In place of using these indicators is a need to develop foresight as to what the future holds in store for the firm. This involves identifying potential opportunities and threats before they appear and this process has a strongly entrepreneurial character.
The traditional ways of doing business are falling by the wayside. Prior year's indicators do not have the value they once had and organizations using them that were characterized by bureaucracy, control, rigidity, and functionalism have become outmoded. In fact, they are actually obstacles to change management. Perhaps the biggest obstacles are peoples’ attitudes toward change, which are often fixed and resistant.
Entrepreneurs have an edge here because the process of crafting strategy has a distinct entrepreneurial quality to it. Namely, it requires vision and creativity. It is a different process because there are no certainties. That world of uncertainty is the world of the entrepreneur. Entrepreneurs have come to thrive on continual change and they expect continual problems and challenges.
Entrepreneurial Concepts for Strategic Planning
So what are some key concepts for strategic planners to consider that will allow them to craft a strategic plan like an entrepreneur? Here are some ideas.
- Just two or three decades ago many companies were still debating whether they should globalize. This debate is over. The spread of the Internet is the reason. Any company that creates a website has instant global reach with corresponding demands for global delivery and service.
- Many firms have used outsourcing to reduce operating expenses. Unfortunately, efficiency by itself will no longer be enough to sustain competitive advantage.
- Reputation is the single most valuable asset of a business today. Just look at Toyota as an example.
- Robust practices in strategic risk management are needed to prevent character weakness within corporations from pulling down the firm. While the recent financial crisis provides ample example of this, the difficulty here is strategic risk management tools and techniques are harder to implement as business operations become more complex and operate in multiple locations across the globe.
- Failure can be a wonderful teacher. What lessons from prior failures can be applied to new ventures?
- Many organizations experience rapid growth at some stage of their life cycle. A consistent characteristic of this growth is that growing demand exceeds existing resources. The result is business leaders must be creative in acquiring and managing the resources needed to support the growth opportunities.
- Strategy formulation, while extremely challenging and difficult, is no longer the main challenge of an organization. That is now the execution of the strategy. Is the culture of the organization appropriate for the challenges ahead? Unlike entrepreneurs, managers are trained to plan, not execute.
Managers are different from entrepreneurs because while many are comfortable planning, they lag when it comes to actually putting the plan into action and in many ways the execution is even more important than planning.
Going forward, the key sustainable advantage will come from an organizational capacity to work closely with other highly specialized firms to get better faster. This process will be enabled by the emergence of global process networks that will help accelerate the learning across the broad networks of an organization.
Paul Larson - Paul W. Larson is the founder and President of the Myrddin Group LLC and he brings over thirty years experience as a successful operations ...
Join the Conversation