Lots of private business owners we know feel this way because their private business has achieved a high degree of success without strategy. Why should they start now?
- Because too many private companies get stalled at the natural level of success that’s possible by spotting a market opportunity and filling a gap. Yes, spotting the opportunity and taking advantage of it is clever (it’s central to being an entrepreneur). But plateauing like so many private businesses do is frustrating and dangerous. Developing and implementing strategies that stretch the organization beyond the original market opportunity (the natural market for the original smart phone was several $billion!) is the only way to avoid plateauing and stalling.
- Because good, new market opportunities attract competitors and other risks, and the natural level of any opportunity gets disrupted. Anticipating, understanding and working around these risks doesn’t just happen. In the book ‘Losing the Signal’, the leaders of Research in Motion (RIM – the inventors of the Blackberry) are clear that when Apple launched the iPhone they had no strategy for competing with it. Forced into reactive mode, their business was rapidly overtaken by competition.
Here are four simple suggestions for becoming more strategic in a private business:
- Do a SWOT analysis. Strengths and weaknesses are internal. Opportunities and threats are external. How to make your SWOT successful: get some outside perspective – lots of times we don’t know what we don’t know.
- Define the mission of the organization. Who do you serve and how do you serve them? A clear mission ensures the organization is important to customers and meaningfully different from competitors. Getting motivated to define the mission is simple: ask staff what they think the mission is and listen to their answers. If their answers don’t match up, they’re not working on the same business!
- Define 1 – 3 strategic goals for the next 1 – 3 years. A goal is strategic if it answers the question ‘how will this help us achieve our mission better?’. Generally, these goals fall out/are consistent with the SWOT analysis.
- Define a game plan for achieving the strategic goals. Simple, right? No. This is where most strategic plans break down. Without clear steps and accountability too many strategic plans just sit on a shelf.
Finally, being strategic means reviewing and updating the strategic plan on a regular (annual is fine) basis. A critical mistake is to write a new strategic plan without analyzing how well the previous one worked. When that happens, it’s obvious the organization isn’t focused on strategy.