Company Strategy Puts You In The Driver's Seat
Cook
It's late on a Friday and you just survived another hectic week. It seemed that every time you turned around, there was another crisis to tend to or another emergency cropping up.
As you reflect on the week and all previous weeks that were just as demanding, you begin to wonder if there's any way to break out of the cycle. How can I gain control of this business? Can I ever get to the point where I run the business, rather than let the business runs me?
To answer these questions: Look at your business through the lens of success, applying philosophies and practices that are inherent in successful businesses. This means becoming proactive in your business practices instead of being perpetually reactive to problems.
The first principle of successful businesses is a vision of what success looks like. If you don't know where you want to go, then any road will take you there. If you have a vision of where you want to be, you're empowered to say no to all options that don't get you there.
Next, combine vision with planning; this is the essence of strategy. A strategy creates context and direction; it's a litmus test for decisions. When you're presented with an option, simply ask: Does this activity move me closer to my goal? If yes, plan it, implement it and measure it. If no, move on.
A strategy also becomes a blueprint for developing and maintaining superior competitive advantages in the marketplace. Effective strategies help identify customer requirements and marketplace conditions where you can establish superiority, not only in your mind but also in the customer's.
Strategies are especially important for smaller businesses because they're extremely vulnerable to the smallest changes in the marketplace. Changes in customers, moves by competitors, or changes in the overall business environment can directly impact cash flow in a very short time frame. Negative impacts on cash flow — if not anticipated and adjusted for — can force a company to close. So, proper planning helps anticipate what the future may hold and adjust thinking and actions to compensate for potentially negative impacts.
If strategies improve results, why do small-business owners even think twice about it? Here are four common objections and the reasons why you should overcome them if you want your company to grow.
"I'm small. I don't need strategic planning."
If you believe you're small and approach business in that manner, in all likelihood, you will remain small. Strategic thinking and planning helps you see beyond the present and envision what you can be. More important, it helps you determine how to get there.
"I don't have time for planning."
Developing sound strategies takes time and commitment. The motivation to dedicate the time and effort must come from you. If you find the motivation, the payoff could be enormous.
"If I have to stick to a strategy, it might limit my choices on how I run my business."
Strategies empower you with the ability to say no. Resources, especially time and cash, are the lifeblood of small companies. Everything new is not always shiny. A company does not have to be all things to all people.
Developing a strategy forces a choice between various courses of action. By choosing one, you implicitly reject the other. That's OK because a strategy is an ongoing process. Choices are based on having the best information available. As the information and situation change, you re-evaluate and move forward again.
"If I stick to a strategy, I may be wrong. I can't afford that."
Business activities involve risk; strategic planning is no exception. The risk, though, is a calculated one, and, as such, is minimized. Your decisions are based on knowledge, not assumptions.
In summary, effective strategic thinking and planning will:
• Improve business decisions, where you make decisions based on the best information available.
• Enhance your understanding of customers. The better you understand your customers, the better your chance to get them to spend more with you.
• Improve customer relations. This one is simple: If you understand your customers, you'll be better equipped to supply them with what they need.
• Increase the probability of beating competitors. If you can anticipate their actions, you can counter them.
• Allow you to use resources more effectively. Strategic planning helps you plan effectively for their use, optimizing the return on your precious resources.
Strategic planning should not conjure up visions of endless paperwork, pointless meetings and non-productive bureaucracy. In clear and concise terms, a strategic plan defines the goals and identifies the steps to achieve them.
Just as important, a strategic plan is a dynamic document that changes as the business and environment changes.
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Ken Cook is managing director of Peer to Peer Advisors and developer of "How To WHO: Selling Personified", a program for building business through relationships. Learn more at www.peertopeeradvisors.com.
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