On many occasions, when I mention the word “strategy” with business owners, for some reason, it gets brushed aside as something that lives in the corporate world and isn’t really relevant in small business land.
I am always curious to explore this widely held belief and often probe a little further by asking what strategy means to them. The answer is usually some version of an intimidating boardroom filled with seasoned executives, deep in thought and discussion, deliberating how they plan to beat the competition, manage the uncertainties of a rapidly changing environment, and solve the complex needs of all the various stakeholders involved – to ultimately grow the business. Phew…. that was a bit of a mouthful, but you get my point. It is no wonder, I hear many say, “we simply do not have the luxury of spending time on thinking or strategizing our way to success. We actually have to get our hands dirty and do stuff!”
Perhaps there is some truth to this pre-conceived idea or representation and in not all cases do I prescribe working with small business owners on a specific strategic planning framework (at least at first). However, later in my work with clients, they often come to realise that we cover many parts of this process when focusing on specific functional areas and how they relate to each other. I like to describe strategy to clients as the sum of all parts. Frankly, it sets the tone, gives the business its identity and paves the way for making decisions. It would be very short-sighted for any business owner to not set out a plan that focuses on what is important and what it will take to get there.
I’m no strategy professor or strategy consultant, but I have been exposed to many models and theories in my business training over the years and also been involved in various levels of the strategic planning process across my corporate and start-up career. What I do know, is that small businesses are looking for simple and practical tools to help them move forward and achieve their desired goals. To this end, breaking things down for clients to help demystify the process of creating a simple strategic plan, not only galvanises the team, but also activates the required level of focus and determination to stay the course on the roadmap to success.
There is no hard and fast rule what a strategic plan needs to look like or even include, however I usually break it up into three main areas:
1. Fundamentals
The foundation of any strategic plan should always start with the big three – mission, vision and core values. And no, not in your head, but well-articulated and documented. Without these, the business has no soul or direction and will simply navigate like a boat without a rudder. This is also not a five-minute exercise and should involve as many people in the organisation as possible (not only decision-makers). I always recommend bringing in an external facilitator to unlock the potential of all participants and bring a sense of structure and accountability to the process. It helps everyone connect to purpose and how their individual contribution fits into the bigger picture. If executed well, this part of the process can often go below the surface and have the potential to closer align personal and organisational values. For solopreneurs, partnering with a coach or advisor can be a wise move in working creatively to unleash these powerful statements.
What many people do not realise is that by going through this exercise, they are developing valuable strategic marketing content. More than that, it serves as the baseline in the creative process for building even further marketing collateral down the track. The only caveat to consider here, is to ensure this process is reviewed at least on an annual basis or revisited and potentially reframed if the business organically or intentionally changes direction or focus.
2. Competitive Advantage
There is so much rich literature out there and countless models to help you identify your competitive edge and how to leverage it to your advantage. However, the perfect place to start can be as simple as drafting your positioning statement that forces you to reflect on and highlight what differentiates you from others and how you compete to win. Then there are a few simple questions I ask clients around capability, which again helps frame where their strengths and opportunities lie. Once documented succinctly in the strategic plan, designing the tactical action plan becomes much easier to execute.
3. Priorities
Once the foundations have been laid down, it is time to identify the key priorities within the major focus areas of the business over a defined period (suggest starting with 12 months for small businesses new to strategic planning). Again, there are different names and variations for all the different functional areas to cover, but in my view, the simplest way is to highlight the four strategic areas that include the customer, finance, people and operations. The process then involves setting clear objectives and key performance indicators to measure performance on a regular basis and making realistic adjustments where necessary.
A note of caution. It is one thing to create the strategic plan in the first place, it is a different story tracking performance against the plan on a regular basis. This is where I fear all the hard work goes to waste and why I shall always advocate the importance of seeking external guidance and support to be held accountable and stay true to the roadmap.