OPEN for Discussion: How Important Is a Long View Strategy?
Ideally, every small-business owner would focus on the long view. We would always be purposeful of how, when and where we could expect growth and would set and achieve a series of goals to get to a certain desired point.
According to the Alternative Board’s survey, small-business owners with a strategic plan they consider “excellent” or “good” are much more likely to project a sharp increase in profits and sales revenue than owners without a strategic plan.
Sometimes, though, the real world gets in the way. We are pulled in too many directions and, before we know it, the year is half over. A volatile market requires a change in direction.
I wanted to know how successful small-business owners balance future planning with immediate priorities, so I talked to Jon Izenstark, co-founder of HR consulting firm Culture Factors in Chicago; Laura Land, CEO of cell phone accessory company Empire in Riverside, California; and Rachel Rodgers, founder of Rachel Rodgers Law Office in Tenafly, New Jersey.
How did you get to where you are today? In what way was it a result of long-range planning?
Jon Izenstark: It was a fairly quick gut decision. I was working in a sales role for a management consulting firm with some really prominent industrial psychologists who helped me to develop a passion for the field and business. When the firm was sold, my partner and I stuck around for a while, but this just seemed like the next logical move.
Rachel Rodgers: In the beginning, I would put together an annual plan for the year and usually accomplish a good portion of that list. In the past two years, however, I have been working with an executive coach/business advisor with whom I have created a long-term plan. We are slowly but surely executing on each piece of the plan. We are definitely playing the long game now.
Can your business be successful if you don’t take the long view?
Laura Land: Yes, some industries require adaptability. Over the last 12 years, our business has transformed about every six months. Staying relevant is most important.
Izenstark: That depends on your definition of success and your business plan. There are lots of successful businesses that have a finite lifespan for a product or solution. They make money for the principals for two to three years and then close the doors. Our business model from the onset was designed to be sustainable long term and needs long-term planning as a core competency.
Rodgers: I think you can have some success, but you eventually have to have an overall vision to remain successful. Even if you are lucky enough to become an “overnight sensation,” you still have to make long-term plans to determine how to maintain that level of success.
How do you maintain a happy medium between a long- and short-term focus?
Land: The long-term focus has to be very broad, while the short-term focus has to be precise. In the end, the long-term result ends up being a combination of all of the short-term focuses, and each short-term project or goal can slightly change the long-term outcome.
Rodgers: I have a long-term plan that spans several years, but I also do annual and quarterly planning. You need the short-term planning to focus and execute, but you also need the long-term planning to stay the course and reach your ultimate goal.
How do you think small businesses sometimes mishandle or ignore long-range planning?
Izenstark: It’s easy to get lost in the moment of the “next client” or the “next sale,” and that distracts from long-term goals. I meet entrepreneurs all the time who just seem to like the thrill of the chase.
Rodgers: Cash flow is one of the main reasons small businesses focus on short-term wins and ignore their long-term plans. Sometimes it’s the shiny new object syndrome. The long-term plan really helps owners make smart decisions about opportunities in the short-term.
Land: Small businesses ignore long-range planning because they only have the resources to focus on the here and now. Long-term planning is somewhat of a luxury when you are overwhelmed with running a business on a day-to-day basis.
If a business isn’t focusing on the long view now, how might an owner start?
Izenstark: For small businesses, simple is always better. Plans are really only perfect on the day you make them. Start with trying to understand what your strengths are, and then try to leverage these to improve your business ideas and processes.
Land: Set a broad goal for your company. If you make your goals too specific, something will come along that completely derails you. Your long-term plan has to be flexible enough to adapt.
Rodgers: Start by creating a five-year plan. Think about what you want your company to look like and what you want to have accomplished in five years. The vision comes first, and then you can create the plan to get there.
Read more articles on business growth.
Photos: Getty Images, Kate Muelle, Courtesy of Laura Land, Christa Meola