How to establish effective strategies to get results

In business leadership, distinguishing between a genuine strategy and mere wishful thinking is paramount. As CEOs, directors, founders and executive leaders, it’s essential to ensure that our strategic plans are actionable, measurable and aligned with our organization’s capabilities and goals. First, let’s take a moment to explore what a strategy isn’t.

Nice words are not a strategy

It’s easy to craft a vision or mission statement filled with inspiring language. Phrases like "We aim to revolutionize the industry" or "Our goal is to be the market leader" sound impressive but often lack substance. Without a clear roadmap detailing how to achieve these aspirations, such statements remain just that – aspirations. They may boost morale temporarily but fail to provide actionable direction.

Financial targets: results, not strategies

Setting ambitious financial targets, such as "We aim to increase revenue by 20 percent this year", is crucial. However, it’s important to recognize that these targets are outcomes of effective strategies, not strategies themselves.

While they provide a clear metric for success, they don’t outline the path to achieve them or the purpose behind them. They can also drive contradictory behavior among teams or create short-term thinking that doesn’t align with the long-term sustainability needs of the organization.

Further, your team may find it challenging to connect with these figures without understanding both the purpose and the initiatives designed to reach them. At its worst, this approach can leave your team feeling like they’re being asked to work harder solely for the benefit of others, with no clear advantage for themselves.

How to craft actionable strategies

To move beyond wishful thinking and hard numbers, it’s essential to develop strategies that are both top-down and bottom-up, ensuring a balanced approach. This involves:

Defining clear objectives: Establish specific, measurable goals that align with your organization’s mission and vision.

Identifying key initiatives: Determine the projects and actions that will drive progress toward these objectives.

Aligning with capabilities: Ensure that your strategies leverage your organization’s strengths and address areas for improvement.

Engaging employees: Create a culture where employees at all levels understand the strategy and their role in its execution.

Examples of effective strategies

Consider the case of July, a Melbourne-born luggage company. Founded in 2019, July faced significant challenges with the onset of the COVID-19 pandemic, which brought international travel to a halt. Instead of succumbing to these challenges, the company adapted by expanding globally, particularly in the United States, leading to an over 1,000 percent increase in revenue by mid-2021.

By 2024, July was flourishing with aims for annual revenues over US$150 million, partnerships with the Australian Olympic Team and plans to expand further into the American market. The brand differentiates itself with high-quality, affordably-priced products, innovative features and a direct-to-consumer model that includes a lifetime warranty. They generally avoid deep discounts to maintain the integrity of their pricing and have a dual-brand strategy of digital and physical presence.

July uses retail stores for brand engagement, but is still primarily a direct-to-consumer e-commerce brand. Expanding their product line beyond suitcases to include bags is also in their plans. This clear, actionable strategy has positioned July as a leader in the market.

Another example is the strategic transformation led by Mark Fitzgibbon at NIB, an Australian health insurer. Over his 22-year tenure as CEO, Fitzgibbon led the company’s transformation from a small mutual fund for BHP’s Newcastle workers into a top-four, ASX-listed health management company. His tenure included significant expansions, introducing new revenue streams and navigating challenges like the COVID-19 pandemic.

Under his leadership, NIB grew its membership and significantly enhanced its digital health services. This long-term, actionable strategy has ensured NIB’s sustained growth and stability.

Linking strategy to balanced scorecard and OKRs

To ensure that strategies are actionable and measurable, many organizations employ frameworks like the Balanced Scorecard and Objectives and Key Results (OKRs).

The Balanced Scorecard provides a comprehensive view by evaluating performance across four perspectives: financial, customer, internal processes and learning and growth. This approach ensures that organizations don’t focus solely on financial outcomes but also consider factors that drive long-term success.

OKRs, on the other hand, involve setting clear objectives and defining key results that indicate progress toward these objectives. This framework promotes alignment and engagement by linking individual goals to the organization’s strategic priorities.

Implementing effective strategies

For a strategy to be effective, it must resonate with your team. This involves:

Assessing skills and resources: Ensure that your team has the necessary skills and resources to execute the strategy. This may involve training, hiring or reallocating resources.

Communicating clearly: Articulate the strategy in a way that is understandable and relevant to all employees. Transparency builds trust and engagement.

Aligning incentives: Design incentive structures that motivate employees to work toward strategic objectives. Recognize and reward contributions that drive progress.

Providing support: Offer continuous support and remove obstacles that may hinder execution. This demonstrates commitment and empowers employees to take initiative.

Distinguishing between genuine strategies and wishful thinking is crucial for effective leadership. By developing actionable plans, utilizing frameworks like the Balanced Scorecard and OKRs, and aligning strategies with employee capabilities and motivations, you and your organization can move beyond aspirational statements to achieve tangible results.

Opinions expressed by The CEO Magazine contributors are their own.