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!
Showing posts with label corporate strategy. Show all posts
Showing posts with label corporate strategy. Show all posts
Sunday, June 7, 2009
Sunday, May 17, 2009
SMEs - Step 7 in the business planning process
The first six(6) steps are in essence, the corporate strategy of the firm. Step seven (7) onwards is the business strategy. This is the nuts and bolts, how it must be done strategy, in order to achieve the broader corporate strategy.
The second part of the business strategy, Step 7, is the setting of objectives. These are the specific items we wish to achieve in the current financial year. Objectives are distinguished by the fact that they have an expected completion date, and a measurable outcome. Ideally when setting objectives, the cost of achieving the objective must be measured against the value it will generate for the business, and if it shows a negative outcome, then it must be removed as an objective. Beware expending resources on objectives that add very little value to the firm.
Objectives must preferably be large, audacious and should generate a noticeably positive effect on the firm.
The second part of the business strategy, Step 7, is the setting of objectives. These are the specific items we wish to achieve in the current financial year. Objectives are distinguished by the fact that they have an expected completion date, and a measurable outcome. Ideally when setting objectives, the cost of achieving the objective must be measured against the value it will generate for the business, and if it shows a negative outcome, then it must be removed as an objective. Beware expending resources on objectives that add very little value to the firm.
Objectives must preferably be large, audacious and should generate a noticeably positive effect on the firm.
Sunday, May 10, 2009
SMEs - Step 4 in the business planning process
Goal setting is normally focused on the 3 year (medium term) horison. (Remember that the timelines vary at times from author to author).
Goals are our medium term intentions, and they are required to provide us with more focus on what must be done in order to achieve our vision and mission in the longer term. These require a lot of thought as they provide the bridging between the business strategy and the corporate strategy.
Goals should not be too many in number, and should bridge the present and the future. They must be well thought out.
Goals are our medium term intentions, and they are required to provide us with more focus on what must be done in order to achieve our vision and mission in the longer term. These require a lot of thought as they provide the bridging between the business strategy and the corporate strategy.
Goals should not be too many in number, and should bridge the present and the future. They must be well thought out.
Subscribe to:
Posts (Atom)