Most people think about strategic planning as a way to plot growth. It certainly can be that: When you know your business well, your market, and your competitors, you are in a good position to make the growth choices that move you most effectively toward your aspirations.
But rigorous strategic planning is also a critically important tool in helping you to survive in tough times. When resources are scarce, choices matter more than ever. When you know your business well, understand what is going on in your markets, and are aware of what your competitors are doing, you can make the choices that will allow you to use the resources you do have to meet needs that continue to exist as other also make tough choices.
In taking this position, we are not advocating cock-eyed optimism. Instead, we are suggesting that rigorous strategic planning can help you take a good hard look at your business and begin to think about it differently. For example, think about what machinery you have among your assets instead of what the machinery usually does; think about what your various personnel know, not what they usually do. If you think about your current resources as inputs with flexible uses, you may be able to redeploy them to create new outputs.
For example, consider the nightmare that is the current mortgage market. If you are a mortgage broker, the credit freeze may have idled your usual business. On the other hand, the various federal rescue plans call for a lot of work relating to re-underwriting and re-negotiating a lot of mortgages. Although there may be little opportunity for “brokering” as part of this activity, chances are good there are people on your staff who are very knowledgeable about mortgages and their documentation. If a lending institution has to re-work a lot of loans in a short period, they may not have enough trained staff to do it. Perhaps you can provide an outsourcing service or create an employee leasing program to help them meet their needs.
Or perhaps you are a car dealer. An analyst was quoted Friday as wondering “how many people are just going to hold on to their vehicles until they fall apart.” All those vehicles will have to be taken care of if they are going to last that long. Although owners of older cars often go to local mechanics, they don’t have to. If a car dealer can re-orient its thinking and make servicing cars over long periods a real priority, it might be able to generate revenue, while also retaining both customers and staff. Some re-training to focus on the problems that affect older cars might be required. Management might have to learn how to outsource some aspects of the business if they don’t have staff trained do some of the more complex kinds of repairs for older cars. These relatively small changes may, however, create a loyal customer base that will be useful to have when the economy turns around. It may also create a staff business process that is ready to support continuing customer relationships as owners generally begin to purchase new cars expecting to drive them for long periods instead of leasing them, expecting to give them back in 3 years.
We do not pretend that these are tried-and-successful strategies. Very few new strategic directions are. But these ideas are reasonable things to think about. Negotiating new arrangements might take some time; some new skills may have to be added to your organization; and new ways of business might also require giving up some aspects of your business’s self image. But new approaches might also forestall some firings and bankruptcies.
What are you thinking about? Do you know enough about your business – your customers’ current needs, potential customers you have ignored or under-served, your competitors, your vendors, your employees’ skill sets – to know what you might have to sell in this environment and where your natural buyers may be? If you don’t, now is the time to learn. You have a history; you have hard assets and skills. These are your inputs. By letting go of the habits you usually take to thinking about them – and about the outputs you expect them to produce – you may fine novel ways to use them that could save your business for the long run.