Why is business growth seemingly more and more difficult to achieve?
There’s no question companies are facing internal and external pressures more frequently than ever before, with the pace of technological change and competitive pressures, but a company’s growth doesn’t happen by accident.
One reason may be the way you are doing your strategic business planning. says Shelly Bernal, a consultant with Florida SBDC at FIU, the small business development center within FIU’s College of Business. She is an expert on business strategy and international trade.
Your process should be a disciplined approach to problem solving, she says. It should provide the structure for a thorough analysis and it should challenge assumptions and conventional wisdom, she said. It’s a very revolving process.
The process should be collaborative, agile and data-driven, she said. The keys to an effective strategic decision making process are focus, thoroughness, linking everything together, creativity and iteration, Bernal says.
The most important part of the process is your situational analysis, she said. “That is taking stock of the current situation inside and outside your company, gathering and sorting all the data and facts, and figuring out what are the most important takeaways – and then come up with an action summary.”
In doing this, think about your competitive advantage and the opportunities that could present themselves. Examine your strengths and weaknesses compared to the competition and the opportunities in the current environment, she said.
By the way, your strategic decision making process should have a time element attached to it, so it doesn’t creep along too much. Then of course then you need a plan to make the decision, keeping your team and key partners, and perhaps your customers, informed. Communication is key.
In a presentation on strategic growth, she presented her tool box, a structure for problem solving, and it should involve challenging your assumptions, Beranal said.
Above all, make sure you monitor the results – both what you expected and didn’t expect. If you are not monitoring how you are doing, you cannot make iterations as needed.
Other food for thought from Bernal: Are you changing your strategies to continue to meet the needs and wants of your customer in the “new normal”?
For example, the supply chain is transforming rapidly, and that has significantly affected Miami-Dade small businesses, she said.
Another example of what you may need to change or iterate on is your core business model. Is it keeping up with the current environment? Don’t be afraid to challenge the way you have always done things. Sometimes you need to look at expanding into adjacent markets to find your growth.
“Most business models are product centric. You need a consumer-centric focus. Businesses don’t typically fail because they lack a product or service – they fail because they lack customers and a proven financial model. The difficulty is in how you attract and secure customers,” Bernal said. “Your target customer may be changing over time, Are you changing as well?”
Start evaluating your assumptions about revenue model, pricing, and your selling strategy. To do that, it involves an open mindset. Are strategies that worked two years ago still viable? Probably not. This could be the reason you are not growing as fast as you could be.
Finally, to implement your strategic growth decisions, you need to have a plan for executing, including devoting the time, resources and money it will take to execute.
You can view Bernal’s presenation on Strategic Growth Decision Making here:
Bernal said she began noticing that companies were reverting to traditional business plan template models for their strategic planning but were finding that they were too cumbersome and not results-oriented enough. So she developed this process and has been iterating it for the New Normal we are now experiencing.
Here is some more of her past advice about strategic planning:
- To have repeated growth year after year, you need to have a planning process in place.
- You need to have an overarching objective for the company. It needs to be one statement that everyone in the company can see how their work leads to that objective. Then everyone feels they are contributing to that result.
- The company needs to have a growth goal for every business function within the company. Whether there is a department established or it is just one person, you still need that function – sales and marketing, operations, HR, finance, CEO strategy – to have a goal for the year.
- Now all these goals you have need to be broken down into specific bite-sized pieces that can be accomplished every quarter by one human being. It’s not the company will do X, it’s John Smith will be doing X – it needs to be that specific. Each of these steps will move the company forward to the strategy objective that you have for the company.
- Every quarter, recognize and celebrate your successes. This helps to keep the focus on strategic growth.
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