5 Red Flags For Your Business Strategy
by Manfred Gollent
Is your business strategy up to par? When have you done the last “deep dive” into a strategic planning process? Do you have a clear picture in your mind as to where your company should be, say, five years from now? Is all of this properly documented to communicate with your stakeholders?
Well, there is a diversity of factors that may have rendered your business plans either partially or completely obsolete. These factors could be rooted in macroeconomic events, significant changes in technology, or societal trends, to name a few. Here are five potential red flags that should give you pause to evaluate if one of your most important leadership tools needs mending.
- Your corporate vision no longer inspires hope, passion, or enthusiasm
A Japanese proverb best visualizes that scenario: “Vision without action is a daydream. Action without vision is a nightmare.” Without a meaningful destination, how can you effectively lead? Your organization is essentially living the nightmare.
- Changes in the marketplace have invalidated your current strategy’s key assumptions
If the assumptions you based your strategy plan on are no longer current, you need a new plan. Without an intentional response to marketplace changes, your ability to grow and innovate will be restricted. Let me paint a simple picture: You may be the best typewriter repair shop in your market, but your opportunities to sustain or grow your business are extinct.
- The value proposition seized to resonate in the minds of prospective customers
Constant requests for price concessions are the norm today, but it’s still not a good sign having to listen to the five dreaded words: “Your Price is Too High.”
- Innovation and new opportunities have faded away
An effective strategic thinking process will stimulate and energize new ideas for meeting current and future customer needs. Consider the critical difference between innovation and creativity. Innovation involves applying a creative idea to a current business challenge. Without clarity of direction, innovation disappears.
- New threats have surfaced, and your organization is not ready to respond
Are competitors out there who could potentially put you out of business within the next year? Is there a more pertinent reason to take a new look at your strategic plan?
Entrepreneurs, business owners, and executives are taking many measures to thrive in any given economic environment. Why do they often fret over tough decisions to make sure that they are the right ones? What is it that gives them sleepless nights going over the numbers to figure out yet another way to reduce cost and progress in business? A documented strategy plan is the ticket…
There is one logical answer which may have been deliberately or instinctively on their mind: “The situation will change, and I want to be in a good position when that point in time comes.”
While we do not know for sure how fast and furious any changes in the economic environment may be, there will be changes. Will it always stay the same as it has been? Certainly not. It will be different, maybe better, maybe not, but different for sure! How well are you prepared?
- Do you ask yourself the important questions?
- Are you ready for the next move?
- Are you prepared to seize the opportunities the economic upturn will offer?
- Is your organization geared up to effectively and efficiently take care of the “new” business?
- Is the leadership primed to lead in an effective manner successfully?
- Is your team be equipped to cope with hiring and training people in a way that creates results fast?
- Are you and your organization prepared to do more with less, be more productive without raising the “burn rate” at the same time?
- Do you have a plan to double your output or throughput through increased efficiency of your processes as well as your human capital?
- What are you putting in place to cater to a new reality and make the most of it?
I know, questions, questions, questions… However, be sure you ask yourself these questions no matter if you are a business owner, entrepreneur, corporate executive, department manager, or team leader. Having answers to these questions and taking proactive action to become prepared now will make the difference in how you and your people will be able to define and manifest a new level of success in a changed situation. That is also where strategic planning enters the picture.
Is your strategy plan up to date?
Will it guide you to success? Have you clearly defined what success is for you? In a measurable way? Don’t get trapped by a profit number. That number is only a result of things that you did or did not do. It is a trailing indicator. A strategic plan is not the business plan devised by your accountant for your banker. Look for good leading indicators that help you to better predict your business and your progress.
- Do you have a clear and shared vision for your company, one that is inspiring, energizing, exciting, and gets you out of bed in the morning because of that?
- What would be the effect on you and your organization if you had a vision like that?
- Are your organization’s values identified and understood throughout your company?
- Can you and your people rely on them as the non-negotiable basis of your decision-making processes always?
- Do you have an actual assessment of your internal capabilities and capacities? What do you know about the changing market environment?
- New products, services, the competitive situation?
- Who thrives and who does not?
There are many more questions to be raised, reflected upon and answered to develop a strong strategic plan. Those of you that do will have a tenfold chance of succeeding and reaching your goals.
Look at your sales force. Are they the best they can be to assure every opportunity available is being taken advantage of? Are they operating with a purpose? Are you operating with a purpose? When was the last time your sales “toolbox” has been updated?
Make a serious assessment of yourself and your leadership cadre with respect to effective soft skills, goal setting, goal planning and leadership tools, combined with the right habits to maximize your individual output while maintaining reasonable life balance.
What picture do you see and what would you like to see? Your strategic plan will help to resolve that question and provide clarity.
Will it be sustainable when the business environment changes? What should be different? Consider the fact that the leadership of an organization represents the ultimate multiplier of the effectiveness and efficiency of the whole business — no matter how big or small that organization may be. One of my clients stated recently that her investment into personal leadership development has generated for her 1,000% tangible return on investment within the first 12 months as well as a host of intangible improvements which are more difficult to measure.
Strategic planning is teamwork!
How about the business, services, and production processes used in your organization? When was the last time you went through with a cycle time analysis? How do you objectively measure and assure that your processes are the best they can be? If you do not look at those details with the necessary professional approach, you may be wasting money and resources right now. A cycle time reduction process can save big money and create a significant competitive advantage.
There is a little book called “10.5 Reasons Why Leaders Fail” written by a good friend of mine, David Herdlinger, and the 10.5th reason is manifested by the fact that many leaders don’t ask for help. Do not fall into this trap; ask yourself relevant questions and venture out to get expert help. The best questions are most often especially those that may give you an uncomfortable feeling, taking you outside of your comfort zone.
Find ways to measure things; there are always possibilities to find a good approach to measure. Only then will you be able to identify how something is (or is not) working according to your plan.
Peter Drucker stated, “Only what is measured gets done.”
And he is certainly correct with this assessment, which has also been the case during my 30+ years as a corporate executive, and it tends to be true with my coaching clients, too.
Get ready for the next curve on your road to success and be prepared in the most professional way you can be. “Right now” is always the best time to do something about the preparation. You will have to make the time instead of waiting to “find the time.” Not having the time could have one main reason — you have not prepared the way you could have.
A well-thought-through strategic plan is the foundation for a successful, sustainable business!
Originally published in the Upstate Business Journal on March 14, 2018.