When I joined Cambridge Online as its new managing director more than six months ago, it was clear that the business needed a refocused strategy to succeed.

We needed to define where we wanted to go and then work out how to get there in detail. This thinking needed to involve all our staff and other stakeholders in defining and then ‘actioning’ multiple improvements to keep us all on track.

Involving the team and using our resources in the correct way was key. In my experience, good, workable business strategies first identify what the business wants to be i.e. what products and/or services it wants to provide, and how it wants to differentiate itself from the competition, rather than just setting a ‘pie in the sky’ financial growth target and expecting staff to work towards achieving this, with no clear direction.

It then needs to define the key strategic goals for the business and set the framework for a much deeper investigation of how these goals can be achieved, by whom and over what time frame. If you drill down into each strategic goal you should be able to define numerous projects, articulate specific responsibilities and assign operational actions that need to be carried out to keep you on target.

For us those strategic goals were articulated as ‘six pillars of our business’. We needed to: increase sales and profits, be accountable for what we do, create long-term partnerships, act responsibly, continuously improve business processes, and enhance communication with all stakeholders.

If we can focus attention on these things then I and my senior management team firmly believe that the business will be in significantly better shape going forward – our financials will improve in line with the improved morale and productivity of our employees.

The most common error that senior managers make is starting a business strategy by just setting a financial goal. Too often you see strategies along the lines of ‘we need to achieve growth of 20 per cent next year to reach X turnover, while preserving Y per cent margins.’

This cannot work without setting a detailed framework for getting there – staff need leadership, not strap lines, which often requires a plan of what needs to be done in more detail. If senior management does not do this work then employees do not know what they have to do to reach new and often aggressive financial growth targets.

The worst-case scenario is they may think these goals are unattainable, become demoralised and leave. It is imperative to achieve staff buy-in from the offset.

Also, bear in mind that this is not just about your staff. Many others have a ‘stake’ in your business’ success: shareholders, suppliers and even those living in the local community in which you operate. You may well need to involve them in defining and realising your strategy.

In my discussions with managers running other businesses, a common stumbling block is paying too much attention to all the management theory, which is designed to help you formulate the ‘killer’ business strategy’. Although these can be effective often in larger organisations it is not always easy to adapt these for the small and medium-sized enterprise (SME) business environment.

It is very easy to get lost in the great theories of the likes of Michael Porter, the Boston Consulting Group or Johnson & Scholes. Schools of management thinking like Motorola’s highly influential Six Sigma have spawned a rash of quality management tools and the thinking has now been applied inside over two-thirds of the Fortune 500 companies including leading corporates like General Electric and Honeywell.

All these texts and tools form a useful and valuable framework for your thinking and are worth considering, but what really matters is developing and deepening your understanding of what the business you are leading is really trying to achieve. Then, create a framework and specific set of activities to enable you to get there.