Issue #7 - The Business Strategy, Where The Data Journey Starts

A 6-minute dose of business acumen to help you succeed in data

Read time: 6 minutes

Do you know where your company is going? What objectives it has? How it plans to deliver against that direction?

These answers are all held within the business strategy.

The business strategy articulates the overall direction of the company, the financial and non-financial targets that underpin that direction, and the underlying initiatives that will help the company achieve it all. Without these components, a business is doomed to live in a state of flux, without a tangible perspective on how it can grow and succeed.

Every business has a strategy, but the gap between the good, bad, and ugly ones is extremely wide.

What is a Business Strategy?

A business strategy is the game plan a company employs to achieve its goals and guide it from its current state to a desired future state. It's not just about competing in the market; it's about outmanoeuvring the competition through smart, strategic moves.

There are seven key components that I feel are essential in every business strategy:

1. Vision: What does the organisation aspire to be? What does it want to achieve?

2. Mission: What are the tangible, high-level ways we accomplish our vision? If the vision sets the direction, the mission is how the company gets there.

3. Goals: The metrics and targets. Without clear goals it is impossible to manage performance, plan resources, invest strategically, or prioritise decisions. Lastly, and most importantly, it holds the organisation accountable to tangible targets within its strategy.

4. Imperatives: The categories of must-do actions to achieve the vision, mission, and goals. Treat these as higher-level, action-oriented buckets of where the organisation needs to focus (e.g., improve supply chain operations, drive performance through data & analytics, etc.). Each imperative should have an executive owner, otherwise any initiatives under it can easily fall apart.

5. Initiatives: Specific projects or actions taken to fulfil the imperatives. These should be a lot more detailed than the imperatives (e.g., complete an audit of the supply chain to improve efficiencies, building performance management dashboards linked to same-store sales). Similar to the imperatives, they should have owners within the business who are accountable and responsible for seeing through these projects.

6. Values: The principles and beliefs that guide behaviour (e.g., customer interactions, employee culture) and decision-making (e.g., ESG, evaluating strategic actions). The values underpin a company’s culture, which should align with the vision and mission.

7. Core Competencies: The unique strengths and capabilities that give the company an edge. What is it that makes your company rise above the competition and succeed?

Here is a nice graphic depicting all seven (grouped into six) components you need to set the right business strategy

Good business strategies have these seven areas concisely defined and readily available to individuals across the business.

Bad strategies define some of these components and make them available to individuals if they actively seek them out.

Ugly strategies—which exist in an unfortunately large number of businesses out there—don’t define these components and employees just carry out their day-to-day without strategic direction.

One way, I like to articulate and organise the business strategy is in a temple format. See below for an example:

I used this format while working at Level5, which was the best strategy consultancy I have ever worked for and seen deliverables from. Couldn’t recommend them highly enough

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How Data has Changed the Business Strategy

Every business strategy in the world has directly or indirectly talked about data & analytics over the past 15 years. Companies realise better information and decision-making underpin business success, and you have to be living in a cave not to realise how important data, analytics and data science is to do that effectively.

So what parts of the business strategy should be impacted:

• Mission: While your vision may not change, how you achieve it might evolve to include data (analytics, AI, etc.). A lot of companies have actually shifted their mission to be data-led!

• Goals: These may also stay the same, but there is an improved opportunity to measure and benchmark against these goals, allowing organisations to better understand how to hit them.

• Imperatives & Initiatives: Every business strategy should have some reference to data & analytics in their imperatives and initiatives. With the imperatives, data may not be the focal point, but it could underpin other bucket areas, say to enhance the customer experience. Within initiatives, data & analytics need to be called out much more specifically.

• Core Competencies: Now every organisation shouldn’t make data & analytics a core competency. However, they should figure out what core competencies they already have that can be enabled by data.

When companies talk about their business strategy being data-enabled, this is what they need to think about.

Unfortunately, most business executives and CEOs haven’t learned this.

And, as many of you readers have seen, if you come at a strategy without data & analytics, you are bound to lose in today’s world.

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The Impact of Business Strategy on Data Teams

For data teams, an effective and properly communicated business strategy is both a map and a compass.

The map sets the direction the data team needs to head towards (Vision, Mission, Goals). The compass is how to get there (Imperatives, initiatives, Values, Core Competencies).

Unfortunately, the data team usually only has one or the other.

The most common scenario is that data leaders are given a high-level map, or direction of travel: “Go increase revenue”. They go off by themselves and get their teams to build some tools and solutions. Although the team might know where they want to go, the detail of how to best get there isn’t clear.

The other situation is the data leader can’t read the map or doesn’t know how to work a compass. This isn’t a slight on the data leader, but a reality of the world of data & analytics. While other domains like finance, marketing or sales think with the business in mind, data professionals are brought up learning with their tools and technical skills first and foremost.

Overall, the business strategy needs to guide the data team’s work, but a lack of soft skills, detailed planning and cross-collaboration often hinder that.

If only data teams had Jason Bateman commenting in their ear reminding them to think about the business strategy

So what should you do to overcome this?

• Build with the Business Strategy in Mind: Start any data project by looking at the business strategy. Understand how your data project will support that strategic direction. Align KPIs and data use cases with the strategy. Only after all of that do you go and find the data and work with it.

• Communicate & Collaborate like your Life Depends on it: Data is often treated as a standalone domain, but it needs to be cross-functional to be effective. Know your counterparts in marketing, supply chain, finance, etc.

• Learn to Connect the Dots: A great data leader is not your best programmer; instead, they are the person who can connect the dots from the business strategy to the business’s data needs to what solution delivers against those needs. In the end, connecting the dots ensures what is built is actually used.

Thinking with a business and strategic mindset is the biggest gap in the data market. Data leaders will mention this and say they actually think this way, but, from my experience, few actually walk the walk, especially as they get down the rabbit hole of building solutions.

Next week, we build on this by diving into how to better understand the business needs. Subscribe and stay tuned for some key stakeholder interview questions, ways to better collaborate and the benefits of bridging the gap, both for you and your organisation.

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