Part 6 of our blog article series: "Strategies for business success"
The end of the financial year approaches and is typically a time when business owners review the year that's been and look ahead to the one approaching. It's a time for reflection and stock-taking, both in the literal and figurative sense: has the company grown, progressed, improved? Has it suffered slumps and dips in sales and/ or production, and if so, how can these be mitigated or avoided in 2017/2018?
It's all very well to gather your team and banter around ideas for new schemes to try in the upcoming year, however all you are effectively creating is an extensive to-do list which may or may not achieve the results you are after. The trick is to make informed decisions on what to exclude, as well as what to incorporate.
"the difference between successful people and VERY successful people is the VERY successful people say "no" to almost everything" Warren Buffet (investor, business magnate and philanthropist)
Businesses are sometimes concerned that by eliminating options from their business strategy they are putting caps on their potential success, however you can never hope to excel at everything. Strategy is knowing what to say "no" to, as much as it is about knowing what to say "yes" to. If you don't make any trade-offs, you don't have a strategy. You are basically firing arrows in a dark room, hoping something will hit the bulls-eye.
A successful business strategy addresses both the 'microscope' and the 'telescope': improving the here and now moment (the 'what is') and the long term vision (the 'what will be'):
The microscope – improving 'what is'
With the benefit of hindsight you can look back on the previous year and identify which things contributed positively to your efficiencies, productivity, sales, marketing, etc. Using data and statistics (such as KPI's, marketing campaign results, productivity reports) to help you determine which of these had the biggest uptake, and then allocate resources to maintaining, developing and improving them.
Conversely, which failed or had nil effect? These should be culled, or at least critically reviewed to see if the reason for their failure is evident – if the idea was solid but the planning and/or execution was lacking, decide if improving the shortcoming(s) can save it from the trash bin.
What new ideas, processes, campaigns, efficiencies can you and your team come up with, and which of those show the most potential? Again, you cannot adopt them all – decide on the best of the best, and drop the rest. You can always revisit ideas during your next review and decide if their scope or value has improved.
The telescope – improving 'what will be'
"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change" Charles Darwin
Technology is moving at such a rapid rate that it will (and does) devour businesses and industries whole if they are not responsive to change. And reacting as soon as the warning signs appear can often be too late; you need to be proactive and develop your business strategy with a view to looking ahead – 3-5 years at least, but ideally longer.
"the digital era will dwarf what occurred in the information era. It'll be a brutal disruption, the majority of companies today will not exist in a meaningful way 10 to 15 years from now" Cisco's CEO, John Chambers
What up-and-coming new entrants to the global industry scene could disrupt your business model? What changes to your supply chain, or expectations from customers, could you reasonably foresee, anticipate and plan for? Unlike short-term planning, long-term planning is not about performance improvement. It is about forgetting the past and reshaping your business to compete more effectively in the future.
Get your team involved
This is critical – no strategy will work if your entire team is not informed, involved and, above all, committed to the cause. Everyone needs to know the grand plan, as well as their respective part to play. Hold frequent team meetings where progress can be tracked, and hold everyone accountable for achieving their own targets and project deadlines.
Establish your capacity to implement your strategy
Anything you have decided to pursue is likely going to involve some investment, either in the form of new skills, new products, new services, etc. Enlist your accountant to complete a return on investment (ROI) analysis if you require new equipment or additional staff. This will help you establish how much revenue needs to be generated in order to turn a profit or provide benefit to the company, and also how the business can access the funds for growth. For example, will you need a larger credit line or new capital?
As always, we are only a phone call or e-mail away if you require assistance with your business's strategic planning – we'll be happy to help.
Keep on eye on our blog this month as we present a series of articles on
strategies for business success
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