Thinking strategically

Transcript

 

About today’s guests

Julie Stanford:  Thinking strategically in your business. As soon as you start a business, you’ll be told you need a vision, a mission and a strategy but what are they and exactly how do you develop them? I’m Julie Stanford and a while ago I presented a radio show for Radio Reverb in Brighton. What my guests talked about then is still relevant today. My guests on this show are Phil Green, Joseph Clayton and Al Tredinnick and we talk about thinking strategically.

Today we’re here to talk about thinking strategically in a business and the importance of strategy in a business. It seems to me that before we do that, we have to actually define what it means. I’m going to put Phil on the spot first. I should imagine though that the three of you might have different opinions about this. I’m hoping you have otherwise it’s going to be a bit of a boring show. Phil, to you first it’s crucial in a business I think we would agree but can you tell us exactly what it is and why it’s crucial.

 

Defining strategy

Phil Green:  Okay, I think it is crucial, absolutely. Too many small business MD’s lose track of the strategy. They spend their time digging around in the business. I think it sits probably under the vision which is probably a whole radio show on its own as well. The vision is something that you want to achieve, how you’re going to achieve it. Strategy is how you’re going to actually get there. Probably the difference is that strategy will inform what you do for the next say, five years, an operational matter is what you do in the next five minutes. That’s probably the difference between strategy and operations as far as I think. The other most important thing about strategy is it allows you to make a decision. If you think of something, employing somebody new, taking on some new premises, buying a computer system, whatever it might be, does this fulfil part of my strategy or not. If it doesn’t, then why am I doing it. That’s probably the touchstone.

Julie Stanford: Okay, so Phil can you give me an example of that?

Phil Green:   I suppose, well one example is this show. I’ve come and spent a couple of hours with you, lovely though that is obviously Julie, but for my business, if this show was only going out in the Isle of Dogs, it wouldn’t be a very good strategic fit for me because the MD Hub is based in Brighton and Hove and it surrounds, we’re pushing out into the surroundings of Sussex. A show that went out in the Isle of Dogs, not a good strategic move. It wouldn’t be part of my business strategy to come on. This show, great.

Julie Stanford: Yeah, I see that point then that it’s a constant, it’s a referral point. It’s a way of just saying, “Are we going in the right direction.”

Phil Green:  Yeah, we got so, most MDs have so little time. They have to do something which allows them to make decisions and strategy is one of those things. If you can literally look down on a piece of paper and say, “Does it fit, yes or no?” then it helps you make a decision.

Julie Stanford: It’s interesting actually because as you said that, it reminds me of that, I think one of the problems for business owners is getting unnerved. If you encourage them to be focused because we want to be all things to all people and we’re worried that while we’re focusing on point A, point B might be the better place for us. As you said that then, I realised that that would be the resistance in me is that I want to do all of it because of the kind of personality I have. To be gently encouraged to be specific is hard.

Phil Green:  It stops for verification as well because we’re terrible at going around in circles saying, “Oh, should we, shouldn’t we, should we, shouldn’t we.”

Julie Stanford: Okay, so in some ways then what you’re saying could be any strategy is a good strategy. Well, it’s at least a strategy but it can be adjusted.

Phil Green:  Yeah. It can be adjusted and obviously always will be. You lay down a five year strategy, you’ll change it within five weeks probably but the process of writing it down first of all and then referring to it and using it, you refine it as you go along.

Julie Stanford: Al, can I just come to you now and hear what your definition of strategy is.

Al Tredinnick:  I think strategy is it’s kind of a road map to whatever your goal is. Goal setting is probably a whole other subject we could talk about but it allows you if you’ve got a strategy for your business and where you want it to get to in five years, ten years, fifteen years, whatever it is it allows you to then break that plan down into chunks and to set yourself benchmarks. I think having a good strategy is a brilliant way of keeping score so you can see whether you’re winning or not. If you don’t have a strategy, as we’ve just said you don’t know whether the work you’re doing now is taking your towards your goal or not. You can have a strategy in all areas of your business but it’s really good to put benchmarks in so you can see whether you’re hitting them or not or whether you’re ahead or behind schedule. Without a strategy, you just don’t know that. It’s rightly important to have one but it’s as much as anything else just a way of kind of telling whether you’re getting there or not. Without a strategy you just don’t know.

Julie Stanford: But if you have that vision and so you’re standing in this point and I want to go to that point, I’m heading towards that place which is my vision. There is that sense that how do you know if the strategy that you come up with is the best way of getting to that vision?

Al Tredinnick:  Yeah, absolutely, as we’ve already said you’ll keep adjusting the strategy. I think having a strategy is the most important thing. Even if it’s not the right strategy for now, you’ll soon notice because it won’t be getting you any closer to your goal. I think lots of people don’t have a strategy for that exact reason. They don’t know which strategy to go for so they just don’t choose anything. I think that the real problem in that is that people think it’s all about the money in business. I actually think it’s a lot to do with the time. If it takes you another five years to get to your goal than it should’ve done then you can’t ever get that back. If you lose thirty grand then you can make it back again. It’s about having a goal that’s set out around time goals, around financial goals, around whatever else. As long as you’ve got that, the kind of ‘why?s’ of it will sort of sort themselves out I think.

Julie Stanford: Joseph, over to you. From your perspective, this is interesting because it’s broadly the same but there are slight differences in what’s been said so far. Joseph, are you going to add to the mix with a slightly different perspective?

Joseph Clayton:  I think mine might be a little bit different but there’s clearly alignment in all of these. One, you have to think about the term strategy. It is a military term. A strategy is not a map as such. It’s not a plan, it’s not a long term plan. A strategy is about winning something and this is a thing that sometimes organisations lose sight of. They can build a long term plan, five years, two years, it does have to be flexible. It has to be aware of changes. Where I like the map analogy is the fact that I climbed up Scafell a few years ago, quite a while ago. I got lost coming back down. A map gives you some guidance. It doesn’t tell you the environment and atmosphere that you’re climbing up. It doesn’t tell you what really to prepare for. When you look at that term strategy one of the big and strong values I try to drive forward is linking some language. You mentioned vision and so if I can I want to paint a bit of a picture.

You got to have that vision first. The vision without apologies doesn’t have to consider resource or ability to get there. It should be exciting, it should make your blood boil and go, “Wow, let’s go for it.” Then, once you’ve got that going back to the military context which is a bad example because the military seemed to have lost the definition of this as well, talk about that later, but the idea is, “What is it we’re going to win?” From your strategy you then create a mission. What I like about the concept of mission if you look at the military as an example you have air force, army, marines, in the business if you have somebody that says their strategy is a document over the next five years what they’re going to achieve, they then have a lot of things they need to manage and drive. It’s me driving that strategy or communicating it. That’s really quite difficult. That’s a huge challenge.

If instead you think of it in terms of, “I have this vision and within it a number of missions”, that is the strategy as such, you have one mission which is your marketing department’s mission. You have one mission which is the sale’s department’s mission or the European mission and the London mission. However you break it down and within that you lay out the bigger plan. Here is where we’re going and then each of them drives their own mission that’s aligned to that. You hopefully avoid friendly fire which you get in companies because people say it’s a communication problem. I’ve met a lot of great communicators. They communicate fine. The problem is they have no alignment in their mission. They have a great quote unquote strategy, a document which is a map but it isn’t a defining, what is it we’re going to win.

Secondly, it doesn’t engage the people, those different core teams in what they have to do to achieve that, what their alignment has to be with the rest of the organisations. I can’t just go boldly over here with my objectives and targets. I have to think about team A and B.

 

Strategy in a smaller business

Julie Stanford: How would you say that fitted in, though, with a smaller company?

Joseph Clayton:  Well, with a smaller company …

Julie Stanford: Those same challenges.

Joseph Clayton:  I think with a smaller company, let’s say that you are a sole trader and take it from that to then somebody who’s got three, four people to somebody who’s got 20 people. Even if it’s just me in a company, the first thing I really think is going back to what Phil said, have a vision. Where is it that you see it, undiluted, the whole beautifulness of it. Then from there, okay now what stops me from hitting that vision. Be hard on yourself. Get excited. Know what it’s going to feel like when you achieve it, believe. Then tell yourself all the things that will stop you. Get other people involved to tell you all the things that will stop you. Have people give you the big reality check.

From that you build up a plan but you always have to keep in this mindset, what is it I want to win. Does Joe want to, you know my company do I want to be the most successful, strategic training and organisational development company? Do I want to win growing a team up to 50 people and be the best known in Sussex? What is the prize that I want? That’s also what helps you keep your focus and understands that, “Yes, I’m doing all my tasks. I’m following the map just as I was told or that I laid out.” That is fine if you’re one person or 600. Then as you grow, the thing about a strategy is how you engage others into it.

Julie Stanford: Okay.

Joseph Clayton:  That’s where I would put that framework, whether I’m small or large, one person I still line it out as what I want to win.

Julie Stanford: Right.

Joseph Clayton:  As I grow, I then have to think about how I engage as opposed to just communicate.

Julie Stanford: Phil, what would you say to what Josephs been saying? I can see both of you are thinking hard as you’re listening. What does that make you think?

Phil Green:  I think he’s right. I think that the way to know whether you’ve got a strategy as well is probably the first time you say no. Thinking about the growth route and so on, when you start up in business the first thing you do is you take everybody who walks through the door. I started on my own in my business but I shared a piggery with two friends who had a business as well, which was great except when the black flies arrived but that’s another story.

Julie Stanford: And the pigs I assume.

Phil Green:  The pigs had long vacated, luckily although they’d left a reminder in the smell but it was a good place to start a business. It was cheap. It was great but I would take anything that walked through the door. Now, 12 years on hopefully I don’t do that. There’s still temptation to do that even if it doesn’t fit the strategy. For instance, a prison group we do accountancy. At its very basic, I’ll do your tax return as I promised you last time but it’s not really what we want to do – unless there’s a very good reason for doing it, I would now hopefully say no to doing that kind of work. I think that’s the big thing.

You know you’ve got a strategy once you start saying no to stuff. It then fits, you build something for a marketplace and Al does some great work on this but so many companies build products that would fit a medium enterprise or bigger and then try and flog it to a small company. It just doesn’t work or they try and sell something which is really only suited for a small company to a medium sized enterprise and get very frustrated because they haven’t got the strategy right. They haven’t got sales and marketing strategy right in that particular case.

Julie Stanford: Al, what are you thinking?

Al Tredinnick:  I fully agree with that, actually. I think one of the hardest things for people to say no to is clients actually as well. People come to you and they say, I’ll buy your product. The hardest thing in the world is to say to them, “No you’re not the right type of client for me. It’s not going to take me in the right direction.” I think it takes people ages to get to that point but it is really important. You do learn after awhile with companies that not everyone is a good client.

I think it’s the same with a lot of marketing activity. People prefer some forms of marketing to others because they find it easy. I know we spoke a few shows about doing cold calling, if you get somebody who likes networking they’re not going to pick the phone up and do cold calling. They’re totally different skills. In realising what your strategy is you realise what you are going to have to do. If it’s a weakness that you have that you can’t fulfill it you need to find someone else who can. Unfortunately, business isn’t always about doing what you want all the time. You’ve got to do, if you’ve got your vision you’ve got to do what it takes to get there.

 

Strategic or operational

Julie Stanford: I’m thinking as you’re talking, ever the practical person and I know that I used to chair a board of a voluntary organisation and they were always saying to me that I was operational, operational because it seemed to me that you could have the vision and you could even have the strategy but if it wasn’t actually possible to do it, it was all a waste of time. I was difficult to convince that it was all about vision and strategy because I was the practical person saying, “Yeah, but”, I can remember once putting together a cash flow and someone saying, “What we need to do then is have 100 people buying that number of things from us.” I just looked and said, “Well, it’s not going to happen, is it.” We have to have that but it won’t happen. How do you square this strategy with the possibility of the execution of it, Phil. How does that…

Phil Green:  I think the practical people like yourself dive into the operational stuff. The easiest thing is to go and do more of whatever it is that you’re doing. The strategy in theory should pull your head out on that occasion and look forward and see where you’re going. You should marry that hard operational work which actually is easy for us to do, it might be painful, it might take all the hours you’ve got but to actually then look up and say, “Why am I doing all this hard work?” Okay, in your cash flow you need another 100 people. Is that right? Is that the strategy? Do you want to run an organisation that has X hundred clients or would you rather have two clients that pay you loads of money and you only work three hours a week, like Al has.

Julie Stanford: So we hear actually. It is that thought then that, I’m thinking is it practically possible to do this. What you’re saying is keep your head up because it could be that if you had your head up and you were looking at what was available you could set off in a much, much better direction that you would miss if you had your head down doing it, doing it, doing it everyday.

Phil Green:   That’s what happens in the MD Hub work groups. Those MD’s who spend hours down, get their heads up and look around and anybody listening to me knows I’m saying but not doing because I’m terrible at getting my head down …

Julie Stanford: Always good to know that we’re all the same. Joseph, are you strategic or are you operational? How do you advise your clients?

Joseph Clayton:  You have to have a balance of both. That’s a pretty obvious statement, I think. In terms of working with clients, a couple of things were said that’s important. One, you have to listen to people. When you were saying, “Well that’s fine you may want that, we can’t do that”, when people use that language you need to listen to them. “Why can’t we do that? What is stopping us from doing that?” Oddly enough your answer is often in those people least willing to just jump on the boat and go, “Look at that. We can have that. Great, let’s go do it.” There’s a bit of denial involved with that.

It’s good to have people that say, “But that can’t happen.” By examining through that, you start understanding, “Well, if those are the six things that might stop us what would happen if we turn that around? Now, we’re very clear that there are six things that will stop us from getting that level of revenue or number of people through. Well, that’s good. I’m now in a position of control.” You have to constantly think of a couple of things when you write a strategy. You want to be visionary, absolutely but you have to think about real potential.

I’m working with a company right now who wants to double in the next 12 months. The market place that he’s working in has massive potential. It’s just that I don’t actually care how much competition he has. The potential is there so the things stopping him are very much internal in terms of retention, keeping people on certain time scales, zero to six month in particular. He knows that that will stop us. People pushing themselves and stretching beyond what they believe is what you can achieve in a day. Well, some people have achieved twice that but they thought it was luck. You have these little things that mark out potential along with the people that say it can’t be done. You group those in an interesting way together.

From that, you go back to good old-fashioned simple stuff, process. Forget the exciting stuff. Talk through the nuts and bolts with that form change, with the time that you make those calls change. The details stuff. You go back to people’s belief. Again, the more exciting stuff and even somebody’s environment to make a strategy happen, do you have the right environment for people to work in? You need a more competitive environment because people aren’t really spurring each other on. It’s only you and your management team doing it. That has nothing to do with process or their skill but by them engaging the rest of the team, to drive each other a bit like a sports team I suppose, then he would get more results.

Julie Stanford: It’s really fascinating actually. Al, I’m just thinking, how would you then go about getting the buy in. If we’re putting this strategy in place for a company, a smaller company maybe with a few staff, how would you then, would you say to the business owner that it should be put together with the staff to get that buy in? It seems to me from what you’ve just said, Joseph, it’s crucial that everyone’s on board. It can’t just be the leader going, “Okay, we’re going to do this. This is where were going, that’s where we’re headed and this is how we’re going to get there.” Everyone’s thinking, “Well that’s ridiculous and I don’t want to do it.”

Al Tredinnick:  I’d say first and foremost, I’d say actually, I know this sounds like a really obvious thing but if only you know what your strategy is for your business, you probably won’t get there. There’s an amazing amount of business owners out there that have a strategy and they’ve not actually shown it to anyone that works for them. It’s surprisingly common. You’re not going to get there unless they know about it and they know why they’re doing it.

I do think the best way to get by on this is to involve people in the process. If you have got a team of people around you that disagree entirely with your strategy that don’t think it’s a good idea that don’t think you can do it, you’ve probably got the wrong team.

Julie Stanford: Or the wrong strategy.

Al Tredinnick:  Or the wrong strategy. It’s like Joseph was saying, you need to involve people in that process and they will get ownership because if you do listen to the issues they have then it becomes the company strategy not just your strategy and everyone’s involved in it. It is really important. It doesn’t take long actually if you’re an owner-manager and you start employing people to get to the point where you don’t actually understand how it’s executed anymore. I’ve seen it a lot with sales actually. Sales people that are out there the strategy takes it in one direction, they know what people are buying, how much they want to pay for it and how that’s going and someone says, “No, now we sell this,” without listening to the sales people about what the potential revenue is. You’ve got to involve your team.

 

Putting a strategy into place

Julie Stanford: The way you say it actually, it’s a no brainer. Phil, I’m just thinking now that we’re coming to, we’ve got five minutes left so they’re five important minutes. I just really want to get the most out of you before you all go. You’re really interesting people to listen to. As we’re thinking now of the people listening, who might be thinking I don’t have a strategy, I now understand it’s crucial. What steps would you suggest they take to put that in place now if they’ve got a small team, we’ve decided it all needs to happen together. How would they manage that process of getting it on paper?

Phil Green:  I think, first of all, do some hard thinking yourself. Know what you want from the business. We occasionally run strategy workshops and we had a client came in, two directors. One wanted to spend three days a week at work and two days a week surfing. The other wanted a 100 million pound business. Now, it’s possible but highly unlikely that that’s going to happen where they’re effectively pursuing different dreams. You couldn’t build a strategy that would really do that for both of them.

I think think hard about what you want and what other people in the business want then include your staff exactly as Al said so they understand. Otherwise, they’ll carry on doing whatever they love doing which might not be your strategy. Also, involve your customers. Your customers might not want to buy what you want to sell them. There’s nothing worse than building a fantastic product and finding no one wants to buy it. I think that’s the way you do it. Then, run a day. Go off site. Take everyone away and just talk to them about what you’re doing. Get their feedback. Also, change it.

Quite often entrepreneurs and MD’s will say, “This is my vision, give me your feedback.” Then they’ll ignore it. At the end of the day, they’ll go back and still stick down their vision so listen to what they say. Change what you’re doing. Change your strategy. Make sure everyone’s on board then you can run with it. Then, get your head out of the business occasionally and make sure you’re still doing it right. I remember, I told this story yesterday but I remember when I first started to learn to drive, after about an hour my driving instructor said, “You’re looking at the end of a bonnet, you should be looking down the road.” Apparently that’s what happens but I was only driving a Mini. I wasn’t looking very far.

Julie Stanford: I think I might be doing that in the business.

Phil Green:  He said, “If you look down the road, the car will get there.” Sure enough as soon as you look up and you’re looking down the road the car does get there. You don’t go all over the field just because you’re looking a half mile down the road.

Julie Stanford: I used to tell people think like a meerkat. You know how they’re always up and looking and seeing what’s going on and I love that analogy of them all being perky and interested and seeing where things are.

Phil Green:  You have to look down occasionally as well.

Julie Stanford: Yes, to see if there’s a mongoose or whatever a snake around your ankles. Joseph, what about you, what would be something that you would like to leave with listeners about the importance of strategy?

Joseph Clayton:  You first have to have potential in the market but that’s obvious. Moving that aside, be brave enough to be visionary. Make a list of no fear: “This is what I want. This is where I want to go.” Don’t worry about how you get there. Then you take that and you think, “Okay what will stop me from getting there?” This is where you start engaging people. Whatever level, first at least your junior management if you have that type of structure. If it’s only three other people then engage them straight away. Then from that, that term mission, it’s much nicer going to work because I have a mission than old school, here’s the strategy. There’s the target, Joe. Here’s your objectives. I’m coming to work to do targets. It drives you, it motivates you but not like a mission.

No matter how little time you’ve been in a company or how low the grade is supposedly you work, if you feel you’re going to work with a mission and you can see how that aligns to this big strategy and what you’re going to win that’s more powerful than any kind of bonus or incentive scheme you can possibly imagine. That’s what I would leave. Be brave. Don’t be scared. Articulate it, engage.

Julie Stanford: Al, last word with you from this part of the show. Just what would you leave with people because you’ve all agreed it’s crucial. What would you advise people?

Al Tredinnick:  I would just say if, I think a lot of business owners do know that they should have a decent business strategy and some goals. They struggle to either get it together or get one. I would say the best thing to do is go and get help. Go and talk to someone about it. There’s loads of government run schemes you can go to. You have MD Hub you can get a consultant. Whatever it is but actually get someone to help you with it. Even if it’s just sitting down with your ‘other half’ or your accountant’s very good at this kind of thing sometimes. Just sound the idea out against someone. Don’t try and work it all out on your own. Particularly if you don’t think you’re very good at it.

Julie Stanford: Excellent. So in fact, actually all three of you could be helping most people listening. I just think it’s fascinating stuff and I’ve really learned a lot as well. Thank you very much, the three of you for coming along today.

This show was originally recorded for Business as Usual on RadioReverb. I’m Julie Stanford. Thank you for listening to Essential Business Radio.