3 Must-Know Fundamentals for Smarter Business Strategies

Want to build a smarter, more profitable business? Start with these three fundamentals. In this video, Steve shares battle-tested insights from years of helping companies—from startups to billion-dollar brands—unlock real strategic growth.

You’ll learn why strategy is never “set it and forget it,” how to tie it directly to your financial goals, and why focus is your most powerful asset. Steve also reveals how to identify your biggest constraint—and turn it into a catalyst for profitability.

If you're ready to stop spinning your wheels and start leading with clarity, this is where to begin.

TRANSCRIPT:

If you're running a business, it's actually really easy to get strategy wrong. So in this video, I'm gonna explain the three fundamental things you must know in order to maximize the value of your company and not blow it up or run out of cash in the process. It took me a long time to figure out point number three, so I'm gonna emphasize that at the end and explain exactly how I use it to turn around and grow companies.

My name's Steve Coughran, I'm the founder of Coltivar. I've been doing this for a long time. I've been a CFO, I've been an owner of a company, and I know exactly what levers to pull because I've created over a billion dollars in value in the process.

Let's go ahead and jump in.

Number one is that strategy is never done, right? Strategy is not a one-time event. It's not about getting your whole team together, writing out some hotel conference center, and then going through a SWOT analysis by writing out your strengths, weaknesses, and opportunities and threats, and creating a laundry list of things to do for the year and calling that a strategic plan.

In fact, somewhere along the line, I don't know where this happened, but somebody thought planning was too boring, so they wanted to make it more sexy, so they added the word strategy to it. So that's where you get strategic planning from, and too many companies go down the path of creating strategic plans. But a plan is just a plan.

You have to have a strategy to understand what the plan actually is, so it's kind of backwards, right? So a lot of companies engage in strategic planning, but they don't have a strategy. Also, when I say strategy is never done, it's because it's a system. It's a process for making interrelated choices about where you're going to focus your attention.

More on that later, especially as we get into number three. But what I want you to understand is that strategy is ongoing. When I work with companies to turn them around and to grow them, oftentimes the CEO will say, okay, how long's the engagement? When are we gonna be done with strategy? And I say, we're never done with strategy, but that's the good news because I'm gonna teach you the system to follow in order to identify constraints and then to focus attention on the things that really matter in your business so you can maximize value, all right?

So that's the first thing that I want you to understand, which leads into point number two.

When it comes to strategy, you have to combine strategy and finance together in order to maximize value. I've been talking about this for a long time, over a decade. In fact, I created a course called Strategic Financial Leadership at the University of Denver, and I taught this to students and it was a big hit.

I've also done conferences where I've spoken about strategic financial leadership and it's really taken off. And the reason why I'm so passionate about strategic financial leadership and just this idea of connecting strategy and finance together in order to drive value is because here's what I see out there in the world.

Some so-called experts will go down the path of strategy. So they'll go into a company and they'll say, look, we're gonna help you with your strategy. And it's really just a glorified marketing plan. They'll identify their mission, their vision, and their values.

And I'm not saying there's anything wrong with that. I'm not poo-pooing on mission, vision, values. I'm just saying that those alone are not a strategy in itself.

So companies will think they have a strategy, right? They'll identify their mission, their vision, their values. They'll create a laundry list of things to do and they'll say, okay, that's strategy. But if there's no connection to finance, then value isn't going to be created.

I've seen this happen a million times, all right?

Now, on the other side of the equation is you have finance. And that's where you have a bunch of nerds. And I can say nerds because I am one of those.

I'm a CPA. My whole background's in accounting and finance. But they'll create these spreadsheets and these big, intricate financial models.

And they'll show growth, right, into the future. And they'll show a big, fat bottom line and all this cash flow sometimes. But they have these financial models nonetheless.

And they'll say, okay, this is our path forward. Well, a financial model is not a strategy either. So you can't have the nerds over here creating financial models and forecasts about how bright and beautiful the future's going to be.

And then you can't just have mission, vision, and values in a big laundry list of things to do and call that a strategy without them connecting together.

Introducing the bridge, right? That's where Coltar comes in. And when we're working with companies, we create this bridge between the two because you have to connect your strategy saying, all right, we're going to expand internationally.

We're gonna have these different locations. We're gonna compete on differentiation. And you have this whole strategy over here.

But then you have to understand, okay, well, how much cash do we need to make this strategy actually feasible? And what's our return on invested capital if we pursue this strategic option versus this other strategic option?

Case in point, years ago, I was a CFO of a large solar company. And we were in charge of building those massive solar farms out in the middle of the desert, out in the middle of nowhere. Well, guess what? In the United States, tariffs hit solar panels and steel, and all of a sudden, the solar market shrank, especially the utility-scale solar projects that we were doing.

So we had to pivot because we saw our revenue collapse massively. So what we did is we evaluated different strategic options. We considered doing a joint venture with another company, vertically integrating, and even expanding internationally.

And this is where finance comes into play because we had the strategy, we identified strategic options, and then we modeled them out to identify, okay, how much cash are we going to need with each option? And what's the potential financial upside? And after doing this, we decided to expand into Australia. And we did that successfully. And we were able to secure over $300 million of work in our first year.

So you have to have a bridge between strategy and finance in order to drive value. And that is point number two.

All right, moving on to point number three. And I can tell you, this took me so long to figure out. I wish somebody would have just explained this back in the day when I was studying strategy back in school. And if they sat down with me and said, Steve, focus on this one thing, it would have made all the difference in the world in my early career.

And it's this. Strategy is all about focus, all right? Think about it. In the world today, there are so many distractions, there are so many opportunities, and there are so many possibilities to pursue.

So the best companies that I work with, those that really thrive, are those that can focus their resources on solving constraints. So in Coltivar's strategy framework, we call this the strategic problem. And we spend so much time on helping companies to identify their strategic problem, because if you don't clearly identify what your problem is, the constraint, the number one obstacle that's choking your company and preventing it from growing, then you're gonna be pursuing a bunch of random things that won't move the needle.

So what we do is we help organizations to identify their strategic problem. And I've done other episodes about this, so be sure to check out my other content if you wanna learn about how to craft a strategic problem statement for your organization.

But identifying the biggest problem that a company is dealing with, which is their constraint, what's constraining them from growing, and then getting laser-focused on the initiatives and the actions and the key results that will measure the company's ability to overcome this constraint is what strategy is essentially all about.

And this is what took me so long to figure out, because I've always been so organized. I've always been very ambitious and hardworking. But in the past, what I would do is I would make this list of things to accomplish, whether it was for myself or for my company.

But we were working on B and C and D tasks instead of on A tasks. And when I say A tasks, I mean the most important tasks that will help your organization to overcome its constraint, its strategic problem.

So that's where the framework is really important with strategy, because sure, you may have mission, vision, and values identified, but if you don't get super clear on the strategic problem you're trying to overcome, you're gonna be all over the place.

And guess what? When it comes to initiatives, strategic initiatives, those initiatives are designed to help you to overcome your strategic problem. And that's how it all ties together.

So when I work with companies, I have a variety of tools that I put in place to help them to identify their biggest problems.

And then once we have these problems identified, we narrow it down to the number one problem or the number one constraint that's preventing the company from growing and achieving its purpose. And when organizations can focus on this one constraint, solving this one constraint, everything else goes away, which is really difficult, right? It's a mindset shift for a lot of organizations because so many organizations out there, they're well-intentioned, but they're focused on the wrong things. They're hardworking, they're smart, they're energetic, they have cash.

Oftentimes, they're just focused on the wrong things and they burn a ton of cash, time and energy in the process. And I don't want that to happen to you because I went down that path several times in my past and it was very painful.

So learn from my mistakes and stay focused on solving your strategic problem and make sure all your initiatives and all your actions underneath those initiatives are supporting the efforts of the company to overcome your strategic problem.

And guess what? Once you overcome your strategic problem, that number one constraint, something else is gonna pop up. But the good news is if you follow this approach, then you're gonna stay laser focused on what matters the most. Because if you're over here doing B, C, and D tasks that are related to another problem in the business, you may find yourself wasting a ton of energy because once you solve this constraint, another constraint's gonna emerge.

If you spent all this time over here trying to fix these other problems, guess what? It may be in vain because those problems may not exist anymore once you solve this other constraint.

That's what I'm laser focused on when I'm working with companies. I get so obsessed with the constraint and helping them to focus their attention on solving their constraints by first identifying the strategic problem they're trying to overcome and then teaching organizations about initiatives, actions, and results.

I call that the IAR framework in order to make progress and to drive tremendous value in their companies.

All right, that's all I have for you. Go out there and execute. And until next episode, take care of yourself. Cheers.