Strategy Future-Proofs Your Small to Medium-Sized Business
Part 1 in WhiteWater’s Small to Medium-Size Business Success Series.
Small businesses have faced enormous challenges over the past couple of years. From retailers struggling to transition from in-person to online sales, to independent restaurants whose business dwindled to nothing at times, to manufacturing and industrial companies grappling with procurement strains and other shifts, the pain points have really piled up.
In October, a report released by RBC Economics noted that small and medium-sized businesses (SMBs) are contending with added debt loads, supply-chain disruptions, and labor shortages, “not to mention the specter of further COVID waves.”
As we’ve seen, adaptable and agile organizations are the ones that survive. With a clear, flexible strategy, they can thrive. If you were caught off-guard by the tumult of the past two years, that’s OK. It’s not too late to get ready for what comes next. It’s the perfect time to strategize.
Strategy is always important in every business. But for SMBs, it has never been more essential. This isn’t just about playing catch up to our new reality–it’s about preparing for a future in which change will be continual, and the rate of change will only continue to accelerate. You want to be the Wayne Gretzky of your industry: skating to where the puck is headed, not where it’s at. And you definitely don’t want to be behind the puck, chasing it.
A solid strategy puts you out in front.
Work on, not just in, your business.
The first step towards creating your strategy is one backward, away from the busyness of day-to-day operations.
I know you’re up to your eyeballs, keeping things moving. But you need to make time to think strategically, and you can’t do it amid the distractions and interruptions of your workplace or office.
To develop your new strategy, you need to spend some time finding answers to a number of questions, such as:
How should we position ourselves in the market?
How do we adapt now that the fundamental processes by which our business creates value have changed almost overnight?
What new opportunities have emerged?
What unique things do we do that create value for our customers that our competitors don't do or don't do as well as us?
Why would potential customers choose us?
How do we support a rapidly changing customer experience/journey?
How can we align organizational energy toward the most critical business drivers?
What should we stop doing because it no longer fits or doesn’t optimize the value we provide?
As a recent Wired piece on small business trends noted, “For entrepreneurs, the greatest challenge isn’t getting off the ground—it’s remaining in flight.”
Strategy is the wind beneath your wings. As that Wired article states, owners must innovate to stand out, connect with customers, and expand.
What did you do yesterday–or even today–that won’t work tomorrow?
Here at WhiteWater, we often suggest clients start their strategy work by creating a strategy canvas. Chan Kim and Renée Mauborgne developed this deceptively simple tool as an alternative to the typical strategic planning process. It’s a great way to map out your competition, your customers, and your company’s strategic profile or value curve. Click here to read how to use it to capture your organization’s strategic landscape and prospects in a simple visual.
Talk to your customers.
This is the drum I will beat until the end of time: Talk. To. Your. Customers.
The best market intelligence comes from talking to your customers. We’ve established you need a clear, focused, and flexible strategy to move forward. These conversations will fill in all the blanks. They will be your map and compass as you navigate the white water around the next bend.
Talking to your customers was always important. Now it’s essential. The world has changed, and so have they, from the products and services they need to how they want you to deliver services.
Don’t assume you know. Time and time again, we’ve worked with organizations that thought they understood why their customers chose them. And they are almost always wrong.
Don’t diss digital.
Your new strategy is about looking forward. Digital tools and emerging technology need to be on your radar, whether you’re a bricks-and-mortar retailer who needs to start selling online, a mom-and-pop manufacturer that hasn’t upgraded its equipment since the Clinton era, or a professional services firm still running a pen-and-paper back office.
Too many SMBs dismiss digitalization, thinking it's for tech companies only. Wrong–it’s for everyone. Digital tools include data analytics software to drive efficiency, online sales platforms to expand your customer base, advanced manufacturing tools to increase production, AI-powered software for mundane or repetitive functions, and more.
“With the external push of the Covid-19 crisis, now is the ideal time for SMBs to regroup and identify the areas where digital technology could further boost their business,” Tera Allas, Michael Birshan, Anthony Impey, Charlie Mayfield, Jan Mischke, and Jonathan Woetze write in Lessons on Resilience for Small and Midsize Businesses in the Harvard Business Review. “Basic as it sounds, it’s likely to set them apart from the competition.”
More leading, less doing.
A lot of my work with middle managers and senior executives is getting them to focus their time and energy on leading rather than the day-to-day work of their business. (Remember how I said you need to work on, not in the business more? Same idea).
It’s never been more critical for leaders to keep their heads up, their eyes trained on the horizon. By definition, if you’re focused on the day's problems, you aren’t looking ahead. Leaders need to level up and have a broader perspective.
If you're in a small to medium-sized business, powerful forces will try to drag you back into the more hands-on stuff. Resist it. You’ve got more important work at hand.
It’s not enough to develop a strategy: you need to lead it, to live it. You will have to make big, sometimes tough, decisions about your team, resource allocation, and what you’re not going to do any longer. (For a primer on the key ingredients of successful strategy execution, click here to read my blog post on the subject). You need to stay focused on that.
But first, you need to step back and take the time to develop a strategy that will guide your company into an uncertain future. With that focus and direction, you’ll be ahead of the competition when the next big change comes.