In an increasingly fast-paced world, where your competition can catch up with you in the blink of an eye, you need to stay focused on goals and make effective decisions that move you forward. One of the biggest barriers to innovation is the fear of failure. If the leaders of your company were to make an anti-strategic decision, it could jeopardize the achievement of objectives and even the survival of the company.
In baseball, as in many other fields, they say you must have a good batting average. We are aiming for a .300 average, which is a minimum of 3 out of 10 good decisions. It is not that high when you think about it.
But how could the biggest companies in the world have survived with such a low average? The answer: they have much higher averages. Much like the most innovative companies, they equip themselves with tools and processes that help them make their decisions; decisions aligned with their objectives, with their capacity and with their customers that allow them to create value.
So, I thought I would present 4 easy solutions to implement to help you to make better business decisions.
1.Define your Strategic Filter
When a business is starting up, it tends to take all the mandates that are offered to it in order to create a larger customer base. Growing companies can afford some selectivity in terms of mandates and clients, but when the money supply is attractive, emotionality is more easily allowed to take precedence over strategic vision. This is why the smartest companies prefer to define and rely on their strategic filter.
In my case, I learned to define strategic filters following a strategic reflection developed by my former employer with the help of the renowned firm DPI Logic, a world leader in strategic thinking. Here is what a strategic filter consists of:
A strategic Filter Consists of Positive and Negative Elements
Inside the positive filter, list some criteria that define the types of customers that are most beneficial to your business. Normally, you would be willing to invest and put a lot of effort into attracting them to your offer. Do the same for the markets or territories that are the most favorable to achieving your business objectives. You could also define the types of products or services that you should put forward and develop further. All of these make up the positive filter for your business.
In your negative filter, you must establish the criteria that defines the type of clientele you should abandon or refuse, the markets and territories to avoid, the products or services to withdraw from your offer.
Note that you may decide to turn away clients out of respect for them if you feel your business is not right for them!
In the event that a new customer knocks on your door for your services, then you should put the emotion aside, and go back to your filter to see where that potential customer stands and make a strategic decision.
- If he meets the positive criteria, go ahead and accept this new client into your family.
- If he meets the negative criteria, even though it might sound appealing, turn that customer down. It could hurt your long-term business goals, damage your reputation, hurt your other loyal customers, etc.
- If it is neither in the positive nor in the negative criteria, take the time to listen to their needs, consult your team and you are free to accept or reject them, depending on the decision you deem the best and the most strategic.
2.Automate Decision Making
Another way to make more strategic decisions is to automate them, or at least, to equip yourself with tools to facilitate this decision making.
This solution is even easier to implement when your company already has a strategic filter. In this case, you could set up automation tools that allow you to enter your potential customers' data into a system, and the system will tell you whether to accept or decline the offer.
One of the platforms that easily enables this kind of automation is HubSpot. Several other customer relationship management (CRM) systems offer this feature as well, but I personally prefer the HubSpot solution.
On HubSpot, we use the positive criteria from your strategy filter to define rules that will award points to your contacts and potential customers. Your negative criteria then make it possible to define the rules which will subtract points from these contacts. The higher the score of a prospect (lead), the more strategic the decision to do business with them. Conversely, the lower the score (or even in the negative), the less favorable it is to do business with this prospect.
Note that positive and negative criteria can be defined by behavioral, technological, and demographic elements.
3. Validate your Data
The best decisions are often accompanied by analysis, business cases, and a lot of data. I am not saying that it is impossible to make good decisions based on a gut feeling, but that rationally, the more evidence-based the analysis, the better the chances that your decision will be informed.
While you base your decisions on analytics, these in turn are based on data. It is crucial that this data is correct. It is best to validate the source of your data and double-check it before adding it to your analytical reports.
Here are some tips for good hygiene of your business data:
- Appoint a person responsible for the hygiene of your data.
- Define a clear nomenclature for the management of your data and communicate it to all users of the database. (Only the person responsible for data hygiene is authorized to change this nomenclature.)
If your data travels between different business systems, define the primary data source. This will have priority over other sources.
Use digital tools that are easy to manage and edit. (Ex. HubSpot, Marketo, ...) Avoid tools that are too complex or require the integration of several third-party services because each connection to your database is a risk of losing data or creating duplicates.
Do business with firms specializing in business intelligence; like Globalia!
4. Test your Decisions
Often, it is best to test your decisions or simulate the effect on your operations and bottom line. When in doubt, test and analyze the result. Some decisions can be tested virtually while others require real world testing. In this case, I suggest you test on a small scale.
Some ways to test and simulate your decisions:
Do A/B tests. Analyze the outcome of two separate decisions on a small group of prospects.
Use simulation or forecasting software. Some CRMs allow you to preview your sales numbers based on the opportunities in your sales funnel. For example, on HubSpot, I can add a new fictitious customer to my sales funnel and see what impact it will have on achieving our sales goals. I can then check whether the resources necessary to carry out the mandate have the capacity to carry it out on time.
Survey your customers. It may seem too simple, but it is often very beneficial to expose your questions about your strategic decisions directly to your customers. For example, you could ask your Facebook followers if they prefer you to develop a separate product for a new market or if you should modify your current product to appeal to the new market.
In conclusion, it should be understood that being strategic means knowing how to make choices, a set of concurring choices that serve the direction of the company and its unique value proposition for its markets. These strategic decisions allow you to better serve your customers and create value above the competition in order to gain a sustainable competitive advantage.
If you need help making strategic decisions, let Globalia's team of experts help you put the right tools in place!