Entrepreneurial Concepts for Strategic Planning

In today’s rapidly changing economic environment, this year’s indicators will very likely not be a useful measure of what will happen in the future.

Using these indicators is a need to develop foresight as to what the future holds in store for the firm. It involves identifying potential opportunities and threats before they appear, and this process has a strongly entrepreneurial character.

The usual ways of doing business are falling by the wayside. Prior years’ indicators do not have the value they once had. Organizations using them that were characterized by bureaucracy, control, rigidity, and functionalism have become outmoded—the obstacles to change management. Perhaps the most significant barriers are peoples’ attitudes toward change, which are often fixed and resistant.

Entrepreneurs have an edge here because the process of crafting a strategy has a distinct entrepreneurial quality to it. Namely, it requires vision and creativity. It is a different process because there are no certainties. That world of uncertainty is the world of the entrepreneur. Entrepreneurs have come to thrive on continual change, and they expect continual problems and challenges.

Entrepreneurial Concepts for Strategic Planning

What are some key concepts for strategic planners to consider that will allow them to craft a strategic plan like an entrepreneur? Here are some ideas.

  1. Just two or three decades ago, many companies were still debating whether they should globalize. This debate is over. The spread of the Internet is the reason. Any company that creates a website has an instant global reach with corresponding demands for worldwide delivery and service.
  2. Many firms have used outsourcing to reduce operating expenses. Unfortunately, efficiency by itself will no longer be enough to sustain a competitive advantage.
  3. Reputation is the single most valuable asset of a business today. Just look at Toyota as an example.
  4. Robust practices in strategic risk management are needed to prevent corporations’ character weakness from pulling down the firm. While the recent financial crisis provides ample examples of this, the difficulty here is strategic risk management tools and techniques are harder to implement as business operations become more complex and operate in multiple locations across the globe.
  5. Failure can be an excellent teacher. What can lessons from prior failures be applied to new ventures?
  6. Many organizations experience rapid growth at some stage of their life cycle. A consistent characteristic of this growth is that growing demand exceeds existing resources. The result is business leaders must be creative in acquiring and managing the resources needed to support the growth opportunities.
  7. Strategy formulation, while extremely challenging and difficult, is no longer the main challenge of an organization. That is now the execution of the strategy. Unlike entrepreneurs, managers are trained to plan, not execute.

Managers are different from entrepreneurs because while many are comfortable planning, they lag in putting the plan into action. In many ways, the execution is even more important than planning.

As we advance, the critical sustainable advantage will come from an organizational capacity to work closely with other highly specialized firms to get better faster. This process will be enabled by the emergence of global process networks that will help accelerate learning across an organization’s broad networks.

LEAVE A REPLY

Please enter your comment!
Please enter your name here