SMEs: Are you one of those that outperform by thinking strategically?
A survey conducted in 2015 by Kent Business School amongst small and medium size enterprises (SMEs) found that around half of those surveyed did not have a business strategy or plan!
At first glance this statistic may not sound too bad. After all, if correct it means that 50% of SME organisations are thinking strategically and planning for their long-term future. Which is great news given that those businesses that are strategic in their approach to doing business outperform those that are not!
But hang on! Aren't we constantly been told that SMEs are hopeless at 'working on' their business, instead spending all their time entrenched in day to day activities? The findings from this survey would therefore seem to fly in the face of this notion. So which is correct?
Well, actually I'm only giving you half the story! The Kent Business School survey, revealed in an excellent article written by Dr Simon Raby entitled 'What is Good Business Strategy? The case of SMEs', enquired a little further of those businesses that claimed to have a business strategy. It asked the owners or senior management to see evidence of it. And what it found is perhaps more akin to the findings of research conducted elsewhere on this subject.
Of those SMEs in the survey claiming to have a business strategy or plan, only one in ten could actually produce any evidence to substantiate their claim! So, when taking into account that half of SMEs admitted to having no strategy at all, and then factoring in that only one in ten of those that did claim to have one could actually produce any evidence of it, it means that just 1 in 20 of all SMEs are likely to have a well defined and articulated business strategy.
Although this survey dates back to 2015, I doubt if a similar exercise conducted today would yield a very different outcome. So what should be deduced from it?
Firstly, I do not believe the reason why the vast majority of SMEs choose not to conduct a strategic approach to business is because they are ignorant of the benefits it brings. The fact that nearly half of those surveyed by Kent Business School claimed to have a formal strategy when in fact they had none could be an indicator of this. They didn't want to admit to having no strategy for fear it would make them look bad. My own experience of talking to SMEs backs this up. I find that the majority acknowledge the importance of strategy, even though most don't have it.
Secondly, if we accept the notion that many SMEs acknowledge the benefits of strategic thinking, it begs the question 'why they don't do it? I believe it boils down to 2 key reasons:
They feel they don't have available time. The stresses, strains and pressures of day-to-day activities consumes all available time, leaving nothing left over for considering long-term development; and
They feel they don't know how to go about it, even if time could be found.
These are perfectly understandable reasons, but the good news is that they can be resolved. With guidance and support it is possible to teach owners, directors and managers of SMEs how to start thinking strategically, and thereby not only improve performance of their business, but also improve their own personal wellbeing through bringing a clarity of thought that improves decision making, increases efficiency, reduces stress, and enhances the feeling of being in control of one's destiny.
Here at Blue Box Strategy we specialise in doing just this, by using a structured approach that teaches you how to find the time and utilise key skills, tools and techniques to analyse your business and make sound decisions about your future. So please get in touch for a one-to-one discussion to explore how it might be possible to start the journey to shaping your business's future. There'll be no cost for an initial discussion, and absolutely no obligation on you to take things any further if you feel it's not for you. But hopefully you'll get something out of it. So what's to lose.