Are you tempted to skip a round of strategic planning to save cash and avoid disruption during this extended period of uncertainty? If so, maybe you need to demand more from your company’s strategic planning process.
The irony is that businesses need clear strategy MORE during periods of uncertainty not LESS. All it takes is a negative story on the evening news or a customer complaint to shake the confidence of employees, customers, or vendors. Folks around the company need to be reassured that the leaders are looking for opportunities, analyzing resources, updating the strategy, making adjustments, and are confident about the future of the company based on current information. How much momentum is your company losing when its employees doubt, wonder, worry, pause, hold back, or start polishing their resumes? How about when customers do the same? Or vendors?
If the folks all around your company are enthusiastic about your future, then convene to go straight into growth strategy mode. If there is still doubt or worry, build problem solving processes into the strategic planning.
Often the CFO is the member of the executive team who can see the tangible evidence of unresolved problems because it shows up so clearly in things like gross profit, capacity utilization, revenue/head, repeat business, average sale, and employee turnover/recruitment costs, but just hoarding cash and continuing to avoid problem solving won’t turn the situation around.
A company recently brought us in because they were very excited about a new product they had launched earlier in the year. Their best clients had been extremely loyal for a long time. They were convinced that it was time to dive right into growth planning, but when we conducted our interviews with those same loyal long term clients, we learned that the overwhelming majority were actually annoyed, didn’t like the new product, felt taken for granted, and were quietly shopping the competition. The leaders of the company had absolutely no idea! We offered to conduct more interviews and used controls groups to make sure we hadn’t been misled. The clients didn’t want to hurt the feelings of the leaders of the company. They had become friends over the years. The clients were choosing sustained friendship over continued purchases. WOW! It sure was helpful that we insisted on some market research. They had come close to refusing to let us do that step.
They are not alone! Perhaps your company is also making important decisions based on outdated information. If it’s a few years old, the data is pretty worthless in most industries. Financing, advances in technology, generational differences, and so many other things have dramatically changed customer buying patterns across industries. We’ve noticed that many of the Baby Boomer CEOs/Presidents of privately held midsized companies (particularly the family owned ones) are still basing their strategies on the way things were when their best customers were first acquired. Hoarding cash is not the answer.
Other companies have a chronic recurring problem that has little to do with the economy. It is often referred to as the “elephant in the room”–a revolving door in sales management, an outdated IT dept, too little repeat business or few referrals. If that is your situation, maybe you (as the CFO) wouldn’t feel so reluctant to do strategic planning if the process included focused problem solving this time. That way strategic planning could actually make the business some money in the short run as well as guide the generation of improved results over the longer run.
Your company could be experiencing tell tale behavioral symptoms that would sabotage the success of just about any strategic plan. If you have a blaming culture, indecision, silos, low accountability, and room for excuses, the strategic process should address those issues to have a positive impact.
Strategic planning can be done in a way that features parallel processes for updated information to guide important decisions, resolved chronic recurring problems, and/or replacement of self sabotaging behavior, and it’s MORE important to expect MORE from strategic planning now. This is not the time to avoid it. A real CEO seeks the input and involvement of the CFO during strategic planning, and so do real strategic consultants.
Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST®. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions. Her midsized BtoB clients get on…and then stay on…the published lists of the fastest growing privately held companies. She owns and operates a suite of companies that help privately held midsized companies achieving accelerated growth with sustained profitability® through opportunity & resource analysis, 4 approaches to strategic planning, executive advisory services, growth financing, and targeted search. 2012 is Ambler’s 8th year hosting a weekly peer-to-peer-to-peer syndicated on line talk show that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. An archive of over 300 interviews is available at www.GrowthStrategistShow.com. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.