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2011 Growth Strategy Survey Results

In October of 2011, Don Springer (The Colton Group) and I conducted a survey of leaders from 22 companies about their strategies. The industries ranged from high technology manufacturing to pure service companies. The goal of the survey was to uncover the strategy challenges for 2011. The survey consisted of 12 questions.

1.  What is your position at your company?
2.  What does your company sell?
3.  What industry do you compete in?
4.  What is the size of your company (annual revenues)?
5.  What is the size of your company (employees)?
6.  Is your company public or private?
7.  How often do you review and revise your strategies?
8.  How important are the following to your business in 2011?
9.  How do you currently get better at strategy?
10. Rank the following areas in order of needed improvement.
11. How do you measure the effectiveness of your strategies and use the results to improve?
12. How important is improving your strategy process and performance?

The survey can be downloaded here.

The survey respondents overwhelming represented smaller (<$50M in annual revenue) private companies. Ninety percent sold services (only 9% sold only products). Approximately 60% had 50 or fewer employees. Traditionally, this type of company has fewer specialists as compared to larger companies. The leaders are often responsible for strategy, operations and day-to-day management. Commonly, significant roles that require new skills are neglected or minimized.
 
Demographics 

 

Notes: The respondents largely represent the people that run the companies. Although multiple titles are possible for an individual, slightly less than half were either the CEO or owner.

Top 5 Important Strategy Activities in 2011

1.  Deciding the right strategy for the business

2.  Aligning the management team to support the strategy

3.  Balancing strategy and tactics effectively

4.  Deploying strategy within the company

5.  Improving operational efficiency

Notes: There are may options for growth but deciding on the right one for a business is the fundamental challenge for most companies. Selecting the right strategy by testing assumptions, leveraging core strengths and analyzing the competitive environment is difficult. Interestingly, the second step of aligning the management team and employees is the second most pressing issue for respondents. Clearly, an effective strategy requires thoughtful deployment to succeed.

Notes: No respondent thought that strategy improvement was unimportant. Most recognize that strategy improvement competes with other activities for management attention. The central question is whether there is a proper balance between strategy and tactics, between the long term and the short term. Only the CEO/Owners can enforce the right balance.

Notes: Perhaps this is the most profound feedback in the survey. Though most respondents feel the need to improve strategy, 4 out of 5 simply use trial-and-error techniques. This is consistent with other data that shows that CEO/Owners value intuition and experience over other proven methods. When strategy is not already a core strength of the management team, this is inefficient at best and dangerous at worst.

Notes: Generally speaking, strategy should not change frequently since that would imply significant rippling changes throughout the organization too often. On the other hand, SMB's often seem to have few mechanisms in place to trigger reviews and revisions, especially when the key success measures are the trailing indicators of revenue and profit (see below).

Notes: The most common measures of success are revenue and profit performance. While these are undeniably important, significantly, they are trailing indicators of successful strategy. Proactive, leading indicators are not commonly used by the respondents.

Notes: The most common challenge is defining a strategy for business growth in 2011. There multiple reasons why this might be so. First, growth is fundamentally difficult in a highly competitive environment. Second, few SMB leaders use a methodical process for finding growth opportunities. Third, as evidenced by the challenges of organizational alignment, it is not always easy to mobilize the management team to execute the strategy.

 

 
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