Business strategy is a function that has often been reserved to specialists, hired by CEOs to help them with external analysis. The CEOs would then take that analysis and develop a path for the organization or any one of its products. However, the most effective strategy is really a discipline, not a business plan, which helps leaders in any organization to identify and realize the purpose of the organization. A good strategist engages in a conversation about the purpose of a company and asks questions like "what will this company be and why will it matter? Why would the world need this business? What would be different if it didn't exist?"
Recommended Reading
Harvard Business School's Cynthia Montgomery dives deeper into this premise in her book The Strategist: Be the Leader Your Business Needs (HarperBusiness 2012). The book is essential reading for any entrepreneur-minded CEO and every organizational leader. What is particularly astounding is how well the most successful CEOs are able to confront the gap between the high standards they develop for others' strategies as well as their own.
As a general counsel to many companies of various sizes, I have found, in all honesty, that it's much easier to stand outside of a business and analyze its position or offer advice. It really takes guts to face your own organizational challenges and to make decisions that change the course of a company. The challenge lies in being able to apply that criticism and the same high standards we use when we analyze other companies to our own businesses. In Cynthia's words, an executive must become "an architect of organizational purpose."
Tips for being a Better Strategist:
Here are some tips for any entrepreneur or organizational leader who is interesting in sharpening their business strategy skills:
Be creative. Analytical thinking doesn't work in a vacuum. A successful leader will rely on intuition and idea generation as much as (and perhaps more) than analysis.
Rely on a team of trusted advisors. Successful leaders and CEOs all have a team of trusted advisors behind them, all of whom challenge their ideas and positions on a regular basis. Invite these challenges so that you can understand the full spectrum and effect your idea has and whether it is consistent with the organization's purpose.
Be persistent and take risks. The best strategy means nothing if it isn't executed well. Just think of all of the different business that exist in the same verticals and offer almost identical products. How can so many different businesses, with seemingly little product differentiations, exist simultaneously? Hard work and creativity! That's how.
Develop animated ideas. Ideas evolve from a state of mind. If that mind is open to change and constant evolution, then the stage will be set for iteration, adjustments, and redefining the business as a whole. Ikea's Ingvar Kampradwouldn't have launched the Ikea that we know if he hadn't been forced to try on different business models, not just implement incremental shifts in his original plan.
Christina Henderson, The Bureau of Business and Economic Research
Christina joined the The Bureau of Business and Economic Research in 2011 as Marketing Director. She served previously as director of the Delta County Economic Development Alliance in Escanaba, Michigan and she has many years of experience from working as marketing consultant.
A common problem facing many firms, regardless of where they are in the company lifecycle, is that they get stuck in the trenches of daily operations, at the cost of conducting business development activities. When strategy and competitive advantage are no longer on top of the agenda, focus is lost and to the detriment of sustainable growth. The balance between running day-to-day operations and continuously developing the business further to hone the competitive advantage a firm holds is indeed difficult to manage. For that reason, there are a multitude of professional service providers in the field of business development. From the birth of ideas to early startups, to small and medium enterprises (SMEs) who seek second stage growth, and all they way to strategy implementation for corporate giants, many institutions exist to support firms in their business development efforts.
There are both niche specialists targeting specific business needs and generalists taking a 360° view of the firm and its strategy and objectives. They come in the form of governmental institutions providing funding and support to entrepreneurs, and private institutions in the form of business angels and venture capitalists, business incubators and seed accelerators, second stage business accelerators, boutique consultancy firms, and large management consulting houses. One way or another, these institutions interact with companies on their growth journey and provide all kinds of resources to support them, including funding and physical work spaces (offices), professional support, advice and mentoring, tools and frameworks, strategy development and operations efficiency, and access to important networks in the business ecosystem.
In the table below a classification of business development institutions are plotted out, based on the various stages in the company life cycle. While there of course exist much overlap between of these fields, it gives an idea of who, how, when and for whom various actors interact with firms on their path to growth.
Business Incubator
The idea of the business incubator is to provide support for the successful development of companies by means of an array of support resources and services, offering a nurturing environment where entrepreneurs can bring their ideas to life. Incubator services often include one or several of the following:
Shared office space
Marketing assistance
Accounting/financial management
Access to bank loans, loan funds and guarantee programs
Help with presentation skills
Business networks and links to strategic partners
Access to angel investors, venture capital and debt financing
Comprehensive business training programs
Advisory boards and mentors
Management team identification
Technology commercialization assistance
Help with regulatory compliance
Intellectual property management
The idea is to allow entrepreneurs and start-up teams to focus on their core value proposition and leverage key resources that a growing start-up needs. Incubators often employ a selective screening process assessing the feasibility and workability of the business plan of incubatee prospects before letting hem join the program. While many incubator programs are industry agnostic, 39% of incubators in the United States work only with the high-tech sector. A company spends varying amounts of time in an incubation program depending the type of business and the entrepreneur's level of business expertise. For example, life science and other firms with R&D cycles require more time in an incubation program service companies. On average, incubator clients spend 33 months in a program.1Oftentimes, graduation requirements are set by development benchmarks rather than time, such as revenues or number of employees. The successful graduation from a business incubation program typically increases the likelihood that a startup company will stay in business for the long term.
Seed Accelerators / Startup Accelerator Programs
The Seed Accelerator derives much of its characteristics from the business incubator; their services often include pre-seed investments (usually in exchange for equity) and the focus is on business model innovation. In contrast to an incubator, the seed accelerator views the startup period as short, and startups are often supported in cohort batches or ‘classes’ during a seed acceleration program. But accelerators are not considered “protected” nurturing environments, like the business incubator. They bring together entrepreneurs, mentors, and advisors and leave it to the entrepreneurs to figure out how to best take advantage of the opportunity that emerges. Being selected by a seed accelerator often brings notoriety to a firm, and it is a way to quickly create momentum in a startup, as long as the participants have the experience and drive necessary. Often, participants in seed accelerator programs are experienced startup professionals who are accustomed to the process.The assets provided by the seed accelrator come in the form of mentoring, funding and a strong network effect, but there are few or no internal resources, such as back office support functions, internal marketing or legal advisory experts or legal. It is a sink or swim environment.
Second Stage Business Accelerator
Second stage business accelerator services are very different from those of both incubators and seed accelerators. A second stage business accelerator can be thought of a management consulting firm targeting established SMEs looking to boost performance and ensure a continuous and sustainable growth path. Whether young or old, many companies sooner or later plateau in terms of revenue, and the growth bottlenecks vary greatly between organizations. One classic hold-up is the entrepreneur / founder who insists on having a finger in the pie across all decision and actions taken by the company - a sign that the company since long has outgrown the governance structure still in place.
A second stage business acceleration program typically lasts between 3-6 months and it is aimed to assess and improve the entire “business machinery” that a growing organization needs to have in place to succeed. Strategic focus, institutional strengthening, human resource training and financial strategy, are some of the dimensions that a second stage business accelerator may offer. The business accelerator’s emphasis is on accelerated and sustainable growth, and to eliminate organizational, operational, and strategic bottlenecks that prevent the client firm from growing. In essence, a second stage accelerator bears a strong resemblance to traditional management consulting firms, but adjusted to fulfill the needs of SME’s.
Boutique Consulting Firms
Boutique consulting firms offer organizations highly specialized advice that addresses specific problems or aspects of a business. The overall objective is to improve efficiency and increase profits, and the term "boutique" has more to do with the firm’s focus than with its actual size. One firm may consist of a single advisor, while another may have 200+ consultants employed. More specifically, "boutique" most often refers to the niches in which it offers its services. Examples of niches in which boutique consulting firms operate include human resources and staffing, IT, healthcare, business process outsourcing, and accounting. These firms tend to work with private sector companies but also with governmental institutions and nonprofits.
Overall, boutique consulting firms focus on a limited scope of industries, and resolve business issues quicker than large management consulting firms that require more time for a specific project. The solutions that boutique consultants offer also have more immediate impact.
Large Management Consulting Firms
Large management consulting firms offer a more diverse set of services compared to boutique consulting firms and are often international in scope. They target publicly held or large private companies, international conglomerates, international nonprofits, and governmental bodies. Large management consulting firms are able to draw from massive reservoirs of overlapping knowledge and expertise in contrast to the more narrowly focused boutique consulting firms, and can offer a single client support on IT, strategy, operational, human capital, and financial issues. Moreover, they create industry “best practices” by working across a wide range of industries and firms (though it is debatable to what extent such practices are transferable from one organization to another). Yet, management consulting has long been a booming market with numerous players, both large and small, offering their advice to firms.
At IMPULSA BUSINESS ACCELERATOR we specialize in delivering first-class management consulting to high-growth potential SMEs at very affordable rates.
- “I do biz dev”, you hear people say frequently. But yes, business development is indeed something that one can do, and the actors of business development are called Business Developers. Business developers can be internal employees hired to identify and expand a company´s business, and their strength lies in their deep insight into the organization they work for. On the other hand, there are external professional service providers, such as management consultants, who leverage their experience from helping other companies develop, identify, and execute growth opportunities. Individuals of this professional breed are usually generalists by nature with the skills and know-how to collaborate and integrate knowledge and feedback from a company´s functional units such as sales, marketing, R&D, operations, and finance, and in turn synthesize that information into actionable roadmaps, also called business plans. The business plan can be thought of as a formal statement of a set of organizational goals, including the motivations and criteria for why they are attainable, and a plan for reaching the goals. The tools and methods utilized by business developers are countless, yet the objective remains to answer one fundamental question: “How do we make money?”
While business developers work to address how firms can sell more of their products or services and make more money both today and tomorrow, business development activities are typically skewed towards forthcoming business opportunities and strategy. Many sales representatives claim to be business development professionals, but this does not fully capture what business development is. One of the principal activities a business developer does is identify new opportunities. To do so, the business developer must have insight into a range of business related fields, and have access to key information that can allow new parallels to be drawn. First of all, he/she must hold a fundamental understanding of the company in question, stay abreast of industry trends, and monitor the competition. Secondly, but perhaps more importantly, the business developer must be able to take a holistic perspective, use his/her intuition when analyzing results, and show proof of creativity and ingenuity when synthetizing information in order to conclude which next steps the business should take.
Working in business development is an excellent way to develop skills in strategy, negotiations, and managing partner and client relationships. Moreover, the job of a business developer is highly cross functional, as it requires collaboration with various internal and partner-company teams such as sales, engineering, and marketing to ensure that a deal is consummated. Last but not least, if done well, business development can have an incredible impact on the success of a business.
At IMPULSA we specialize in delivering first-class management consulting to high-growth potential SMEs at very affordable rates.
TO LEARN MORE ABOUT IMPULSA'S SERVICE OFFERINGS VISIT www.impulsaxl.com
I have found that, just as a company gets solid traction in the market and starts to receive steady streams of revenue it gets sucked into the daily operations of running a business. At this critical time most incubator program ends and the company is on its own. At Impulsa Business Accelerator refer to this timeframe in the company lifecycle as thebusiness acceleration sweetspot, where business risk and mentoring needs slowly begin to decrease and and the potential for true value creation begins to materialize.
Here, the firm must make critical strategic decisions and identify its true competitive advantage, build solid institutional capabilities and organizational processes, develop and attract the right talent, and finally ensure access to sound financing for future growth.
Access to traditional sources of management consulting is out of reach for most small and medium sized businesses (SMEs). Yet, the impact and value such services can bring during the adolescent phase of the company lifecycle are immense. This is the phase during which true value is captured!
At IMPULSA we specialize in delivering first-class management consulting to high-growth potential SMEs at very affordable rates.
TO LEARN MORE ABOUT IMPULSA'S SERVICE OFFERINGS VISIT www.impulsaxl.com
The engagement letter is an extension of the proposal, as it serves as a contract and definition of services in support to the proposal. It should focus on legal issues, such as how to resolve any unforeseen disputes, necessary documents, payment terms, and legal obligations from both parties (though documents like a non-disclosure agreement should be a separate document entirely).
A good rule of thumb to follow is to use the modified proposal as the project management plan. The engagement letter ensures that both parties agree to the plan, and anticipate and resolve any legal issues that may surface, and should be signed by both parties.
The management consulting services proposal takes on many different names, including request for proposal, project scope statement, and project contract.
While a proposal may take many different names and forms, there are some items that must ALWAYS be included in the proposal. These items include:
1. Clearly defined roles for the consultant, management, and the staff. Before beginning, it is essential to determine who will be doing what, and why. This also helps give your consultant credibility with the staff.
2. A project scope statement, which defines what work will be done, and why it is being done. The scope should address root causes to the issues your organization faces to create long-term, sustained change.
3. Financial and time resources. The consultant and client should work together to decide upon a realistic time schedule that both parties can agree to, and a project budget. The budget should also describe benefits (such as per diem, travel, etc.) and guidelines if the project goes over-budget.
4. Project goals and objectives to make clear to all parties what will be accomplished, how, and why. Goals and objectives should be smart, measurable, attainable, realistic, and targeted (or SMART, if you prefer).
5. Grounds for the relationship between consultant and client. The client will get the most out of their consultant if they genuinely connect, and share one another’s best interests. Both parties should spell out what they expect from one another, and follow it to ensure a strong business relationship.
A strong proposal can very easily transform into a contract once both parties can agree on the details. A good rule of thumb is to follow the Project Management Institute’s structure for a project management plan. If the proposal is strong and both parties agree, they can move on to the management consulting services engagement letter.
Management consulting is a broad field, so it is difficult to create a single management consulting services definition. Some consultants specialize in a specific field, such as environmental engineering or search engine optimization, while some consultancies provide a full range of services, such as information technology, operations, and financial advising.
It is better to look at the purpose of management consulting to arrive at a definition. By definition, consultants are there to consult. They are brought in from outside because management typically needs assistance in solving complex problems that they may not have the expertise or time to solve. Therefore, management consultants provide a fresh point of view to problems, challenges, and situations that organizations face.
Put another way, management consultants are there to help your company overcome a pressing challenge that has been identified. When looking for a consultant, you want to find an individual or firm that has the skillset you need, has the time and resources to successfully complete your project, and has the ability to listen closely and diagnose your needs. When you believe you’ve found the right fit, the next step is to start creating a management consulting services proposal.
The performance of highly successful companies is higher than the performance of the average in the industry. Companies in the INC 500 index are growing almost 100 times faster than the overall economy? How is this possible? What do these companies have that others don’t?
We can look at the path to success for a company as a journey, in which the company goes through different stages and has to overcome a set of challenges:
1. Being Relevant
2. Identify Core Competitive Advantage
3. Build Institutional Capabilities
4. Develop Governance Structure
5. Innovate
The first challenge is becoming relevant to the market and being able to deliver value to its clients. Your customers need to perceive that you are adding value to them, making their lives easier with your products or services. To achieve relevance, your company needs tofocus on developing a clear value proposition and deliver it at its best. This is a very difficult stage in the life of a company where the financial focus is on breaking even and becoming cash-flow positive. Only 1 in 5 companies survive this stage. The good news is that companies that survive the being relevant phase generate substantial value to its owners, generating a sense of achievement, pride and economic independence. Good things are coming!
However, this sense of “bliss” is really an “Small and Medium Business (SMB) trap”. It is very easy to feel good about what has been achieved so far and hence stop here and stay at the Small or Medium business level. The entrepreneur needs to have a strong vision for his or her success to avoid falling in the comfortable state of becoming a profitable Small or Medium sized Business. Other external factors can also help shake the entrepreneur from this newly found sense of “bliss”. The economic environment, finding more demanding clients and increasing competition present challenges as well as an opportunity to move the company forward and become a better organization than before.
The second challenge is to differentiate from others by building a competitive advantage. During the first phases of the business the entrepreneur usually feels pressured to accept different types of business just to generate revenue and move the company forward. These activities may lead to a loss of focus and to providing products or services that are not actually core to the company’s business, or not what the company does best. This is the time to rethink the strategy and make sure that the company is focusing on doing what it does best, generating true innovation by moving away from a commodity towards a differentiated value proposition. This is the time for the company to focus on its core competencies and outsource the rest.
Companies frequently need investment to finance its innovation and growth, and at this stage there is a tension between these two: Should we focus our financial resources in financing growth or investing in innovation?
The third challenge is to build the institutional capabilities that will enable the company to move from a “one man show” to an organization where different people can work together under clear roles and responsibilities without stepping on each other’s toes. The entrepreneur will need to hire and manage the right management team to succeed, as well as be able to align everyone under the same vision.
The journey will bring “tornadoes” that will shake and challenge the business. There will always tension between managing growth and profitability as well as maintaining focus. In addition to that, the leadership of the organization will need to make sure that the talent and team in the organization are kept engaged and motivated throughout the journey, always giving their best.
The fourth challenge is governance under high growth environments. The leadership of the organization is in the day-to-day trenches, which sometimes makes it difficult to see things strategically and from a distance into the future. The right governance structure can set up the right sounding board to provide mentorship and guidance when needed, as well as contacts in different markets to keep growing the business. However, the governance structure can only be useful if the people in the structure have the right visibility into what is going on in the organization. Setting up the right coordination and control mechanism at every level of the organization will enable the created of strategic control panels that will provide visibility into the organization to that leadership can make decisions with the right information at hand.
At this point in the maturity of the business, the entrepreneur enters a new bliss point: The organization dominates its niche, operating in a high growth and high margin environment and has excess cash-flow to invest. But how can the organization maintain its dominant position?
The fifth challenge involves maintaining your flexibility and innovation capabilities. This can be done by taking your current offering to other geographies, as well as diversifying in product offerings and / or moving into richer parts of the value chain to offer products or services that customers have a higher willingness to pay for.
In this part of the journey, companies face a dilemma of growth. Should they continue to grow organically? Should they look at potential strategic partners that offer complementary lines of products or services? Should they get into a joint-venture with another company? Should they acquire another company? Decisions have to be made with regards to investing in or acquiring additional capabilities, for which sophisticated sources of financing will be needed.
The journey to become the next market leader is not a straight one. Your company may be held in one or several parts of this journey. You need the drive to continue and thrive and the right tools and methodologies to move forward. You need a driving force that helps you gets started and stay on track.
If you decide to embark on this Journey you will:
Create new jobs and re-ignite the economy
Capture the full financial benefit of being an entrepreneur
At the end of the journey, you will be proud of your legacy to the world and become an inspiration for others to follow their dreams.
If you are interested to learn more about how to overome these challenges, Impulsa Business Accelerator might hold the answer for how to ensure accelerated and sustained growth for you company.
There seems to be a considerable amount of confusion about the differences between a business accelerator and business incubators. Many people use the terms interchangeably, but there are a number of elements that distinguish one from the other. At the same time, there is indeed overlap across incubator and accelerator services, which explains much of the confusion. The aim of this article is to help distinguish the difference between the two.
It is sometimes easier to grasp the differences between two adjacent paradigms by first knowing about the elements they share. Forexample, incubators and accelerators both prepare companies for growth. I.e. both incubators and accelerators help firms grow by providing guidance and mentorship, but in slightly different ways and, and more importantly at different stages in the life of the business.In order to get this straight, let’s draw an analogy and say that the life of a business is like the life of a human being.
There are roughly three major stages of life: Childhood --> Adolescence --> Adulthood
Like a father to a child, an incubator provides shelter where the child can feel safe and learn how to walk and talk by offering office space, business skills training, and access to financing and professional networks. The incubator nurtures the business throughout the startup phase (childhood) and provides all the necessary tools and advice for the business to stand on its own feet.
However, while learning to stand on its own is a great entrepreneurial achievement, the walk through adolescence is often wobbly and filled with challenges, and the need for guidance is far from over. As any parent knows, guiding a teenager through adolescence is perhaps the most trying period in that person’s life, as the adolescent gains a sense of self and identity. One major challenge facing most companies who operate on the verge between childhood and adolescence is that sooner or later, they get stuck in the trenches of day-to-day operations, and more often than not fail to incorporate long-term strategic planning in the development of the business. The company may lose track of its unique value proposition – its identity – during this phase.
It is at this critical point in the business life cycle that most incubator programs end, as the firm is technically ready to spread its wings. Nonetheless, the journey towards sustained growth is far from over. Often it becomes necessary to receive advice and guidance from a business accelerator. By means of acceleration services, often in the form of “acceleration programs”, business accelerators help companies get through adolescence and prepare them to enter adulthood, providing them with strong arms and legs, sound values and a clear mindset (strategy) for the future. In other words, while incubators help companies stand and walk, accelerators teach companies to run.
Incubator programs last for varying durations and include several forms of mentorship and support, and nurture the business for the time it takes for it to get on its feet, sometimes for many years. On the other hand, a business acceleration program usually lasts between 3-6 months. The emphasis of the business accelerator is on rapid growth, and to sort out all organizational, operational, and strategic difficulties that might be facing the business. It can be understood as a holistic business advisory service, often bearing strong resemblance to traditional management consulting practices, but adjusted to fit small and medium sized organizations.
It is important to note that, compared to people, companies don’t grow by the tides of time per se, but by means of expanding their markets. An established company can still be stuck in the trenches of operations, or face other obstacles in accelerating their business. Hence, be it a young or established company, business accelerators can step in and straighten out the journey towards adulthood.
Both incubators and accelerators are important resources to ensure the growth of firms, be it from early startup or in becoming established organizations. And as we all know, the growth of firms is the lifeblood of any economy.
The performance of highly successful companies is higher than the performance of the average in the industry. Companies in the INC 500 index are growing almost 100 times faster than the overall economy? How is this possible? What do these companies have that others don’t?