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Why Do Small Companies Avoid Strategy?
Why Do Small Companies Avoid Strategy? -
2. Fear of the present. Many SMBs are understaffed and overtaxed. Leadership is simply too busy putting out fires and managing day-to-day activities to focus on long-term thinking. Deep down, they fear that if they divert time to planning, the business will fall apart in the meantime. 3. Fear of the Ivory Tower. SMBs have a practical outlook. Most of the employees are close to the customer, close to the action. This is healthy, but it can make leaders distrustful of theories, systems, generalizations and formulas. Leaders may feel that decisions cannot be trusted unless they are tied directly to personal customer contact. This type of leadership is locked in permanent reactive mode. 4. Fear of the facilitation. Effective strategic planning meetings require great skill to facilitate. Leaders may fear that their meetings, no matter how well intended, will end up as bitch sessions or hours of aimless wandering. 5. Fear of commitment. The problem with strategic planning is that it leads to decisive action. And yes, that can be a problem if leadership likes to hedge its bets, keep lots of balls in the air and keep all options open. It has been my experience that only a handful of companies belong to the “Ready, Aim, Fire!” school. Many more belong to the “Ready, Fire, Aim!” school. But for the vast majority, the mantra is “Ready, Aim, Aim, Aim, Aim…” 6. Fear of the future. Part of why SMBs fear commitment is because the cost of failure is high. Managers of Fortune 500 companies play with house money. For entrepreneurs, one’s livelihood is at stake. A winning strategic plan might help the family build a dream house, but a losing plan might result in no house at all. All of these fears are legitimate to one extent or another. But it’s important to keep in mind that just about every successful company has a strategic mindset. Next time–how companies can overcome the difficulties and become strategic.
[Work Connexions Blog]
Companies without a strategic plan have one foot in the grave, whether they know it or not. Yet, very few small and mid-size companies (SMBs) emphasize strategic planning. Why are so many of these companies strategically challenged, strategically averse? 1. Fear of the past. Company leaders may have had nightmarish experiences with strategic planning. Maybe they remember consultants that were brought in and nearly ruined the firm. Maybe they spent weeks in meetings without accomplishing a single thing. Maybe they launched grandiose programs only to have them fizzle out within months. Understandably, they don’t want to repeat a disaster.1. Fear of the past. Company leaders may have had nightmarish experiences with strategic planning. Maybe they remember consultants that were brought in and nearly ruined the firm. Maybe they spent weeks in meetings without accomplishing a single thing. Maybe they launched grandiose programs only to have them fizzle out within months. Understandably, they don’t want to repeat a disaster.
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can agree with 2nd point . Being myself owner of small business entity . I know these fears .
Hello!
I prefer to approach this topic as why businesses should engage in strategic planning...
Do you know of an organization that performs extremely well during a crisis? Maybe your own?
Organizations do well during times of crisis because executives, managers, and individual contributors all gain clarity of purpose, action, and expectation. Clarity, along with a sense of urgency, breaks down organizational barriers allowing people to work together efficiently towards the singular goal. These factors enable the organization to resolve the crisis quickly and return to normal operations.
On a day-to-day basis, especially during a period of continuous success, organizations tend to lose clarity of purpose and the sense of urgency. Over time, bureaucracy builds as a diminished focus on the organization’s mission prevents well intentioned executives and managers from relentlessly eliminating resource waste. Bloated processes make cross-organizational execution more difficult; driving employees to focus on their personal performance and success instead of that of the organization. Silos form and performance declines. Therefore, it is critically important for leaders to clearly define the organization’s goals and actions and to instill the sense of urgency that motivates employees to work effectively and efficiently together in pursuit of mission objectives.
Strategic planning provides the foundation for creating clarity of purpose and action on a day-to-day basis. A well defined, measureable mission supported by specific organizational objectives and reinforced by vertically cascaded, horizontally shared performance measures and effective executive and managerial oversight creates and maintains the clarity of purpose needed for continuous success. Without the unifying vision provided by strategic planning, an organization may lose sight of its goals, stray from the road to success, stumble, and ultimately fall; failing to keep pace with competitors in today’s extremely aggressive marketplace.
Final Thought…
Some organizations become victims to cyclic performance. When this occurs, the downward slide is typically viewed as a crisis for which the organization rallies to improve performance. Having realized a performance upswing, the organization becomes complacent, losing its focus and once again falling behind the competition. This cycle is often the product of ineffective strategic planning and will likely continue until a strong, unified vision is created and embraced by all members of the organization.
It is the hope of all StrategyDriven contributors that the concepts and materials provided on our website (www.StrategyDriven.com) will help you to develop and communicate the unified vision needed to make your organization truly StrategyDriven.
All the Best,
Nathan Ives
Principal Contributor and
co-Host, StrategyDriven Podcast
StrategyDriven
www.StrategyDriven.com