I have a friend who has been building a great technology business. Over the first couple of years, he exceeded all his expectations in terms of sales and financial performance. He was able to recruit some great engineers and this enabled him to take on more clients and bigger projects.
Things were going great.
And then his business hit a rut.
Several important clients left. Sales growth slowed. And two of his top employees submitted their resignations. The business was still steady, but my friend couldn’t seem to figure out how to get things moving again.
Does this sound familiar?
Here are 4 critical signs that you need to take a fresh look at your strategy
It’s harder to set and achieve goals.
All businesses experience a slowdown in growth. You begin to saturate target markets and customer groups, and market penetration plateaus. But in the past you seemed able to pivot to new segments or change your proposition to keep things moving. Now it’s getting harder. You aren’t sure what to shoot for and the targets you do have are being missed.
A common response to the inevitable slowdown is to spend more time working on goals. A lot of strategy frameworks devolve from goal setting exercises. But better goal setting usually misses structural problems growing businesses experience when their business models tap out or copycats and other competitive forces enter the fray. Exhorting sales teams to aim higher, run faster or yell louder, doesn’t address these structural problems. In fact, they might make things worse.
You are being surprised too often.
Things start happening that no one expects. Customer requirements change in ways you didn’t anticipate. New competition appears. Suppliers try to muscle in on your action. Outside parties start challenging your business approach or reputation. These surprises put you on the defensive and suck up time you should be devoting to growth.
You don’t know why you are winning or losing customers.
You seem to have lost the pulse on your customers … the very thing that set you apart. You used to know your customers in a way that anticipated and delighted their needs. Now you study the CRM data and call reports and can’t make sense of why certain customers are leaving you or why other customers are buying for the first time.
Good people are leaving and you don’t know why.
Every growing business experiences talent loss. But when departing employees give cliche' reasons like “it’s time to move on”, “I’m no longer being challenged” or “I’m not growing anymore,” it may be time to take stock of the situation. Are these excuses? Or is your talent really saying “you don’t listen to my ideas” or “we don’t understand where this business is going?” Talent wants to contribute and wants to be part of a winning team with a clear and compelling game plan.
The Good News...
The good news is strategic therapy doesn’t have to be complicated.
What it requires is a brief time-out and an honest and thorough assessment of the situation. While you can certainly call in help (and those of us in the consulting game get to eat), don't get caught up in clever or involved processes. Seek fresh perspective, not beautiful charts and diagrams.
Also, major surgery is rarely required.
What is typically needed is a small number of clear decisions and a dogged determination to pursue them.
Over breakfast with my friend, I suggested it was time he took a fresh look at his strategy. After a couple of “strategy discussions” we identified a critical weakness in his operations and also some huge customer opportunities. With just of handful of “to-do” items, my friend began to figure a pathway out of the rut. His top performers worked out some innovative product ideas. And very quickly the business scored several new clients. Sales started growing again.
Nat Brooks is the Principal and founder of Strategy Shapers, a consulting firm specializing in strategy and competitive intelligence. Nat brings 25 years of Fortune 500 experience to help his clients develop winning business strategies.
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