Many businesses reach a stage when they are at a crossroads about the direction to take next or are “stuck” without a clear strategy. It may be a crisis point or it could be an opportunity to take a different path. Directors may no longer be aligned with the planned company direction, and this can cause friction.
Rather than putting off hard decisions, it makes sense to face up to the challenges and opportunities, have a strategy review and then put an implementation plan in place.
Reasons for a strategic crossroads could include:
- Change in market dynamics that impact growth or profit potential.
- Increased competition forcing new approaches.
- Loss of important customers or contracts.
- New product or service opportunities possibly requiring research and development.
- Recognition that the business is too reliant on a small number of key customers.
- Macroeconomic/political changes such as Brexit.
- Divergence of what Directors want from the business.
- Planning for exit / opportunities to acquire.
- Changes in key staff or skills that no longer reflect the needs of the business.
- Falling behind in taking advantage of the operational efficiencies of new technology.
- Lacking the funds to develop the business.
- Measurement and reporting that does not give the right management information.
If there is a need for change or at least a need to review your current strategy, how should you go about it? A few businesses make reviewing strategy almost a continuous process. Others wait until there is a “big bump” to traverse or an unforeseen opportunity.
Smart organisations often involve outside help in the strategic review and implementation planning process. This helps keep focus on what is needed and ensures that an independent non-biased view is taken to maximise the opportunities. Our group of advisors have helped many companies achieve strategic success.
The following four step process works for most companies:
1. Big Picture – Step back and look at the big picture. Don’t get stuck in the day to day operational challenges. Take high level views about the elements of your business and the markets that you service or would like to serve. This phase is the time to re-examine your mission, vision and values – are they still right for your business. Try to define the big picture direction the business could or should take. Depending on the size of the organisation, there may be delegation of some tasks. There may also be research to validate potential options.
2. Implementation Plan – Once the direction of travel has been determined or options identified that need to be refined further, then it is time to get into more detail.
The company objectives need to be set or reset in order to reflect the chosen strategic direction. Real data and knowledgeable input should be used to define appropriate options.
Objectives should have supporting targets and measures defined. The chosen targets should be realistic and ideally include some quick wins. Measures should support what you are trying to achieve and become the Key Performance Indicators (KPIs) that are used to track and reward progress. A small number of well chosen KPIs makes sense as too many KPIs dilutes focus. Often it is beneficial to involve key staff that will be responsible for implementation in this phase. This phase should also make sure that the right reporting information is or will be available and that it is clear how progress will be monitored and reviewed. It is critical to have a clear picture of who is responsible for what and the timelines are understood and agreed.
Review and select long term initiatives that will support the objectives. Initiatives will need staff buy in and may have resource and budgetary requirements. Any resources and funding should be agreed along with the selected initiatives. A small number of big impact initiatives is usually best. Often it works well to have champions for specific initiatives as they can make sure focus is not lost. Initiatives should have well defined progress reporting.
3. Communication – This step is critical particularly for more complex organisations. Every member of staff should understand the big picture and more specifically be clear what their contribution will be to the objectives and initiatives. It may be appropriate to have a launch event(s). If incentives are linked to achievements, then the collective/individual measures should be very clear.
Regular ongoing communications regarding progress and any corrective actions is also very important.
4. Review and Adjust – What happens after the launch of a new strategy is where it can go off the rails. The planned review process should be rigorously carried out and actions implemented on time. Any corrective actions should be clearly communicated. Few strategic plans remain static and it is good practice to monitor what is working and what is not. Too many changes can cause confusion and loss of effectiveness. On the other hand, stubbornly sticking to a path that is not working does not make sense.
It is also important to recognised when most of the gains have been realised. It might be time to start the complete process again.
Unfortunately, strategic reviews and the resulting implementation plans do not always deliver the anticipated outcomes. Reasons for failure can include:
- Unresolved internal differences of opinion or conflict.
- Not truly stepping back and looking beyond the day to day business as usual issues.
- Not setting aside quality time to focus on the process.
- Poor communication to staff and lack of buy in to business transformation.
- Initiatives that are not supported by appropriate funding.
- Initiative fatigue.
- Incentive schemes that are not aligned with the defined objectives.
We have the experience required to transform the performance of your business by helping you find successful paths to take while avoiding the pitfalls.
Contact Gordon Carmichael on 01276 818125 or gordon.carmichael@hcbusinessadvisors.co.uk to discuss how a strategic review can benefit your business.
Gordon Carmichael is an experienced business advisor and strategy consultant who works with business owners and directors that are serious about achieving more with their business. He has managed successful businesses from small to £250m in a number of different industries and brings independent thinking with no baggage or vested interests. He is financially literate and understands modern marketing, people dynamics, the benefits of technology, effective business planning and business operations.
