since I started my PhD. I have an undergraduate degree in engineering and was always interested in the technology space, so when I pursued my MS in Engineering, I chose to focus my thesis on the role of technology in driving efficiencies in the textile industry. As I pursued my MBA and then my PhD, I again chose to focus on information technology systems.
But two years into the PhD program, I realized that it wasn’t only about the underlying technologies themselves but also the strategy, and how organizations could use technology to drive competitive advantage. I found that particular aspect fascinating, and so decided to switch my PhD focus from information systems to strategy and innovation. I’ve since been focused on how companies have used technology to develop new business models such as platforms to create greater value for themselves.
A big part of the external environment for business today is that technology is evolving so rapidly, and that’s also changing the competitive environment rapidly as well. Companies have to understand that technology is going to be the biggest driver of change; a lot of companies have failed because technology lowered barriers to entry for other newcomers and they weren’t prepared. For example, Tesla is a good example of a company that used technology to disrupt the auto industry. This is a very large topic, but we do touch briefly upon technology as a disruptor in the business environment in the Micro MBA class.
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