" Strategic planning is inappropriate for small companies because:
- No time: They don’t have the management time or resources to invest in days of planning.
- Big cost: Because their top teams usually lead their sales efforts, taking them off the road has an immediate negative impact on revenues.
- Small payoff: The payoff of strategic planning is often measured in millions of dollars rather than hundreds of millions, so it makes no financial sense to overinvest in the effort.
- Short-lived: Smaller businesses must continually adjust their strategy so the strategies they develop during a strategic planning session are usually short-lived. They win because they are more nimble, quicker to seize unexpected opportunities, than their larger competitors. Long-term planning can slow them down and kill this advantage."
The international experience of GrowthPath in high-change business environments around the world proves that it's more important to respond to opportunities better than competition ... not to get too distracted with big-company ideas like strategic planning. Few businesses have the influence over their market that long-term planning assumes.
When talking about opportunity response, what does respond "better" mean? A big part of it is 'respond faster', but you also need to have the information to price your response and to evaluate the attractiveness of the opportunity.
The preparation for opportunity-based growth is:
- being ready to recognise and prioritise opportunities, through knowing your comparative advantage (where you really create value that customers pay for)
- having the cash-based cost insights to make money from the opportunity
- and having the flexibility to deliver the opportunity.