This is my third column in this series which addresses how to begin the process of thinking strategically about your business in the difficult economic times of 2009 and beyond. As I’ve said before, this advice applies to any type of business of any size. Now is the time to plan for the future and building a solid foundation for the plan is critical.
To reiterate my main point about how successful companies plan in difficult times. One of the best approaches is to balance the following steps:
- Know what you stand for and what you do best
- Understand what is paying the bills now and for the next 1 – 2 years
- Have a clear vision of what you hope to be in 10 years
- Establish a “base camp” 1 – 3 years in the future that bites off a big chunk of achieving your 10 year vision
- Use elements of Scenario Planning to learn more about the future
- Boil everything down to an action plan for the next year
The Third Step
If you have been following along, we have taken two steps so far:
- Identifying your company’s Core Values, or What You Stand For, and
- Discovering what your company’s Core Purpose is, or What You Do Best
The next step in this process involves two key activities:
- Understanding What Drives your Economic Engine, and
- Having a clear Vision of what you aspire for your company to be in 10 years
Let’s discuss the first one, Understanding What Drives your Economic Engine. When was the last time you took a hard look a your customer list and the products and services you deliver to them with true Profitability in mind? Many companies are surprised when they do this type of customer analysis to find that who they thought their best customers were was not necessarily the case. The same is true by analyzing your most profitable products or services.
The first task is to make sure you truly understand who your best customers really are and which products and services are the most profitable. You can do this in a number of ways, but my preference is to conduct a Most Valuable Customer Analysis. You can read more about this approach from one of my previous AllBusiness.com columns posted on May 9, 2009 titled, “Finding the Most Valuable Customers”. Here’s a link to that article: http://www.allbusiness.com/company-activities-management/operations-customer/12317628-1.html
Th main point is to be crystal clear on what types of products, services and customers really drive your “Economic Engine”
The second activity involves developing a compelling Vision of the next 10 years. Many clients ask, “why should we think so far out in the future when things are changing so much today and we have so many immediate problems to address?”. They ask, won’t any plan we develop be totally different in 10 years?
My answer is that by placing a stake in the ground 10 years in the future, and having to really stretch your company and your people to achieve it, you will create momentum that will focus your company and make it more resilient to deal with inevitable changes and setbacks.
Here’s another AllBusiness column that will explain more about creating a compelling Vision: http://www.allbusiness.com/north-america/united-states-midwest-usa-michigan/11585483-1.html
We have now covered four of the key elements needed to think strategically in difficult times. To review, these are:
- Core Values
- Core Purpose
- What drives your Economic Engine
- 10 Year Envisioned Future
The next column in this series will address the final two components:
- Scenario Analysis, and
- Action Planning
Charlie Alter owns Bentbrook Advisors LLC based in Sylvania, Ohio. He specializes in Growth Strategy, Innovation and Coaching and can be reached at firstname.lastname@example.org visit http://bentbrookadvisors.com/ for more information on his business advisory practice.