7 Common But Ineffective Business Strategies You Need to Know
Opinions expressed by Entrepreneur contributors are their own.
“One of the biggest problems with strategy is that the business doesn’t have one.” It’s common to read this phrase in articles that aim to identify why a business strategy isn’t working.
And yet, every business has a strategy because strategy is about choices — and the team makes choices every day. The issue is that the choices they make do not advance the business.
Effective teams make deliberate choices so every action the business takes drives toward delivering the value the business exists to deliver.
Related: 7 Strategies Businesses Can Use to Be Profitable and Sustainable
Seven common but ineffective business strategies
Whether you’re consciously aware of it or not, you make choices based on something. That something and your choices serve as your strategy. Here are seven common but ineffective strategies you may have inadvertently adopted:
1. You’re reactive
Whether it’s a new idea, a raging fire or the ping in your inbox, you choose to act based on what hits you at that moment. I’ve made the mistake of saying this type of team isn’t strategic when I meant to say they aren’t deliberate. You’re likely pedaling at full steam but not going anywhere.
2. You do what you want to do
You build what you want to build. The quintessential example is a robotics company that wanted to build X even though all the input they received from their customers told them they needed Y. The company continued to build X because that’s what they wanted to build. Now, they don’t exist anymore. If you’re the only one reaping value, you have a hobby, not a business.
3. You do what you’ve always done
You know the approach works. You’re comfortable doing it. And you definitely don’t want the stress of changing it. So you keep on keepin’ on. Alas, too many businesses no longer exist because they failed to evolve. You must adapt what you do and how you do it because the world changes all the time.
4. You chase the new cool thing
Every day brings new priorities that start with emails like, “Check out how cool this is. We should do it.” Sometimes, you start a new thing because you enjoy creating. Sometimes, you do it because the new thing is simply more exciting than doing the hard work you actually need to do. Much like a reactive strategy, your team finds it hard to gain any traction or soothe their spinning heads.
5. You spend as little money as possible
You scrutinize every investment looking for the cheapest option, including what could be done for free. Slowly, sometimes glacially, no one wants to work on your team, and your business loses all the resources required to do, well, anything.
6. You go after the money
You see a way to get a lot of cash in the near term, so you immediately apply effort in that direction. Never mind what you were doing before. Never mind that you (somehow) want team members to keep doing that stuff, too. If you can put a check in the bank today, you’ll worry about tomorrow later. Unfortunately, you may not have a business tomorrow.
7. You pursue more
When someone asks for your strategy, you answer, “To be the biggest company in the world!” You pursue more markets, more users and more followers. When asked why, you say, “Because we need to be the biggest!” Your team has a tough time making choices and a high likelihood of running an unprofitable business.
Related: 5 Common Growth Strategy Mistakes and How You Can Fix Them
How to make better choices
It’s not that the companies making choices in any of these seven ways don’t have a strategy; they don’t have a particularly good strategy. They may even operate using a few of these strategies at once, which only compounds the negative effects.
New businesses launch every day. We can create products and services faster than ever before. And soon, production will come at pennies on the dollar. The only way to thrive is to focus on delivering meaningful value.
Define the value you deliver by engaging the people you serve. Then make choices so everything you do as a business drives toward delivering that value. To succeed, you’ll need to assess how your choices work — i.e., how effectively they deliver value — and adjust accordingly.
Routinely gather input from the people you serve, your team and the external environment, so you’re positioned to evolve your business as value shifts, your team grows and the world changes.
You and your team make choices every day. You choose to hold this meeting, adopt this software or launch this product. You need to make deliberate choices that advance your ability to effectively deliver value. The choices you make — and what you base them on — define your strategy. And like so many things, some strategies work better than others.
