“Strategies? Who needs ‘em?! When I started my business I didn’t need a strategy, I just did what I’m good at. I knew it would work! I’m a businessman, I don’t have time to write a strategy.”
All to often I hear retorts of this type. But can a business really survive without a strategy? Without a strategy where will your business go? Wouldn’t it bump from one idea to another, never achieving it’s full potential?
As I sit here typing, dog beside me, I am recovering from a week working with two very different organisations, neither of whom have effective strategies in place. One is a relatively small company of under 20 people, the other employs over 700. Neither really knows where to turn next. One knows what they want to achieve, but not how to get there efficiently. The other doesn’t even know where it is going!
The smaller of the organisations is typical of so many small and medium sized organisations. It was established by someone who has a passion for the area of business he is in. He truly sees it as his opportunity not just to make a living for himself, but also to make a positive contribution to his staff and, through his ethical beliefs, the community. However, the business does not know how achieve these aims and is in danger of going under if it does not change. This organisation has no strategy, but it’s leader has vision…
The larger organisation does not know what it wants to achieve, and, obviously has no idea how to get there (where ever there may be!). It does not have the benefit of a leader who has a vision.
What could a strategy add to either of these organisations?
Simple! It would give them clear direction. It would put down, on paper, the route that the organisation will tread and how it will get there. “What good is that”, I hear you say. I agree that most businesses (those that will survive) know what they want to achieve as an ultimate goal. But many do not know which path to take through the jungle of today’s world. It is all very well knowing that you want to be the best tree surgeon or the best widget manufacturer, but unless you know how you are going to achieve that goal you will flounder – and you will flounder fast.
Strategies do not have to be long tedious affairs. They must suit the organisation they are for. They need to be functional documents which you can pick up and refer to easily and quickly. They must be precise, setting out the aims and objectives of the organisation, and how these will be achieved. Clearly the more complex the organisation the more complex the strategy may be, but it should not be complex for the sake of being complex.
The problems that the small of the two organisation I referred to earlier would have been eased if it had had a strategy earlier in life.
This organisation is not currently making a profit. Why? In part this is due to the lack of pricing strategy (no price rises in over three years even though raw materials and fuel have increased considerable) – incredibly the lack of price change is partly due to the fact that a vast quantity of leaflets, with prices, were printed and “had” to be used up! Another reason that it has not made a profit in over three years is the unplanned, ad-hoc expansion – during which little or know thought has been given to the effect of such expansion on the rest of the organisation.
This is all due to the business bouncing from one point to another, following a no defiant route. Making decisions “on the hoof”. Changing direction to match today’s trend rather than following a long-term goal. A strategy would of helped the business stay on track. If the business had kept on one track and adjusted its prices to match the true cost of commodities and fuel, it may have been in profit. Having a strategy to refer to would of helped to ensure that they stayed on track.
The large organisation has money. It spends. It has goals. However it changes direction regularly. It is driven by a continual change in policy. It is reactive not proactive.
Organisations are driven forward and prosper under a good leader. Would you travel the length of Great Britain without a map? No. You may not get the map out of the glove compartment, but it is there for reference in case you come to a junction in the road. A strategy forms that map.
It makes the leaders of the organisation think about where they are going and how. Then, whilst on the journey it will identify the direction to turn at junctions in the road.
What are the two organisations mentioned? The smaller one is a land-based business founded on strong moralistic and ethical beliefs. With a strategy for development it is now looking at regulated expansion as and when it can afford to. It is looking at its product range and pricing. It will grow.
The large organisation? A public body. Where will it go? Where ever policy changes take it.
Get a strategy… Everyone needs a strategy. It is your map!