Here are the 8 questions every business needs to answer in order to succeed:
Question 1: What is the ambition of the company?
It is critical that the vision of where the company is heading and what it is trying to achieve over the medium to long-term is understood and shared by everyone. If people don’t know where they journey is going, they won’t know how they can help row into the right direction. What companies need is a clear guiding star that everyone can follow and aim for. For some more specific advice on company mission and vision check out this post of mine.
Question 2: Which customers are we targeting and why should they buy from us?
In answering this question, companies have to agree on their target market as well as the customer value proposition. For the former, companies have to figure out the customers they want to sell to and how (e.g. the markets segment, what region, what channel). For the latter, companies need to decide what makes customers buy their products or services. It could mean focusing on quality, relationships, brand, low price, convenience, etc. A common mistake here is trying to do too much and focusing on too many different customer promises.
Question 3: What are our financial goals?
It always amazes me how unclear the financial goals are in many companies. For some businesses, the focus might be on growing sales (especially those that are trying t grow) while others might be concentrating on growing profit margins and bottom line performance. Whatever a company decides here it has to be supported by the answers about customers and market. If the focus is on growing profits, then the customer priorities might be about identifying and developing close relationships with the most profitable customers. If instead, the focus is on driving growth, the customer objectives might be to enter new markets or diversity. Follow this link to find out about some of the most important finance indicators and always remember that the main reason why companies go bust is not a lack of sales or profit but a lack of available money in the bank. I therefore advise every company to add cash flow objectives to their financial goals.
Question 4: What do we have to excel at internally?
Here, companies need to figure out what internal processes they have to excel at and what internal core competencies they need to focus on in order to deliver to their customers and shareholders. Again, it is about making choices and defining the key things they have to improve and grow internally. A company that wants to improve profits by targeting their most profitable customers might want to concentrate internally on putting in place customer relationship management processes.
Question 5: What are your biggest competition factors and business risks?
Instead of just focusing on the internal improvements, companies also need to look across their own horizon and watch the market and competition. Every company should be aware of the key risks to their business and monitor the competitive forces in the market.
Question 6: Who are the key partnerships we have to build and maintain?
No business can operate in isolation. Businesses have suppliers, channel partners, distributors, networks and communities that are vitally important to their future business success. Here, companies need to identify who those key partners are and which relationships they need to focus on over the coming months.
Question 7: What systems and infrastructure do we require to succeed?
To answer this question companies need to pinpoint what IT systems and data requirements they have as well as any requirements for physical infrastructure such as buildings, machinery or land. These systems and infrastructure priorities need to be in support of the objectives identified around internal processes and customers.
Question 8: What are our employee and people priorities?
Businesses wouldn’t exist without the people in them. It is critical that companies identify the talent they require, the development and recruitment priorities as well as any priorities around organisational culture and leadership.
These are the 8 critical questions every company needs to answer in order to succeed. What are your thoughts on these? Are there any others you would add?