“If you don’t know where you’re going, any road will get you there”
In my view there are two major problems facing small business when it comes to strategic planning. The first is not knowing where they’re going. This means not taking the time out from “doing it, doing it, doing it” to strategically look at the direction they want their business to head in.
The second, having identified where they are going, is a failure to implement. That is, the things that need to get done, don’t. This is usually because there is a lack of follow up, largely because in small business, the owners are so busy ‘doing it’ that priority is not given to ensuring action plans are implemented.
Now, Where, How
Invariably, I find that one of the biggest issues facing small businesses is simply getting started or not knowing where or how to start. This is completely understandable if the business has not undergone a process like this before.
In my view, the keys to successful strategic planning are:
- Having a process to work through which helps in formulating the vision for the business.
- An action plan (i.e. who has to do what, by when).
- A follow-up program to ensure the action plans are implemented.
Typically, this involves preliminary discussions with key stakeholders plus a one or two day workshop. The content of the workshop clearly needs to be tailored to the particular needs of the business and the issues they currently face. However, as a guide (and for businesses who may not have been through the process before) I find that including the following items in the workshop content is a good starting point:
- A strategic SWOT Analysis: I find that most business undertake a SWOT Analysis but miss its real value. I recommend using the SWOT to actually develop strategy. That is, having identified the strengths, weaknesses, opportunities and threats, I then ask the following questions:
- How do we use our strengths to capitalise on our opportunities?
- How do we prevent our weaknesses limiting our opportunities?
- How do we use our strengths to overcome the threats?
- How do we prevent our weaknesses from compounding with our threats?
- Create the vision: Do you have a clear vision as to where you want to take the business going forward, and do all the key stakeholders share that vision? My experience is that some work may be required in this area for most businesses. When a business can’t create the vision of where it wants to go, the development of action plans is useless. Again, it is often useful to use a process to help in formulating a clear vision for the business and obtaining “buy in” from all stakeholders.
- Identify your Sustainable Competitive Advantage (SCA) i.e. why should your customers buy from you rather than your competitors? Sometimes there is also a lack of clarity as to what this is for a business and how you can market to it effectively. Having a clear process is often a useful way to work through this.
- Categorise your products according to which ones are adding value and which ones are destroying it. I use the BCG matrix. Some businesses manufacture a product that has no future (what we call ‘dogs’) while others may have great market appeal and high profitability (we call these ‘stars’). Each has different characteristics and life spans. It is important to understand your ‘dogs’ from your ‘cash cows’ and ‘wildcats’. Many businesses don’t do this.
The Action Plan
I believe that a crucial part of the process is developing and documenting a “one page plan”. This is a living breathing document detailing who has to do what, by when. If your business plan doesn’t have this then the chances are that very little is being implemented. The one page plan clearly sets out where the business is NOW, WHERE the business is headed and HOW the business will get there.
This can be a real trap for some businesses. They go away with a clearly defined vision and action plan stating who has to do what, but nothing happens. We call this FTI or Failure to Implement.
My experience is that just holding a workshop will not get you where you want to go. It is imperative that afterwards you have someone, usually sitting in on your monthly management meetings, to guide, monitor and hold you accountable to ensure that the action plans are being implemented.
An external facilitator can “turn up the heat” when the hard decisions have to be made, but also act as an impartial party to provide an external focus for the business.
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