Your company needs a strategic plan

It is common for some entrepreneurs and directors to say “my company is small. We don’t have a lot of money. Isn’t strategic planning

It is common for some entrepreneurs and directors to say “my company is small. We don’t have a lot of money. Isn’t strategic planning for bigger companies?”

A strategic plan is like balanced diet to the human body. Both the young and the old need it. The baby may grow, but chances of being sickly are very high. If you have ever attempted to drive at night, you must put on driving lights. Otherwise, you will not go far. It is like driving while it is raining, if your car windshield wipers are inactive, you will lose visibility and stop. Some drivers may try to move, but they do so at a high risk of accidents and sudden stop. That is what you do with your business when you decide to run it without a clear strategy. it may continue operating, but it moves at a slower pace since the driver (CEO) cannot see far ahead.

It does not matter how small your business is, if it does not have a strategic plan, chances of hitting road bumps are high. The company may appear to be growing or succeeding, but usually it does not grow at the pace it should if it had an organic strategy.

I met small local manufacturer at a dinner in one of the upscale hotels in Kampala. He asked what I do to which I replied “I help plant seeds of transformation for business growth. I improve my client’s condition.” Intrigued, he turned to me, and asked “How?”

To which I replied, “I work with executives like you to develop an organic strategy that provides clarity of the destination and the route, as well as individual staff roles in the journey thereby empowering people at the front lines to execute.”

“My company is small. We don’t have a lot of money. Isn’t strategic planning for bigger companies?” he intoned.

You need a strategy to transform your small business into a big one. Freewheeling opportunism or doing whatever comes up may take you somewhere but cannot take you far. ‘Opportunitism’ should be part of a bigger picture. Otherwise you risk mission drift or being thinly spread which usually leads to cashflow problems. Like a baby that lacks a balanced diet, they will grow. But they will not be healthy. Sometimes the impact of the deprivation may come later in their old age. That is what lacking a strategic plan for a small company may lead to. Unsustainable growth.

You need a strategic plan – a strategy and a plan – because you have scarce resources and market opportunities to tap into. Some businesses have the capital and money they need, but lack customers or steady supply of raw materials. Others have all, but lack skilled manpower. Yet others have all these, but their challenge is make-up and teamwork. Whenever you have scarcity of either money or machines, you need a strategy to help you make the right choices to deploy your resources to deliver maximum value.

It is common to find a CEO regretting about lack of money, yet security lights are kept on even at midday. And over 20% of the current staff are in jobs they don’t deliver any value to the business. A simple staff redeployment analysis and restructuring to align the company structure to strategy and not the other way around, would help save over 30% of the annual costs!

However, you cannot do this unless a company has a clear organic strategic strategy with an enterprise scorecard.

It does not matter how great a driver is, if they are blindfolded they will hit all the potholes, on-coming cars and anything in front of them. You need to drive with your eyes open. Running a business without a strategy is like driving a car at night without driving lights. First, you drive slower. And you increase the risk of head-on collision with on-coming cars. This risk increases regardless your cautiousness.

If you want to reach your destination, use a compass. A strategy provides clarity of the destination and the direction to take. It is more critical when you don’t have enough resources. That is the essence of strategy: optimizing available resources to win with your customers and stakeholders against the competition.

To see how Summit Consulting can help you craft an organic strategy, click here. For a leadership talk on strategy or board briefing, click here. To download free resources, click here.

To become Certified Risk Strategy Professional, click here.

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