Thought

Thought clouds

Let’s take a look at Business and the perfect scenario for strategic planning, business planning and change planning.

The ideal business has a crystal clear view of the measures that determine if it is meeting the needs of its shareholders or stakeholders. By a simple mix of lag and lead indicators as well as views from the external market environment around your organisation, you make excellent decisions, drive actions and deliver the company’s Vision and very importantly that you achieve your business plan in a predictable manner.

The analogy that I draw out over and over again to highlight planning principles , is the one of the ‘Corner Shop’. A small business with maybe a single Shareholder, who buys, prepares, sells and services a customer base in an intimate way. The Owner understands, the market, when to hire labour and very importantly, can anticipate change. As a small business they have control. They may not have clearly defined plans and strategies, but what they have are sensory controls of their business which are always within touching distance and they have the opportunity to react.

Maybe the ‘Corner Shop’ has 3 employees. So what happens when you get bigger?   What’s the difference in running and planning for a business if it grows from 3 employees to 30 employees, 30 to 300, 300 to 3000…etc ?

Volume does matter, but the principle of running a business does not. The small business knows instantly when a customer doesn’t like an offer, can see when training is required for an employee and if they forget to buy in stock, their shelves go bare. Larger companies may be able to trade for longer while making losses and having negative cashflow, but not responding to hot spots can bring about the same fate.

The reason why I use this example is that all companies need to plan clearly and act swiftly in ways that can mimic the intimacy of the Corner Shop Owner but on a larger scale and also taking additional internal weaknesses and external threats into account.

A further challenge to the larger businesses is that they may be running a successful business, but insufficient planning audit is placed on the component parts of the company’s make up until a financial ‘effect’ is felt, which usually comes through when Cashflow or Profit slows unexpectedly. The difficulty at this juncture is that everything looks a problem and it is harder to quickly determine the performers.

There are methods to help you to understand the Big Picture of your company and from this you can determine specific actions to get you back in control.

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