Too many people falsely believe that strategic thinking, formulation and implementation is only for the big outfits…you know, the Toyotas, Microsofts, Honeywells, Nokias, and the Exxon Mobils. Our experience, working closely with people from all walks of life and from all sizes of organization, suggest the opposite is true — smaller organizations need to be more devoted to strategic thought and action as much or more than the big players out there.
The most important strategic thing a small organization can do is prepare to do battle with the future, which entails five steps.
- Step 1: Anticipate both threats and windows of opportunities for the vision and mission of the business.
- Step 2: Decide how to respond to these emerging threats and opportunities.
- Step 3: Identify the source which those risks and opportunities will come from.
- Step 4: Figure out when the risks will hit or if the opportunity is truly valuable.
- Step 5: Execute actions to mitigate the threats or take advantage of the opportunities.
Again, let us emphasize that for practical purposes you don’t need to create a doctoral dissertation when implementing strategy. Strategic planning for a small business doesn’t have to be as formal, as long, or as detailed as with a large company. The most important thing to do is strike up a dialogue with your customers, employees, vendors, investors, and do your homework about your competitors. It helps to talk about your strategy with a partner, advisor, or trusted consultant to bring some clarity and focus to your mind around the strategic issues that could affect your business in the future. The biggest disservice a small business leader can do for an organization is be unprepared or surprised by unfolding events. Even if you simply think things through in your mind and then briefly share your strategic ideas or decisions with your employees, you will be ahead of the curve and helping people to understand how they can connect with your strategy.
If you’re a small business working toward a strategic plan (know the difference between a strategy and a plan) and you commit it all to paper in a short two to five page plan, so much the better! You just moved ahead of many of your competitors. Invite your strongest employees to respond to your strategic issues, concerns and get them involved so they feel some ownership in this simple process. Have a strategy adaptation meeting with all hands twice a year for a couple of hours to clarify the direction, make adjustments and respond to questions.
Your strategic analysis should look at six aspects of the business.
- Your customers: Figure out who your customers are now, who they will be in the future, how they are changing, and what they will want in the future.
- Your people and talent: What skills and capabilities will be needed to address the threats and opportunities? How many people, what kind of new roles will be needed, how will people’s roles change in the future to handle the threats and seize the opportunities? Will the organization grow and are we developing the leadership to manage the changes coming?
- Suppliers and Vendor: Can they give you what will be required to meet future challenges? Are there new offerings that can help you resolve your particular business issues?
- Competitors: Who are the players in your market? What are the strengths they offer? How can you take advantage of their vulnerabilities with your unique capabilities?
- Products and Services: Are you preparing something new, refreshing, and value added for your customers or users which enable them to be more productive?
- Organizational infrastructure & technology: What will the organization need to do differently in the future to keep up with new and emerging customers? Are you using technology to improve productivity?
Strategy really isn’t rocket science; rather it is a common sense and a willingness to ask some challenging questions. Be willing to think it through, communicate with others, and solicit additional perspectives. Write down your conclusions and share them with your organization. Finally, issue a call to work on strategic action each day to compliment the routine tactical work that has to be done to pay the bills and meet current obligations. Help your small business stay ahead of the curve – starting today!