STRATEGY

Why Have A Strategic Plan?

The vast majority of SME owners do not follow a strategic plan; most say they did have a plan originally while others say they have the plan ‘in their head’. Regardless, very few can articulate their strategy. Businesses without a strategy do not realise, or comprehend, that they will not reach their goals and are likely to be amongst those that do not survive. Of 294,210 business that started in 2010-/11, only 147 100 remain today (ABS). Of that, small businesses employing less than 19 people, accounted for 60% and medium businesses employing 20-199 people accounted for 25%. Approximately 55% of businesses who failed did not have a strategic plan (MGI business survey 2013, RMT Prof. Smyrnios).

Why Don't SME Owners Have Plans?

Owners and business leaders concede it is due to:

  • Having a pre-conceived idea, often wrong, of what strategic planning is. Hence they are put off by the process.
  • Having a fear of commitment. A benefit of strategic planning is that it leads to decisive action. Unfortunately, many owners can neither make the required decisions or commitments. They would rather not do it, than try and not see it through. Failing is viewed as ‘shameful’ or ‘embarrassing’.
  • Having had some negative and possibly harmful experiences with strategic planning in the past. It may have been a bad experience with an external consultant, or perhaps they launched a plan without any means of accountability.
  • Worrying about the amount of time and commitment required to develop a plan and that it will keep them away from other work.
  • Many owners are only accountable to themselves; that really means they are not accountable to anyone. With strategic planning, there is a system of accountability built into the plan and many struggle with this.
  • Unfortunately, many owners and leader are very uncomfortable with having to concede they may not know or understand how they intend to reach their business goals. Being confronted with issues or problems during the strategic planning process is something many would rather avoid.

How I Can Help

It is clear to me; businesses that perform at the highest levels have some sort of formalised strategic plan in place and have implemented it well. Businesses that struggle at attempts to be successful have no plan in place.

I will assist you in creating a roadmap to success- after all, business is all about planning for success. A strategic plan will help to provide direction and focus for everyone involved in your business. It points to specific results that need to be achieved and establishes a course of action for achieving them. As part of the process, your strategic plan will help the various work units, or people, within your business to align themselves with the company’s common goals. This is a very important, but seldom understood, part of the plan.

There is no more critical element to the success of a strategic plan than the execution of the plan. Unfortunately, even when so much time and energy is spent developing the plan, it is frequently not implement correctly, or receives little focus and commitment.  The plan needs to be be easily understood by everyone in the company and each person needs to be held accountable for their part of it. I will ensure that you know ‘who is going to do what by when’. This means any issue confronting the company is quickly identified by the correct person, and can be actioned.

Throughout the process, I ensure that there is a clear distinction between strategy and planning. It is really straightforward but often over complicated or not fully understood. Strategy is about understanding your environment and making choices about how you will make things happen. Planning is deciding how to use the available resources and skills to support the strategic plan you have implemented.

Without competitors you would need a business plan but you would not need a strategic plan. Strategy distinguished itself from business planning because it alone defines what is needed to give you a competitive advantage over your competitors. You need to gain a sustainable edge for as long as possible over your competitors, and so doing achieve the best possible returns for the company’s shareholders or stakeholders.

Businesses suffering poor strategic management
44%
Businesses with inadequate cash flow or high cash use
40%
Businesses suffering from trading losses
33%

Australian Securities and Investments Commission 2012

Why Have A Strategic Plan?

The vast majority of SME owners do not follow a strategic plan; most say they did have a plan originally while others say they have the plan ‘in their head’. Regardless, very few can articulate their strategy. Businesses without a strategy do not realise, or comprehend, that they will not reach their goals and are likely to be amongst those that do not survive. Of 294,210 business that started in 2010-/11, only 147 100 remain today (ABS). Of that, small businesses employing less than 19 people, accounted for 60% and medium businesses employing 20-199 people accounted for 25%. Approximately 55% of businesses who failed did not have a strategic plan (MGI business survey 2013, RMT Prof. Smyrnios).

Why Don't SME Owners Have Plans?

Owners and business leaders concede it is due to:

  • Having a pre-conceived idea, often wrong, of what strategic planning is. Hence they are put off by the process.
  • Having a fear of commitment. A benefit of strategic planning is that it leads to decisive action. Unfortunately, many owners can neither make the required decisions or commitments. They would rather not do it, than try and not see it through. Failing is viewed as ‘shameful’ or ‘embarrassing’.
  • Having had some negative and possibly harmful experiences with strategic planning in the past. It may have been a bad experience with an external consultant, or perhaps they launched a plan without any means of accountability.
  • Worrying about the amount of time and commitment required to develop a plan and that it will keep them away from other work.
  • Many owners are only accountable to themselves; that really means they are not accountable to anyone. With strategic planning, there is a system of accountability built into the plan and many struggle with this.
  • Unfortunately, many owners and leader are very uncomfortable with having to concede they may not know or understand how they intend to reach their business goals. Being confronted with issues or problems during the strategic planning process is something many would rather avoid.

How I Can Help

It is clear to me; businesses that perform at the highest levels have some sort of formalised strategic plan in place and have implemented it well. Businesses that struggle at attempts to be successful have no plan in place.

I will assist you in creating a roadmap to success- after all, business is all about planning for success. A strategic plan will help to provide direction and focus for everyone involved in your business. It points to specific results that need to be achieved and establishes a course of action for achieving them. As part of the process, your strategic plan will help the various work units, or people, within your business to align themselves with the company’s common goals. This is a very important, but seldom understood, part of the plan.

There is no more critical element to the success of a strategic plan than the execution of the plan. Unfortunately, even when so much time and energy is spent developing the plan, it is frequently not implement correctly, or receives little focus and commitment.  The plan needs to be be easily understood by everyone in the company and each person needs to be held accountable for their part of it. I will ensure that you know ‘who is going to do what by when’. This means any issue confronting the company is quickly identified by the correct person, and can be actioned.

Throughout the process, I ensure that there is a clear distinction between strategy and planning. It is really straightforward but often over complicated or not fully understood. Strategy is about understanding your environment and making choices about how you will make things happen. Planning is deciding how to use the available resources and skills to support the strategic plan you have implemented.

Without competitors you would need a business plan but you would not need a strategic plan. Strategy distinguished itself from business planning because it alone defines what is needed to give you a competitive advantage over your competitors. You need to gain a sustainable edge for as long as possible over your competitors, and so doing achieve the best possible returns for the company’s shareholders or stakeholders.

Businesses suffering poor strategic management
44%
Businesses with inadequate cash flow or high cash use
40%
Businesses suffering from trading losses
33%

Australian Securities and Investments Commission 2012