THE ability to set clear long-term strategy is one of the most important things a business owner can do, but also one of the most difficult. Overcoming your own strategic myopia is even more critical in today’s fast-changing world.
THE ability to set clear long-term strategy is one of the most important things a business owner can do, but also one of the most difficult. Overcoming your own strategic myopia is even more critical in today’s fast-changing world.
Strategic myopia is a condition whereby the management of a business can see clearly those things that are to take place in the short term, but have only a fuzzy view of what their future might be over the longer term. Many owners of small firms, and even the senior managers of many larger firms, suffer from strategic myopia.
To test for strategic myopia, ask the following questions.
• Do you have a clear vision for the future of your business over the next five to 10 years?
• Do you share this vision with your employees and other key stakeholders such as customers on a regular basis?
• Does your business have a formal, written vision, mission and values statement, and a formal, written business plan that is reviewed regularly?
• Do you systematically monitor your industry for trends and look for threats or opportunities?
• If you own your own business, do you have a well-considered succession plan for your own exit, and have you started preparing for the sale of the business, or the grooming of a successor?
• Does your business planning look beyond the next year?
• Do you regularly talk to customers and suppliers to gauge their views on how your business is performing, how the industry is trending and how you might innovate to add value?
You might have a ‘yes’ to some of these questions and a ‘no’ or ‘maybe’ to others. Whatever your answers, you must recognise that strategic myopia is always looming in even the best-run business. The managers of large, well-run firms spend a lot of time and money on strategic management issues. For the owner-manager of a small firm this is not always possible. Most small business owners work 35- to 50-hour weeks with 30 per cent working longer. With such long hours working in the business it is difficult to find the time to work on it in a strategic way, and strategic planning is often more difficult than the more routine operational planning.
My own research with colleague and co-author Sophie Reboud, from Burgundy School of Business in Dijon, France, has shown that a formal approach to strategy setting is associated with above-average performance. We caution that the mere possession of a written business plan is no guarantee for success in and of itself. However, formality in planning and strategy was found to be associated with owners who had formal business qualifications, a strong sense of how to delight their customers, and a clear understanding of what core skills their firm’s needed to achieve this. Our research also highlights a link between formality in strategic planning and such things as a strong growth orientation for these business owners, formal use of quality assurance, a capacity to network strategically and possession of a clear strategic vision for their firm.
In essence, the pattern that emerges is of a relationship between enhanced business performance, long-term vision and formality in the planning and strategy setting process.
To plan for the year ahead …
• Start thinking about where you want your business to be in five years’ time – what is your vision?
• Consider where you will be in this future vision – still in harness or retired?
• What political, economic, social or technological forces are going shape and change your industry over the next few years?
• What are the critical resources that you must possess if your firm is to succeed in this environment?
• What are the gaps in your resources that you must close if you are to fulfil your vision?
• What assistance can you get from leading customers, key suppliers and third-party advisers to help you shape this strategy?
