When is it Ever a Good Time to Examine Your Strategy?
When I ask business owners if now is the right time to examine their strategy, most often I get a range of reasons why the time is just not right. As you can imagine, with over 23 years as strategy management consultants, we’ve heard plenty of reasons: “We have too much going on right now, but check in with me in a year when things settle down.” “Our industry is changing too fast or too much and so it’s too hard to predict the future.” “We already know what we need to do and we are doing fine, so there is no need.”
Every company has a lot going on, and the pace of business is only getting faster. Will you have less going on next year to turn your attention to examine your strategy? Probably not. Will your industry, competition, customers continue to change making it difficult to make predictions? Yes, it most likely will. Are you working on the right things that will get you to where you want to go? We can’t answer that unless you know what results you are looking to achieve 3 or 5 years from now.
Let’s face the truth of the matter—in the hectic day-to-day running of a business, CEOs find it hard to break away to challenge their strategy. Here are five reasons why this just might be the right time to examine your growth strategy.
- Change in industry structure – Stay in tune with external environmental trends that can impact your industry. By focusing attention on strategy regularly, your leadership team will be more alert to changes occurring around you. As an example, the speed in which eCommerce is disrupting many business models is accelerating. Understanding and acting on existing and potential disruptors like eCommerce might just give you an advantage over your competitors.
- Loss of profitable sales – Businesses tend to go through cycles of rapid growth and flat to declining sales. The fact is that every company will need to periodically reinvent itself. When sales and profits are no longer responding to past techniques, dramatic changes might need to be considered. Regularly scheduled strategy sessions help identify creative solution to deal with revenue and margin erosion well before they become critical.
- Dated products or services – To be a leader in innovation, an organization needs to continuously challenge the status quo. Products and services have a lifecycle and often bold action is needed to transform your company to address new market realities. A strategy focused organization will energize employees to find new ways to improve and drive success.
- Employee skills have plateaued– Sometimes your own people may not be capable of taking your organization to the next level of growth. Not that they lack energy or enthusiasm, rather, it is usually a lack of breadth of experience. Strategy helps define the structure and skills required to take your business to the next level.
- Growth without purpose – Sometimes, growing companies chase every opportunity they can, adding complexity and diluting resources. In these cases, one of the most desirable outcomes of strategic planning is reducing complexity, eliminating clutter and waste, and focusing resources on those initiatives that will create the greatest value over the long term.
Is it ever going to be a perfect time to examine your strategy? Probably not…but without the discipline of strategy management, business owners run the risk of falling behind their competitors or customers. Have you been putting off examining your strategy?