In Pursuit of Profit
Read our expert article below or sign up to get articles sent to your inbox.
Originally published: 1/13/2020 - Updated: 8/17/2023
Your organization's strategy is a critical statement that outlines how you expect to achieve certain goals. But what are the underlying drivers of your company's beliefs, actions, and desire for success? Defining these should come first, and then your corresponding strategies and projects will follow.
What Are Strategic Business Drivers?
Your business' strategic drivers are the collection of people, conditions, and information that initiate and support activities that will help your company define and accomplish its goals. These drivers represent the key influences or factors that matter to the success of your organization. Some of the most common strategic business drivers include:
How an Organization Chooses its Key Drivers
Strategic drivers are shaped by both internal and external forces. Internal drivers may include mission, people, and profit goals. External drivers include markets, competition, taxes, regulations, technology, and customer needs. Once you choose the particular drivers for your business, you can prioritize them and create strategies around them. The following are examples of several common strategic drivers and strategies that stem from those drivers.
Strategic Driver - Strategy Examples
Aligning Projects with Strategic Business Drivers
Most companies undertake a variety of short and long-term projects that are either internal to the organization, external, or some combination of the two. If you've ever been involved in a project that has fallen off course, you know how frustrating, time-consuming, and expensive that can become. One of the best ways to ensure that your firm's projects remain on track is to align them with your company's strategic business drivers.
Agreeing to launch a new product or begin a project just because it's convenient or advocated by management may not make sense once it is viewed with a fresh pair of glasses. Before a project is even considered, the first step should be to confirm that it aligns with your firm's top strategic business drivers. When your company follows a formal process to prioritize and agree on the right projects based on this strategy, you will have fewer missteps and a higher success rate with each venture.
Strategic Business Drivers at Successful Businesses
For an organization to find long-term success, it should clearly define the strategic value that it brings to its stakeholders (e.g., clients, employees, suppliers) and the marketplace at large. One of the first steps to defining your company's goals is to identify and prioritize its strategic business drivers. These in turn serve as the basis for strategies, tactics, and programs/projects necessary to run and grow your business.
These strategic drivers are the DNA of your overall business. If they are poorly defined, your goals may run off course, and your business could fail. It's essential that you have a method in place to monitor your business drivers and make adjustments as needed.
If you need help managing the day-to-day finances of your business, please reach out to us! Our team provides top-rated accounting services for businesses and nonprofits at all stages. We also offer accounting and finance recruiting to place management-level professionals into accounting manager and controller roles. Contact us to find out more today!