Growing Business and Strategy

Strategy warning signs:

No matter how you view strategy, any current and future potential investors, and your banking or finance institution will want to see a business plan incorporating your strategy. Strategies can be formal or informal, highly defined or opportunistic, having a strategy is however key to ensure a common understanding or where the business is going.

Having a strategy or plan is critical to provide leadership, direction, priority for actions and to manage the expectations of stakeholders. The strategy should be a working plan or work in progress, keeping the organization flexible and yet focused on what is to be achieved now and in the future. Smaller Businesses may find it hard to develop and follow a strategy due to the rapid growth and moves to follow new customers and markets.

No matter how informal or formal, the key is to have a plan you can succinctly explain to others

Warning signs for a lack of strategy include:

• No formal planning process or consistency in planning
• Inability of management to elaborate on their strategy
• Longs lists of actions, which are not followed up
• Loss of key customers
• Confusion as to what your core business actually is
• No time, the business owners or Directors do not have time...

By not dealing with the strategy issue:

• Difficulty in meeting forecasts and targets
• Actions can be ad-hoc, resulting in expensive experience
• Potential to loose focus on the core business or market
• Possible to get stakeholders off-side, who want to understand the strategy
• Loose customers
• Loose staff
• Quality of product or service may deteriorate

Common traps in developing strategy

Strategy in the middle market is not about high level idea generation. In general, middle market companies do not need to understand global trends on a ten year horizon for future capital expenditure and investment, like a large mining company for example may. Middle market companies are generally more concerned with what will happen next week, next month and the next 12-36 months maximum.

Strategy should focus on operational excellence at a management level. Members of senior management might then in turn work on specific projects to develop new markets or new products in a managed fashion, based on research and development. Business after all is a series of projects.

Generating high level strategy with too many managers, gets everyone exited, but little happens as most is beyond their realm of control.

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