Tweet

Can We Remove Risk From Our Strategy?

Guest post by: Joe Evans

Article Overview: If you could, wouldn’t you choose to test your organization’s strategy before gambling your business and your career on the assumption that the strategy is right? This article contains a short list of tactics to help remove some of the risk from your strategy.

Can We Remove Risk From Our Strategy?



We look both ways before we cross the street. We research the company we are dealing with before making a big purchase. These are both examples of non-risky behavior, yet strategies sometimes do not get the same treatment in terms of risk avoidance. If you could, wouldn’t you choose to test your organization’s strategy before gambling your business and your career on the assumption that the strategy is right?

Below is a short list of tactics to help remove some of the risk from your strategy.

1. Start with the facts and base the strategy on reality, not hope.

Strategies that actually work are based in reality, not opinions, guesses or hopes. An effective planning process which includes measurement and acknowledgment of key business “truths” (including financial, cultural, competencies, and historical performance) is the best way to build such a strategy. Those who are involved in the planning process must be open to facing these truths and critically evaluating them relative to the strategy being considered.

2. Break the strategy down into smaller component pieces.

The corporate strategy, when distilled into its pure essence of goodness, boils down into a manageable small number of goals that then expand back into a number of sub-strategies to accomplish those goals. Managing big and complex is much more difficult than managing smaller and elegantly simple chunks of strategy. Starting early and /or ongoing makes this much easier to accomplish.

3. Test you assumptions thoroughly.

There is one more key point to make about getting in front of and controlling the strategic plan development. Assumptions form the basis of those sub-strategies referred to above, and those underlying assumptions must all be fully vetted. Fully vetting strategic assumptions also takes time. It requires allowing those involved with planning to back away from the “givens” and challenge them to ensure we are not assuming the rosiest scenarios on which to base our plan.

4. Put yourself into your competitors shoes and think about how you would counter your own strategy.

We can delude ourselves with “happy talk” and the belief that our strategy is more advanced and sophisticated than that of our competitor. The truth is, unless we undertake the exercise of attacking our own business’s weaknesses and vulnerabilities and then shore those areas up through strategic initiatives - our competitors will be more than happy to exploit them for us.

All too often, corporate strategies are devised without thinking in our competitor’s shoes. Competitors are smart and aggressive, especially those that are quickly coming up from behind us in terms of market share. Their eyes are fixed on us already. What maneuvers will they make to overcome us competitively? What proactive elements of our strategy can put additional distance between us and them? Our strategy must consider our vulnerabilities and account for them through counter-actions. If we are exposed in one area of our business, then why? What must be done to shore it up? It is distinctly possible that strategic analysis will lead us to make decisions to exit one or more areas of our business in order to better focus on more profitable or viable segments. In other cases, strategic analysis may trigger innovation initiatives to support a strategy of expansion - capitalizing on a dominant competitive position.

5. Pay careful attention to your industry’s direction and momentum.

By studying the movement, direction and momentum of the industry or industries served by the organization, that data can feed the strategic planning process leading to better planning decisions. For instance, if the industry data suggests that competitors are enjoying a technological advantage over your firm, how should that be addressed in the strategy? What if consolidation is occurring? Should we be considering a merger now?

No matter where your organization falls on the continuum of planning sophistication, there likely are opportunities that if addressed would help remove risk from your strategy.


---

For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.

About the Author:

Joe Evans is the President and CEO of Method Frameworks. Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.

---

New Change Management PDF Download Available Download our Guide to Change Management

Our guide to successful change management, called "Transforming the Organization", is a 17 page complimentary resource to help your organization initiate a successful corporate change management program, accomplish organizational transformation and make it stick.

In this change management guide, we cover the following:

• Defining change management
• Exploring why change management is a big deal
• Examining why change management is considered difficult to do well
• Describing how to do change management effectively
• Discussing what challenges to expect during the change process
• Setting expectations about what to expect if change management is done well

Download Transforming the Organization in PDF format now.

---

Do not miss these two important strategy-related PDF downloads for executives and business strategy professionals.

---

Join the Strategic Planning Xchange group.

Learn More

Method Frameworks is a leading business strategy and management consulting company, based in the Dallas / Fort Worth area and serving clients nationally and internationally.

Discover our capabilities and learn why Method Frameworks is the strategic planning partner chosen by Fortune-500 companies and small businesses alike. Let us show you how to realize 140%+ ROI on your strategic planning efforts through our unique Plan4^SM process that brings together strategy and execution into a powerful plan. Plan4 is our proprietary business planning process that involves an integrated set of actions designed to help companies gain sustainable advantage. Download our brochure to learn more about Method Frameworks and our services or download our Plan4 Planning Process Overview.

You can contact Method Frameworks at 877-317-5264 (877-31PLAN4) or follow this link to request a meeting with a planning consultant. Check our articles and blog often at www.methodframeworks.com to get many more planning tips and information about our Plan4 process.

Related Articles
  Lowering the Joint Venture Barrier
  How to Remove or Release a Tax Lien
  Will a tiger eat you today?
  MANAGING RISK
  Forex Trading and You?
  Innovation or problem solving? is a great question to ask often
  Get FREE Advertising
  Big Lessons From Little Cookies
  Unlimited Potential by Robin J Elliott
  Inside the Head of a Joint Venture Broker by Robin J Elliott
  Safe Investment Strategies for Retirement.
  Live From JV Alert Does Your Copy Follow This Proven Sequence
  Risk Assessment & Analysis Techniques
  Suggestion For My Friend To Solve Windows Password Forgotten Problem
  If you are going to buy a business, you need to accept business risk.
  Marketing - It's All in the Packaging!
  Five Keys to Guarantee Success in Any Business
  CASTING OFF
  SMEs the difference between entrepreneurs and franchisees
  What would your sales-role and business be like with less fear?

Article Tags: business strategy risk, change management, corporate strategy, joe evans, management consulting, method frameworks, planning process, strategic planning
Referred by: http://www.imageworksstudio.com/



Related Forum Posts
Book: Secrets of Six Figure Women - Secrets of Six Figure Women: Surprising Strategies to up your earning and change your life Barbara Stanny, 2002 Jacket: Maybe you've noticed - a subtle trend is gathering steam. Quietly and steadily, the number of women making six figures or more is increasing, and it continues to rise at a rate faster than for men. From entrepreneurs to corporate executives, from white collar executives to free lancers and part timers, women are forging careers with considerable financial success. Through extensive research and hundreds of interviews, including dialogs with more than 150 high earners whose annual incomes range from $100,000 to 7 million, Stanny discovered that ...they all had certain traits in common: 1) a profit motive 2) Audacity 3) REslience 4) Encouragement 5) Self-awareness 6) Non-attachment 7) Financial knowhow She amplifies on these in the book itself. Table of Contents Intro: Welcome to the era of the six-figure woman 1. The Queen in the Countinghouse 2. The Lowdown on low earners 3. Raising the bar 4. Strategy 1: The Declaration of Intention 5. Strategy 2: Letting go of the ledge 6. Strategy 3: Get in the Game 7. Strategy 4: Speak Up 8. Strategy 5: The Stretch 9. Strategy 6: Seek Support 10. Strategy 7: Obey the rules of money 11. Claiming our power Appendces: Resources and websites Tips for getting out of dent Investing Basics: Wealthbuilding 101
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Re: What can you do if your franchise is hit by a scandal? - GT - Brilliant Strategy... What can I add? I'm at a loss for words...so I'll shut up now...
Show the Benefits - Offer a free test drive of the Product or Service with a Money Back Guarantee - Take the Risk out. This will help them make the decision but you have to work with them to realize it by explicitly state the benefits they are receiving.
Introducing a Learner - Hi everybody, It is really my pleasure being around so many Entrepreneurs and strategic minds. Strategy is something I always loved and eager over every new move. Being a newbie I would need your support and I hope I would get that. Thanks Stephen


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Work Place Counselling

Leading with Discernment

Emotional Intelligence in Business

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.