Ever hear people discussing strategic planning, change management or risk analysis, and wonder what on earth they are talking about? Maybe you recognise the terms from your time in the corporate world and are glad you don’t have to think about them in your small business.
I’ve never been a big fan of corporate jargon, but I am a big fan of the concepts that sit behind these terms.
Sadly, I often meet business owners who think corporate thinking can’t be applied to SMEs or doesn’t need to be. I believe that not only can it be applied to small businesses, but it can also provide many benefits.
In this article, I’m going to go through some corporate buzzwords and explain how to utilise the thinking behind them in your SME.
Strategic Planning
In the simplest terms, strategic planning is setting a goal and then working out what steps you need to take to reach that goal. Some companies create a company vision based on their business strategy as a reminder to employees of what the business is aiming for.
Your people strategy, marketing strategy, sales strategy, operational strategy and financial strategy should all support each other and your overall business strategy. There’s no point spending hundreds of pounds and numerous hours on marketing campaigns for a service you intend to discontinue. You don’t want to tie yourself into a five-year lease on a ten-person office if your strategy requires you to grow your team to forty.
A strategy helps you make better decisions. For example, you might have an idea for a new product or service. Before you throw a load of resources at it, you need to ask yourself if it will help you get closer to your goal. Taking your resources from one area of your business to allocate to a new area could actually lead you further off track from your objective. If you don’t have a strategy, you could make decisions that lead you in the wrong direction.
Strategic planning will also help you get more from your team. If everyone knows what they are working towards and how their role contributes to that success, they are more likely to feel motivated by their work. They’ll also be doing more of the right things and pulling in the same direction, supporting each other rather than working to different agendas.
Take some time to think about how you want your business to look five years from now. Maybe you want to be the market leader in one area of your business. Perhaps you want to triple your turnover. Maybe you want to expand your services or diversify your product range. What do you need to do in the next twelve months to move you closer to that point? How can you utilise the resources you already have and what new resources will you need to invest in?
Change Management
Many small businesses rush into change without any thought of how to manage that change. The change could be offering a new service or product, developing a new management system or restructuring the roles within your organisation.
Whenever you introduce a change to your business, it has an impact on either the processes, the systems or the people. Change management is simply the process of managing the transition effectively.
Communication is vital to change management. Just coming up with an idea or investing in a new system and springing it on employees can have seriously damaging consequences.
Discuss the proposed change with the relevant people before making any decisions. Why is there a need for change in the first place? What is the desired outcome? You may find that there are options you haven’t considered or that the change will have undesirable outcomes.
As an example, let’s say you want to implement a new CRM system. What’s wrong with the old one? What is it that you want your new system to do that the current one doesn’t do? More importantly, what ideas do the people using the CRM system have to ensure that the new one solves the current issues?
The next stage is planning the change. How will it be rolled out? Will it be implemented in stages or all at once? Will training be required for employees? Is there likely to be opposition to the change?
In the example of the CRM system, you will need to test the new system is fit for purpose, integrate it into your business and ensure all employees feel confident using it correctly. This isn’t something that you can just do in a day; it requires planning.
Once the change has been implemented, it needs to be reinforced. You need to remind employees of the reason for the change and show how it has improved the business. In the example of the CRM system, you need to ensure everyone is using it correctly and getting the benefits from it. Otherwise, you’ve just invested in a great system that nobody uses.
When it comes to change management, it can be extremely beneficial to bring in a consultant. They will help you use a structured approach to move your business from its current state to the desired state.
Risk analysis
The word ‘risk’ often has negative connotations, but every business operates with some level of risk. Starting a business in the first place is a risk; you might not get any sales, you might lose money, you might make the wrong decisions.
Risk itself isn’t a bad thing. Our attitude to risk and our management of risk is what makes the difference.
The purpose of risk analysis is to identify risks and calculate their probability and the level of impact they would have on the business. These may be operational risks, financial risks, technical risks, reputational risks, human risks, safety risks. Whatever the risks, it’s better to be proactive in managing them, rather than pretending they don’t exist and hoping they won’t happen.
Risk analysis is useful in project planning, preparing for events or implementing change. Tools such as SWOT analysis, risk and opportunity registers or a risk matrix can help with risk analysis.
Identifying risk and opportunity early allows you to capitalise on opportunities and mitigate risk more effectively.
ISO Certification & Integrated Management Systems
International Standards Organisation (ISO) management standards are a series of frameworks that help you run your business effectively. ISO certification is proof that you comply with an ISO management standard. The most common standards businesses go for are ISO 9001 (quality), ISO 14001 (environmental), ISO 45001 (health and safety and ISO 27001 (information security).
ISO certification can provide many benefits to business, not least helping them secure lucrative contracts. However, not every business needs or wants to gain ISO certification. It can be a lot of work and a big expense, so unless you have a specific reason you want to become certified, it’s not something you need to worry about.
However, the framework and basic principles that sit behind ISO provide many benefits to any size business. The individual management systems for each standard allow businesses to run more effectively and efficiently as well as making it easier to identify areas of non-compliance. Integrated management systems organise all your policies, procedures and documentation in one place.
The benefits of these systems and frameworks are enhanced business performance, clearer processes for employees to work to, and faster resolution of issues.
It’s never too early for a business to get robust management systems in place. The stronger the foundations, the more successful you will be in growing your business. Understanding the principles of the ISO framework puts you in a stronger position for the future.
Get help applying corporate thinking to your SME
Being a small business doesn’t mean you can’t think big. I specialise in helping my clients grow their business or prepare themselves for future growth by putting solid foundations and consistent organisational systems in place.
Whether you want help creating a business strategy or would like to obtain full ISO certification, I’d love to hear from you. Contact me if you have any questions about the ideas covered above or would like to book a free one-hour consultation.
