Within our strategic planning practice we have worked with every conceivable type of business, large and small. Larger companies are more likely to engage in strategic planning, not because it is more relevant for them but because they tend to hire professional managers who understand the dramatic impact that a strategic plan can have on profitability and morale.
About half of our smaller clients engage in some type of strategic planning process, with varying degrees of formality. You may be wondering: why wouldn’t everybody want a plan?
One has to start by understanding the underlying psychology. We get caught in a trap, where the urgent nature of today’s work always takes precedence over strategy. We feel greater accomplishment from finishing routine tasks than attacking larger projects that deliver enterprise value but may require months to complete.
Find time to be thoughtful
To be fair, small businesses are more strained for resources than larger companies. They do not have dedicated people for things such as research and development. But regardless of size, every entrepreneur should find time to be thoughtful about the future of their company. We have a vivid memory of sitting with a really smart young entrepreneur who wept in her office out of fear she could lose it all.
The pressure on small business owners is immense, and a thoughtful planning process can chart a course to a successful future – one with more clarity and less stress.
One thing we have found is that many entrepreneurs have a plan in their head, and are under the impression that that is good enough. It isn’t. Lack of clarity manifests in poor decision-making about new products, who to hire, where to staff a sales team and what equipment to buy.
When these decisions are made in a vacuum and without sufficient data and context, a management team has to spend a lot of time unwinding mistakes. This is why the notion that we don’t have time to plan is really just a rationalisation (one could even call it an excuse). The greater proportion of our time we spend planning (instead of reacting), the less time we expend.
Other small business owners will rationalise that they can’t plan because the world is a volatile place; and it is. But the businesses that plan what they can control are in better position to react to the things that they can’t.
So here are ten steps for small businesses to build a successful strategic planning process.
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