By Alan Taaffe
By Alan Taaffe
March 3, 2016 – Many contractors begin with a simple mission: find customers, serve them well and survive. What happens all too often, unfortunately, is the companies that managed to survive beyond their first year continue to operate with the same strategy.
Owners become immersed in the day-to-day operations of the business and find little time to step back and develop a plan for the future. Years later, those same organizations find themselves in exactly the same position they were in when they started: find customers, serve them well and survive.
This is not to say there is anything wrong with maintaining a business at the same level but, in a competitive world, this is not sustainable in the long term. At some point, competitors will begin to erode your customer base or, at the very least, your margins. It probably comes as no surprise that many small- to mid-sized businesses either do not have a strategy or think they have one, but simply don’t know what it is.
When searching for your strategy, it helps to answer some key questions about your business.
• What kind of a business are you trying to build?
• Do you understand your customer needs?
• How are you different from others providing a similar service?
What is your exit strategy?
It helps to understand the time horizon of the business owner(s) because this affects what needs to be done and when. The exit strategy may involve succession planning or preparing for an open market sale. Either way, what happens today impacts your plans for a successful exit.
Close your eyes and describe your company as it appears on your last day. What does it look like? Creating a vision is really about dreaming into the future. A vision describes what is possible while ignoring all of the barriers that might exist today. It is about visualizing the business at some future point from a positive perspective.
With the answers above you can begin to formulate a strategy for your business. It is important to understand the difference between what you want to do and how you are going to do it. Many firms will discuss their tactical activities but, unless they tie in with the strategy, those activities keep them moving in circles. I recommend looking at your business as an evolutionary process.
Define your strategy
Strategy can be defined as the bridge that spans between your vision and a plan. The organizational strategy will determine where the company plans to go based on a set of expectations. A strategy will point the organization toward the areas where it can win, but this requires an understanding of the market and your value proposition. If, for example, you are struggling in a market because you are trying to be everything to everybody, it is time to redefine your strategy.
Develop a plan
A good plan validates and supports a strategy; in other words, it should reflect the potential in the market. The execution plan should highlight the tactical activities that will enable success. These are typically centred on marketing, sales and operations. Marketing or market data should position the organization for its best chance at success and lead salespeople to the best opportunities.
Operations must then align resources to support sales initiatives to ensure commitments can be kept. Each part of the plan must be synchronized internally to avoid conflicts and inefficiencies. Communication is essential coordinating a tactical plan, and all employees should understand their part in that plan.
Execute the plan
What seems to separate great companies from the pack is the ability to execute a plan. First and foremost, this requires organizational alignment so that internal resources are pulling the boat in the same direction. There must be synchronization and accountability within the organization, which requires communication and leadership.
Beyond systems and processes, employees should understand the plan and have a sense of ownership for their role in the day-to-day execution of work. Companies that have higher employee engagement are more likely to succeed in the implementation of any plans, but this requires employees to feel connected to the organization’s vision. If we believe that human capital can make the difference in your organization then, from a people perspective, you should assess the following:
• Is there a sense of urgency among employees?
• Do staff take our customers (and their jobs) for granted?
• Are employees measured effectively?
• Are employees recognized for their actions?
• Are there development and succession plans in place?
Selective recruitment, training, support and communication are essential in the execution of any plan.
Continuous improvement requires that existing processes be reviewed on an ongoing basis. This ensures the organization is continuously examining ways to improve productivity and quality. The same theory should apply to the organizational strategy, which should be reviewed regularly to determine whether market conditions/changes require a strategic shift.
Building a plan around strategy, planning, execution and review does not need to be a painful process. But if you started your business with the simple strategy of finding customers, serving them well and surviving, it may be time to develop a plan to ensure your business matches your vision of the future.
— Alan Taaffe is president of Stradvan Group, a network of management consultants offering consultancy, coaching, facilitation and training services. His career includes a variety of management roles in marketing, sales and operations, and winning several corporate awards while with Schneider Electric, including Marketing Excellence, People Who Make a Difference and Global Gold Trophy. Prior to leaving Schneider Electric, he was responsible for the inception, growth and leadership of the Buildings Business Unit in Canada. Alan is a Certified Master Trainer, a business studies graduate of Ryerson University and has an MBA from Ivey Business School at the University of Western Ontario. Alan is also a member of the Strategic Management Society, Canadian Business Strategy Association and the Association of Professional Canadian Consultants.