It would be fair to say that running a business is challenging at the best of times. Layer onto that current world events and we find ourselves at a point where anyone trying to maintain a business or contemplating taking on a new venture really needs to have a structured way of thinking.
By a structured way of thinking I mean have key anchor points for your business to focus on rather than fight spot fires every day. By taking a structured approach to how you conduct your business you will find, with consistent application, your chances of surviving and then thriving are better than most.
A review of the Australian Securities and Investment Commission report on why businesses go into administration found about 50% do so because of poor strategic management. ‘Strategic management’ is not just something that big corporate entities need to focus on. Strategic management is important to any business, as Michael Porter from Harvard explains strategy helps define your competitive edge and choose what you don’t do rather than what you do. It provides structure to your business.
What does get lost in discussing strategic management, however, is how to break that down into consumable components for businesses, of any size, to use. To this end Gino Wickman, in his book Traction describes a way for this to occur. Businesses should focus on six components and by doing so all the firefighting and lack of control will be dealt with and the business will grow.
Vision – know where the business is, where it wants to be and how it will get there. This is understanding your why (by the way it needs to be more than just make money).
People - have the right people in the right seats according to organisational values and their ability to carry out their role. This is difficult to achieve if you are not clear on your why and what you value.
Data – run on measures not intuition or the next shiny thing. Simple, accessible numbers not complex equations. For example, how many customers came into the store or how many widgets you made today.
Issues – be able to identify them, discuss them openly as a team and importantly solve them so they don’t return. Don’t fester on issues just make a decision to solve them; ‘perfect is the enemy of good.’
Process – consistency is the key to clarity for employees and customers. Document your major processes. Doing this will mean you avoid the interpretation of individuals - it always leads to difficulty
Traction – put in place accountability and performance checks to constantly ensure progress towards the vision. Remember accountability does not equate to blame.
Focusing on these key components will help you get through these difficult times and will also set your foundations for the times ahead. Take the time to learn these components, use them and like a fitness regime, over time you will get better at structuring your business for success. Don’t be too proud to admit you don’t know everything there is to know in business, lean on others and always keep learning how you can be better than your competition.