In the Introduction to our Growth Formula series, we unveiled the Growth Formula, explaining what it is, why it’s powerful and introducing the 4 elements of the formula. In this, part 2 of the series, we dive into the element "Setting Direction". (Click here if you missed Part 1, "You, the Leader").
In Alice in Wonderland, Alice asks the Cheshire Cat, “Would you tell me, please, which way I ought to go from here?” The Cheshire Cat responds, “That depends a good deal on where you want to get to.” Alice replies, “I don't much care where.” To which the Cheshire Cat famously says, “Then it doesn't much matter which way you go.”
This whimsical exchange highlights a truth many business owners face: without clarity about where you’re headed, it’s impossible to chart a course for meaningful progress. Many businesses grow successfully without fully defining their strategic direction, but they often hit a plateau. Gaining clarity, often through a process of business coaching that speaks to these foundational elements, can be the key to unlocking the next phase of growth. For your business to grow and thrive, you must be clear about what you want to achieve and how you plan to get there. This process is called Setting Direction, one of the 4 pillars of the Growth Formula, which underpins our business coaching approach.
The Foundations of Setting Direction
Setting Direction requires defining what you want your business to create. This begins by understanding who your business will serve, how you will serve them, what makes your offering unique and valuable, and what your business aims to accomplish by serving these customers.
For instance, Ultra Food Innovations chose to focus on food wholesalers and to offer next-day delivery, addressing the exact needs of their customers and significantly expanding their market share. Similarly, VIVA Engineering’s "On Time, In Full, Always Safely" mantra reflects their commitment to delivering value by aligning operations with customer expectations. This clarity helped them gain trust and establish a strong market position.
When these elements are clear, you can build a strategy that acts as a roadmap to guide your decisions and actions. Business owners often feel stuck in the day-to-day grind, but setting a clear direction can be the catalyst for lasting transformation.
The Nine Questions to Define Your Strategy
Answering the following nine questions will help you create a winning strategy and set a clear direction for your business:
- Who is our ideal customer?
Identify the customers you can best serve—those whose needs align with your strengths. Ultra Food Innovations provides a great example of focusing on a specific audience. By targeting wholesalers and offering next-day delivery, they addressed the exact needs of their customers and significantly expanded their market share.
- What is our reason for being?
Clarify the deeper purpose behind your business and the meaningful contribution you make to your customers’ lives. A strong purpose-driven business attracts the right customers, the right employees and remains relevant in an ever-changing world. For a powerful example of the value of building purpose-driven business, read Ian Fuhr’s book, The Soul of Sorbet.
- What is our belief system or core values?
Be crystal clear on your company’s values and culture. Then, ensure your strategy aligns with the principles and values that guide your decisions. For example, VIVA Engineering’s commitment to safety and reliability encapsulated in their core values became a cornerstone of their business strategy.
- What is the current competitive position of our business?
Assess your market position and explore what opportunities for growth this opens or closes for you. You need a dispassionate, critical assessment of the position of your business. A good starting point is just doing a SWOT analysis. To add more rigor, use tools to produce the data you need such as customer surveys and employee surveys; assess your industry profitability using a Porter 5 Forces analysis and assess macro trends using a PESTEL analysis. Then, combine the insights from all these tools to produce your SWOT.
- What is our winning aspiration?
Define what success looks like for your business and set the overarching goal you aim to achieve. For example, a Grow business coaching client set a ten-year goal to break into international markets and win major pitches against global agencies. This bold aspiration involved opening an office in the UK, expanding their offerings and competing with international giants. Within just three years, they had already achieved significant milestones.
- Where will we play?
In “Where will we play”, you need to ensure crystal clarity and alignment of your team on your chosen markets. Carefully choose and write down what customer segments you target, what products you offer those segments, what geographic markets you look for those segments in, and what distribution channels you use to reach those segments. Be careful here! This is time to make tough choices and not only decide what you will focus on, but also what you will NOT do. You can now rigorously assess whether your current markets still have sufficient growth potential, or whether its time for expansion into new market.
- How will we win?
If not yet done formally, establish with your team what is the over-arching unique and valuable offering that gives your business a strong competitive position in the marketplace and is difficult for competitors to copy. For example, Ultra Food Innovations’ focus on next-day delivery helped them secure client loyalty, even against much larger, price-undercutting competitors.
- What capabilities must be in place to win?
Determine the key capabilities and activities your business needs to develop or strengthen in order to deliver on your unique and value proposition. For Ultra Foods, the shift to next business day delivery required clarity and focus on a core set of capabilities that they needed to be world-class at, and which their competitors would find impractical, if not impossible, to copy.
- What is our economic model?
Build out your economic model to ensure that your strategy is financially sustainable and generates profitability above industry standards. We like to use the combination of two Jim Collins principles in our coaching approach, the Profit per X and the Flywheel, to build clarity on your economic model.
Building a Culture of Strategic Thinking
As Jim Collins discovered in his research for Good to Great, great leaders regularly engage their teams in disciplined thought. This includes forming a Strategic Council where leaders meet to address these essential questions and refine their strategies. At Grow, we ensure that our clients’ leadership teams get into a rhythm of facilitated annual and quarterly full day strategic planning workshops, ensuring alignment and clarity among team members.
Why Setting Direction Matters
At Grow, we understand that business owners often feel overwhelmed, stuck in daily operations, or unsure of how to move forward. Clarity is the foundation of progress. Without it, frustration builds, opportunities are missed, and your team’s potential remains untapped. By working diligently through these nine pillars of strategy, you gain a roadmap to align your vision and empower your team to execute with confidence.
Your Next Step
Take a moment to reflect: Are you clear about where your business is headed? If not, it might be time to revisit these critical questions, with the guidance from a strategic business coach. Setting Direction is not just an exercise; it’s the starting point for transforming your business and achieving sustainable growth.
By integrating disciplined strategy and purposeful action, you’ll set your business on a path to success. If you’re ready to gain clarity and start building a strategy that works, Grow can help you navigate the journey. Let’s build something extraordinary together.