There is a lot of political rhetoric in the US about the middle class and small business, in particular the role small business will play in leading the US back to prosperity. CIT commissioned a very interesting study of middle market companies and what theyÔÇÖve learned about how to prosper as a result of the Great Recession.
One of the key findings noted in this report was the importance of change. 51% felt the need to continually change in order to survive and prosper. Change means many things to many people ÔÇô is it incremental or disruptive or somewhere in-between? How much is needed to sustain your competitive advantage? According to the study a majority of these leaders learned the importance of challenging the status quoÔÇª identifying greater efficiencies around operations in order to have a leaner company.
The study also found that the value of strategic planning was considered the 3rd key lesson learned by 43%. Not surprisingly the companies that fared the best could claim they ÔÇ£have a clear strategy in place, reached by consensus of key executives, it has been communicated, and it addresses short and long-term implications.ÔÇØ Sadly, only a third of the companies surveyed could make that claim. The study reported that only 40 percent of companies with weak or lacking strategic management say that they are stronger than they were before the Great Recession.
A statistic from the survey surprised me, although it probably shouldnÔÇÖt have. 39% of the companies surveyed rated R&D ineffective. With all the hype about open innovation and crowdsourcing and the well-known challenges of the not invented here syndrome I optimistically hoped that R&D was opening up. R&D budgets are challenging with even the largest companies so I suspect budgets are even tighter for these middle market companies. All the more reason to leverage crowdsourcing and open innovation to mitigate tight budgets and enhance the R&D pipeline and portfolio.
The CIT study reported that leaders from companies with a strong strategic management rating were particularly receptive to two lessons:
To shed some light on what that strategic planning might look like I pulled some insights from a recent Price Waterhouse Coopers report where they articulate 3 key strategic approaches from a survey of 1,330 CEOs in 68 countries on how these executives plan to adapt and thrive in these disruptive times.
- 1. Target specific pockets of opportunity for organic growth, avoiding spreading their resources too thinly.
2. Maintain a clear focus on the customer, taking active steps to stimulate demand, loyalty and innovation in their customer base ÔÇô through mechanisms ranging from digital marketing platforms to collaborative R&D.
3. Fine-tune their operational effectiveness by reducing costs without cutting value and collaborating with trusted partners.
We invite you to engage our expertise to design a winning strategic vision that will enable greater resiliency to maximize the opportunities ahead.