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Why You Need a NorthStar – Part 1
1. BLUF
2. The Strategy Made Simple Method This article is the second in a series exploring each element of the Strategy Made Simple Method through the lens of a lemonade stand. If you haven’t already, check out the intro article. Today, we’ll start by breaking down the NorthStar. Your NorthStar is the big picture. It’s your company’s compass to guide you from start to finish. Whether you hand down your lemonade stand after twenty years to your daughter or sell it to the neighbor down the street next fall, it guides all your decisions while you own the business. Define Your Telos We must start at the end. The philosopher Aristotle posited that everything has a telos, or end, goal, or purpose. You can say that the telos of a plane is to fly and a book to be read. How do you define success? What drives you personally and professionally? What do you want your life to look in one, five, and ten years from now? Maybe you want to travel more, start a side hustle, take some time off, or build a company from the ground up and sell it for a billion dollars. Figure out your telos, what is important to you – personally and professionally – and then build your business around it. Our lemonade stand’s telos? Creating community, serving those in need, making $$ for college, having fun. Your Firm Foundation Next define your firm foundation - your Vision, Mission, Values. Your vision is the future you intend to create; your mission is what you do; and your values are what you believe in. VisionNot only do you want to sell your neighbors ice-cold lemonade to meet their needs on a hot day, but you also want to build community and create a place where more of your neighborhood interacts. Our lemonade stand’s vision? Delighting customers & creating community – one sip at a time MissionThere are many ways to define or refine your mission or what you do. One of my favorite exercises with clients is to have each member of the team individually brainstorm three to five words on sticky notes that they believe encompass everything the company does (or should do). We then use visual management to group similar ideas through affinity mapping and narrow to the top five to seven “winners” to create the mission. Our lemonade stand’s mission? Quenching thirst and fueling happy hearts. ValuesThere are many ways to define or refine your company’s values or what you believe in. You can start with a blank slate and ideate. Another option is to use a pre-defined list of values to help with idea generation and value selection. There are many easily available, and I have used Dr. Brené Brown’s Dare to Lead List of Values that many teams appreciate as a starting point. Our lemonade stand’s values? Service, Kindness, Honesty, Fresh Ingredients Long-Term Stretch & Near-Term Horizon Long-Term StretchYour long-term stretch is where you want your business to be in the long run. Depending on the kind of business you create, a lifestyle or growth business, the long run will differ. If you want to launch, scale, and grow quickly for a potential acquisition then the long run might be five years. If you want a lifestyle business to make good money through retirement and maintain your current quality of life and work-life balance, then the long run might be ten or twenty years. Either way, pick a long-term stretch to determine future revenue and profit. Our lemonade stand’s long-term stretch? Lifestyle business - $1k at 30% profit in 5 years Near-Term HorizonYour near-term horizon is where you want your business to be in the foreseeable future. Depending on the kind of business you create, a lifestyle or growth business, the short run will differ. For a growth business, the near-term might be eighteen months to three years, while a lifestyle business might be five years. Either way, pick a near-term horizon to determine future revenue and profit. Our lemonade stand’s near-term horizon? $500 at 30% profit in 2 years 3. Why You Need a NorthStar - Part 2 My goal is to make strategy simple. I hope this was helpful and will see you next week for the lemonade stand’s go-to market plan & potential challenges. 4. Application So, what does it look like for your business?
To your success, ~Susan
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