In this video, I cover all of business strategy in only 10 minutes!
VIDEO SUMMARY
So if you clicked on this video, you are probably thinking to yourself, how is this guy going to sum up everything to do with business strategy in 10 minutes. There are probably more books written about business strategy than any other business topic. There is so much written about it, there are different tools and techniques, and different ways to do analysis. How am I going to cover all of that in 10 minutes? Well, I am going to do even better than that. I am going to capture all of business strategy in one word. That word is… Focus.
When you take all the books, tools, and analysis and boil them down to their core, what they are trying to do is help you to focus. They help you focus your energy, time, and resources on the area where you generate the most value.
Now this sounds simple, but it is incredibly difficult. I will give you an example to show you what I mean. Imagine someone comes up to you and hands you $1,000 to do some work. You need to evaluate whether that $1,000 is aligned with your focus. If it is not your focus, and you take the money, you are not following your business strategy. Your business strategy is focused on where you generate the most value. And if you are diverting your time and resources away, you are taking those resources away from where you could be generating higher levels of value. Business strategy is about being able to say “no” to things that are outside your focus, and saying “no” is very hard for people.
I am really simplifying this down, but I am not discounting all the other books and resources out there on business strategy. They are all important. I love all of that stuff. I could spend days doing all the excel spreadsheets, and building the diagrams, and doing the exercises. But you should also realize that all that stuff is there to help you identify your area of focus. Where do you generate the most value? If you can identify where you create the most value, and you put your time and resources on those activities, you will generate greater amounts of value, than if you did not focus your time and resources. The goal for society really is to have each person identify where they create value and have each person focus their time and resources on that unique area, and all of society will be better off.
Now some people might say at this point, what about conglomerates? So conglomerates are these massive global companies that have multiple business segments. How is their business strategy focused? If you take a company and grow it to dominate the global market, there comes a point where you can no longer grow in your focus area, so at that point it makes sense to diversify into other business segments, more along the lines of investment management. But most businesses are not in that situation. Most businesses are in the situation where they would benefit from focus.
I want to give you a really practical example of how powerful business strategy can be when it works. This example is on time management. Now if you are watching my channel, you are a high performer. Only a high performer is going to watch a YouTube channel on accounting and corporate finance. So I am guessing you are an incredibly busy person. You are working 60+ hours a week, and time management is probably a big struggle for you. If you are very self-aware of your focus in life, time management gets really easy. Let’s imagine you knew the 1 thing you wanted your life to be about. Now imagine your time management if you woke up every day, and you only had to do 1 thing. Everything else in your life goes away except for that one thing. Not only would you have more free time, you would have more time to focus on the one thing that your life is about. Now you do not need to take this to extremes, because you still need to do things like eat and take care of your family. But I hope I am giving some insight into this concept. The more time you can dedicate to where you generate the most value, the more value you create for your customers, and the more money you make for yourself. Now imagine you extend this to a business. Imagine if everyone in a business knew their area of focus and built their time management around that. That organization would be so powerful. This is different from how most people do time management. Most people’s lives are chaotic and their lives are full of junk that does not contribute to their area of focus. You can really separate yourself from the crowd by integrating business strategy into your time management.
I want to offer one more example. This is from my own personal life. I think you can tell, I am one of those people who really love business. So I am always thinking about business. The side effect of this is that I am constantly thinking up ideas of new businesses I could start. I am not joking that every single day, I think of a new idea for a business. And they are good ideas. But the problem is, that if I start business number 2, 3, 4, 5… I would not end up doing any of the businesses well. I would waste any opportunity of being successful. So I have to be very vigilant at staying focused on the area I can generate the greatest value, which is being the best accountant I can be. And that is the point. Business strategy is about identifying where you generate the most value, and making decisions to allocate time and resources on that area of focus.
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Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.