Bad Small Business Strategy

A couple of years ago, my wife and I started training for a marathon. We came across an old book from Jeff Gallaway that we used for our training program. Jeff says that the major reason people don’t finish a marathon isn’t because of lack of motivation, but because of injury. They fail not because they didn’t work hard enough. They fail because of a bad program. They fail because of bad strategy.

A bad strategy in athletics is easy to identify because there is a lack of progress caused by slow improvement or even injury. In business, it is similarly easy to identify a bad strategy by lack of results.

Most current business strategy trickles down from big management consulting firms focused on large corporations. While there can be some principles that are helpful for small businesses, much of it is actually detrimental.

Bad business strategy stems from a lack of context of your environment that leads to a lack of judgment of the best path forward that leads to a lack of attention to the most important work. As a small business owner, you need some filters to decide if a strategy will ultimately lead to better results. Here are some diagnostic questions to help you identify if you have a good strategy:

  • Better Offer. Does the strategy help to enhance your product/service offering? Large enterprises have multiple product lines and multiple business units. The executive’s responsibility is focused on which products or units they should be allocating capital towards. These are investment decisions and much business strategy is focused on creating enterprises that can do this well. That isn’t the correct context for your small business. Your strategy should be focused on how to better serve a single customer. As you do that well, you can start to expand either the portfolio of what you offer to your customer segment or you can expand your existing offering to an adjacent customer segment.
  • Better Focus. Does the strategy help to improve your decision-making process about what to focus on? The fact is that all work isn’t equal. There are certain key activities that you need to be working on that if done right will exponentially increase your return. Lacking judgment on what product features or services will add value to your customers is a fatal flaw for a small business. You just can’t afford to be all things to all people. Adding more products or services is usually not the answer. In my experience, small businesses need strategies that show them how to focus and refine their product offering, not how to expand it.
  • Better Plan. Is there a plan in place to make sure the work that is important is getting done? Lack of attention is many times solved by increasing your judgment. When there isn’t good judgment used in focusing on the most important work, something suffers due to a lack of attention. For a small business owner, commitments outside the business like family time are the first casualty, but even commitments within the business can suffer due to burnout or lack of motivation.

If you are unsure if you have a good strategy right now in your business, one quick measure to be aware of your motivation. Ask yourself if you can keep on this pace for the next 5 years. If not, something needs to change now. Working harder is the fruit of bad strategy. It is like a bad training program for a marathon. The result is that you will become injured and you can start to feel defeated or depressed.

Running a small business requires a marathon mentality. We are in it for the long haul. It requires an appropriate small business strategy that is sustainable. It needs to account for the context of the environment you are in to create a better offer to your customer, give you tools to decide what to focus on, and help you create a plan to pay attention to the most important work. The result is extremely satisfied customers, higher profitability but most importantly work satisfaction for you.

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