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Business Insights from Andrea Hill

If you follow a logical, tested, practical strategic process, you can implement all the strategic building blocks your company needs to be competitive and successful.

Sit. Crawl. Walk. Run. Stairs. The Strategic Process

25 February 2016

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Two of my grandchildren are under the age of two. Active little boys, they give me such delight as I watch them develop and grow. They also make me gasp in fear on a regular basis.

Just the other day, I looked up and saw the 21-month-old carefully walking down the stairs from the 2nd floor, holding a fairly large (for him) wooden box in his hands, and therefore not holding on to the railings. We’ve been teaching him stair safety, which involves sitting on his little bottom and scooting safely down the steps. But apparently this box (absconded from his older sister’s bedroom) was just too absorbing. He forgot about scooting entirely.

I managed to keep my cool, walked up the steps, and hovered in front of him while he successfully navigated the stairs one foot at a time. At the end of his trip down the stairs, he was very proud of himself and I was sweating.

But I realized that he was ready for the steps. He has been practicing walking up and down our miniature dachshund’s stairs (yes, she’s 14 years old and needs them to get on the couch) for weeks. Before that, he had mastered running. Before that, walking. And before that, he crawled.

This biological and intellectual advancement follows a very set pattern. We’re watching his 7-month-old brother go through the same developmental steps now. As they get older, they will do some things earlier, some things later than each other, but the pattern of human development is pretty well set.

As it is with business development.

Unfortunately, many people who start and run small businesses don’t understand that there’s a sit-crawl-walk-run-stairs progression to business. They jump in wherever they are most comfortable –usually making or selling something – and just go from there. It’s no wonder so many of them fall down the stairs.

The strategic process was probably not as important to a grocer opening a store in a small town with no competition 70 years ago. But with each passing decade and the associated improvements in technology, the disciplines of strategy, establishing competitive advantage, branding, marketing, and operations have become more and more important. Today it doesn’t matter if you are a very small business or a very large one – these skills are critical to sustainability and profitability.

The Strategic Process Flow

The good news is, if you follow a logical, tested, practical process, you can implement all the strategic building blocks your company requires. Explaining all of those building blocks in one blog post – or even one book! – would be ambitious. Today, I just want to share with you the crawl-walk-run-stairs order of business.

  1. Every business success starts with a strategic plan; a plan that lays the groundwork for a company’s competitive advantage and differentiation. Without this plan, a business is just spinning its wheels on ice — it burns lots of energy and wears down the tires, but goes nowhere.
  2. The strategic plan actually provides all the information needed to create a brand identity. That’s right – brand comes directly from strategy. The strategy is more than numbers; it is the expression of the businesses most fundamental purpose, goals, and objectives. These are the things that inform your brand.
  3. Once the strategic plan and brand strategy are done, the business process forks into two roads that run parallel to one another and can be driven at the same time. On the outside track are the external business elements:
    1. Sales Plan: sets goals for sales numbers and rate of sales growth.
    2. Marketing Strategy: establishes the direction, goals and objectives for achieving the sales plan.
    3. Marketing Plan: the monthly/daily/weekly implementation elements of the marketing strategy.
  4. On the inside track are the internal elements:
    1. Business Plan: the strategic plan covered the why and what of your business - the big picture. The business plan covers the whowhenwhere and how. It always looks out 2-3 years.
    2. Operating Plan: The operating plan is your annual plan to achieve the business plan.
    3. Cash Flow Plan and Budget: These are the tools that will keep you in control of your cash and resource allocation.

Each step informs the next step. The sales plan must come after the brand (which came after the overall strategy), and you need the numbers from the sales plan to complete the business plan (which is running roughly parallel to it). Staying with the external track, once you know your sales plan, you can create marketing strategy to achieve the sales goals, and the marketing plan is the month-to-month playbook to achieve the marketing strategy.

The inside track has the same sit-crawl-walk-run-stairs progression to it. Once you complete the business plan, you can make your operating plan, and once you have your operating plan, you can create a cash flow plan and budget.

But what if your business is already in full gear and you realize that some of these pieces are missing? Back up to the first missing element and start filling in the blanks. You will gain new insights, correct business problems, and come up with new ideas along the way.