Good Questions Equal Great Business Strategy

Reviewing your existing business strategy, or creating a business strategy for a new business venture, should not be seen as a complex and difficult task by any business owner or business manager. In fact, the process itself can be invigorating and exciting, and if done well, will certainly make your business and personal life somewhat easier, over the next twelve months.

Unfortunately, most readily accessible literature on this subject is focused on the development of business strategies by large corporate entities or similar sized public enterprises, and what little guidance is around for the SME business owner is still overly theoretical, and in my view far more complex than it needs to be, or the simplicity of suggested methodologies is far from adequate in being able to make a real difference to business outcomes.

In reality, the process of reviewing an existing business strategy, or creating one for a new business, can be distilled into an easy three part process. Firstly, asking and answering the right questions in respect of your business, secondly, collating all of the answers and grouping them into a small number of specific strategies, and thirdly, identifying all of the tasks which need to be performed to successfully implement each strategy.

So what are the right questions that you firstly need to answer? I suggest that the following nine questions should always be asked, and answered in a comprehensive manner, as the first part of the process of developing a new business strategy.

1) What business arena are we really operating in, and is this the business arena we want to operate in?
2) What market(s) do we want to serve with this business and which particular customers/clients?
3) What outcomes do we want to achieve in the next 3, 6, 9, &12 months, and by year 2, year 3 etc?
4) What resources will we need to progressively apply in the business to achieve these specific outcomes?
5) What actions need to be taken and by whom to gather these resources so they are available as needed?
6) What management and support structures will we need to initially have, and progressively upgrade?
7) What tools will we need to put in place to measure and report progress?
8)  What external reporting requirements will we need to comply with, and how important are each of these?
9) What don’t we know, that we need to know, to manage known and unknown future risks?

Robust analysis of the answers that flow forth from the above process, and the grouping of these into relevant subject headings, will allow the second phase of the development of your business strategy to be finalised.

Ideally, the information so gathered, will allow you to quickly prepare a range of specific tasks for each of the following strategic areas;

1) Customer/Client Acquisition and Retention Strategies
2) People Acquisition and People Management Strategies
3) Resource Acquisition and Resource Management Strategies
4) Organisation Capability and Organisation Structure Strategies
5) Financial and Capital Management Strategies
6) Legal and Regulatory Compliance Strategies
7) Public Relations and Stakeholder Communication Strategies.

Once the full range of tasks has been identified for each of the strategic areas it is an easy matter to complete the third of the processes involved. That is the placing of timelines, costs or budgets, and responsibility for completion of each task to an individual or a team, against each specific task.

When this is completed your new business strategy is ready to be pulled together, documented, disseminated and put into action.

Do you have a strategic plan for your business?

If so, is it time you reviewed it and looked at it from a new angle?

If not, will this article provide you with the impetus to create one and run your business within its structured boundaries?

Will your Business Survive and Prosper?

As a business owner, you have chosen to invest both your capital and your valuable time into an enterprise that operates in an environment which is highly competitive, very personally demanding, and constantly changing.

Quite rightly, one of your highest priorities should be to protect your investment and nurture it for long enough to build, from the proceeds of your ongoing business endeavours, a strong asset base to support your future plans.

In order to protect your investment, you need to develop a fundamental understanding as to why SME businesses often fail to meet their owner's initial expectations, and why many businesses actually fail.

The list of reasons for failure is long, but the more significant factors include;

• lack of a cohesive strategy for continuous improvement and innovation
• lack of systems for business accounting and control of business expenses
• lack of understanding of working capital needs and cash flow management
• lack of general business acumen and core business management skills
• lack of understanding of the market demand for the product or service offered
• lack of understanding of the value of family and other support mechanisms
• lack of well developed negotiation, influencing and sales skills
• lack of understanding of the importance of choice of location to the business
• lack of ability to handle the challenges of growing the business
• lack of focus, energy and persistence in the face of all types of challenges and
• lack of acceptance of personal responsibility for the success of the business.

Looking at this somewhat truncated list, it is easy to see that running and operating a successful business requires a lot of skill and effort, and it is not for the faint of heart.

Another key stepping stone on the road to protecting your investment of capital and time into your business is to learn to work on your business, as much, if not more than working in the business.

To this end, the ability to focus your mind and your best energy, on the areas where they will have the greatest effect, is extremely important.

Many business owners try to do everything themselves and are reluctant to rely on others, be they employees, contractors, outsourced service providers, or other business professionals such as accountants, lawyers, and business consultants, to perform roles for which these people are far better qualified.

Do you have a clear picture of where your strengths lie? If not, perhaps it is time for the good of your business, to explore who you are, and in doing so, develop a clear understanding of your major strengths and identify the areas in which you face strong challenges.

People often say that business is not rocket science, however what they generally neglect to say, is that all businesses require someone powered by rocket fuel, in order to get lift off, move into orbit, and stay afloat for long enough to enjoy the ride and the view, from on high.

As a business owner, that person needs to be you. Are you up to the challenge?

Four Critical Business Roles

It never ceases to amaze me that people continue to establish new businesses or struggle on in established businesses, without a clear understanding that there are four critical business roles which must be performed at an optimum level in any business if it is to grow and be successful in the longer term.

Too many business people are not aware that there are very distinct roles which must be performed daily and consistently in any business, and that each of these distinct roles requires people with differing personalities operating in each respective role to ensure that optimal outcomes are achieved for the business.

It is also not well recognised that very few people are actually suited to effectively, and more importantly consistently over time, perform all of the required roles. Many will do their best when assigned one of the four critical roles but inevitably they will eventually drift away from the elements of any role that they personally get limited or no satisfaction from, and focus attention elsewhere to the detriment of the overall business.

Often the limitations of one or two people trying to perform all of the critical roles do not become apparent until the business starts to expand as a result of unplanned for organic growth or external pressures being brought to bear on the business.

In my experience the four critical and quite distinct roles (role groupings) required to be effectively performed in any business aspiring to be successful and sustainable are;

• leadership, strategy development, and new customer/client acquisition,
• budget management, cash flow management, competitor/market research management, business plan management, and demand management,
• customer relationship management/customer retention management/up selling and cross selling to existing customers, and
• administration, sales support and operations management.

In my view each of these critical roles (role groupings) are best suited to people from different personality types, and care taken in matching a particular person with the critical role (role group) which best suits their particular personality, will pay high dividends to the businesses who take this approach.

My own experience indicates that a high level of passion for performing any particular role comes from that role being closely aligned to the type of work activities a person prefers to regularly perform, those preferences generally being aligned to their individual personality type.

Initially, when first establishing a business, it may not be possible to create and fill four separate roles however, if any business is to grow and have long term success, each of these roles will need to be performed by individuals, or groups of individuals, with the specific aptitude and real passion for performing the distinctly different types of daily activities which need to be performed effectively, and consistently for a business to prosper.

If your business has reached the stage of its business cycle where you are ready to grow your business, have a very close look to see if you have all the bases covered in ensuring that each of these critical roles, or role groupings, are effectively covered and the full-time attention of at least one passionate individual, is being applied in each area.

Should you not be satisfied that this is the case, I would suggest that you put any growth plans on hold until you are satisfied, as this will avoid the inevitable problems that will potentially implode your plans, and set your business back for as long as it takes to right the situation.

It may be that your business has stagnated and appears to be going nowhere at present, and if that is the case, have a good look at these critical roles to see if you have them all covered. If not action to rectify this situation may be the change you need to make to get your business firing again.

If you have all bases covered, look closely at the people performing the roles to determine if they are passionate about the type of work involved in the relevant role, and if not place them elsewhere in your business where their passion may be re-ignited, and find the right person for the relevant role.

For those operating smaller businesses with less people than the number of critical roles which need to be covered, I would suggest that each roles is as important as any other and time needs to be applied each day to the performance of all these four critical roles.

In this less than ideal situation it is critical that each of those involved has some affinity with the nature of the work involved in whichever role(s) they are required to perform, and some form of ongoing accountability is introduced to ensure equal treatment of all roles assigned is occurring.

Understanding of these four critical roles and the linkages between them is a vital skill for all business owners to develop. A lack of understanding of same is usually clearly evident to a consultant called in to address issues standing in the way of any business growing to achieve its full potential.