One of the things I noticed in 2011 is that some businesses are wanting to learn the newest Social Media trick, the newest technology, the fastest way of earning without really taking the time out to look at how or whether what they are doing is really fitting in with their business strategy.
Also, I came across small businesses who think that strategy is for large businesses and doesn’t really include them. They simply want to make money doing something they love.
I think some of us put more strategic thought into going on holiday than they do into building a business.
17% of SME’s that do have a strategy only look at planning and strategy once a year.
I admit that over the last couple of years I’ve struggled to work my strategy and build my business in a strategic way, mainly because I hadn’t got clear for me what specifically I was doing or where I was going.
I did however, look at what I was doing on a monthly (sometimes weekly) basis to see if what I was doing was working and moving me forwards.
I’ve taken the past two years to get very clear about what I want for my life and what that means in terms of business and strategy. I have also learned the skills and knowledge that will allow me to fulfil my strategy.
So forgive me if I begin at the beginning by defining what I mean by strategy.
Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows:
“Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations”.
In other words, strategy is about:
|* Where is the business trying to get to in the long-term (direction)|
|* Which markets should a business compete in and what kind of activities are involved in such markets? (markets; scope, niche)|
|* How can the business perform better than the competition in those markets? (advantage)?|
|* What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete? (resources)?|
|* What external, environmental factors affect the businesses’ ability to compete? (environment)?|
|* What are the values and expectations of those who have power in and around the business? (stakeholders)|
The word strategy comes from the word strategia which means
“the art of the general”
The opposite of strategy is tactics which means “at arms length”
Which was used with hand to hand combat soldiers
Usually managers are dealing with the day to day tactical people problems and challenges at arms length.
But as a business owner that’s not all you should be doing.
Strategy is about stepping back from the day to day tactical management and concerns so that you can focus on a larger perspective of your work and its purpose. It will allow you to be proactive and to be an agent of change, to set your own course and to communicate clearly to your team and your customers where you are going.
While Strategy represents the big picture about “ doing the right things,” tactics are more about the details of “doing things right.” Strategy the direction in which the business will proceed while tactics determine how it will proceed.
Strategic Challenges for SME’s
The major strategic challenges for firms encompass how to please customers, win orders, and simultaneously achieve financial objectives on an on-going basis.
The competitive cycle continues on perpetually.
In a financial environment where we are facing on-going economic turmoil it is more important than ever that you have a strategy for your business, that you know the direction you are moving in and what you want to achieve.
Why Plan when things Keep Changing?
Strategy and planning in this volatile environment is important because it allows you to notice what is working and what isn’t, what has changed and how you can adapt your strategy and planning to achieve the results you want. It’s like playing a game, being aware of the moves and the underlying trends.
Key to strategy in the current markets is keeping unique and maintaining your differentiators so that you remain attractive to your customers and competitive in the marketplace.
“The message is clear. Businesses that review their business plans monthly are most likely to be riding the economic storm. According to our research, they are 42% more likely to be unaffected or booming during the slowdown. Businesses who are confident about the future are also three times more likely to have had a strategy in place for a worsened economic climate than those who fear for their survival.” (Rise of the super sme A GUIDETOPLAIN SAILING through the recession – Plantonics Research).
Some Questions to Ask Yourself?
- As the internet as a marketing tool becomes central to a number of marketing strategies, isn’t it key to include it with your overall business strategy and begin to assign time, resources and finance to it?
- Wouldn’t it be beneficial to plan out a learning and education strategy as technologies and markets change?
- Have you included a longer term strategy which includes Social Media and Internet Marketing in your planning this year?
- How often are you planning to plan?
- Where are you filing your Strategy and Plans for 2012?
If you would like a FREE 45 minute Business Planning and Strategy Session register before the 7th January to grab your spot.