Sunday, June 7, 2009

SMEs - tips for the strategy process

SMEs are generally terrible at planning. I use an example with my students. Would you leave work, go home, pack whatever clothes are in the cupboard, take whatever cash is in your pocket, get in your car, drive until you run out of petrol, and then have a holiday wherever you run out of petrol. The answer is always no. And yet most SME owners run their businesses in this way.

They simply arrive each day in the hope of sales arriving. There is no plan. No strategy. No direction. There is simply ever-fading hope.

You need to read as widely as possible in order to ensure your strategy is informed by your environment. A PESTEL analysis is not a once-off annual event, but rather a way of life. It is about knowing and understanding what is happening at all times. How often do you hear businesses who are in trouble state "I just did not see it coming. Suddenly ....". Remember nothing is "suddenly". It is always announced in advance. Even the current global financial crisis was being talked about in advance.

So read a book or two on strategy. Gary Hamel is a strategy author who can give you some good tips and insights.

Read, read, read!

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