From maps to GPS apps: what strategy are you following to grow your top and bottom line?
Three key actions you can take tomorrow to turn progress into momentum.
By Alex Teece | May 2, 2024
Remember Mapquest? Before leaving for a trip, you set a destination, printed directions, tried not to forget them, and then followed a sequential series of turns to get from point A to B. “We hope you have arrived at your destination. If you haven’t, we can’t help you, because we don’t know where you are. Likely, neither do you. Sincerely, Mapquest.”
Launched in 1996 in Denver, Colorado, Mapquest is an early example of the GPS-driven navigation systems we have come to rely upon today (e.g., Waze, Google Maps, Badger Maps). The problem Mapquest solved for: directions from point A to B without having to match surroundings and street signs to a map. There were no traffic optimization algorithms, fuel cost analyses / charging stations, or re-routing due to adjustments along the way (say, to stop at a highly rated eatery from your Instagram foodie feed). People moved on from maps and directions to real-time, GPS travel companions that not only get you from point A to B, but adapt along the way.
Mapquest and maps is the current state of strategic planning for small and family owned businesses today. Generations ago, there was a map, handed down and marked up through time. Maybe there was a set of printed directions to help steer the business towards a goal or state of being. But, more often than not, there does not exist an up-to-date, nimble set of strategic priorities that allow for attainable, sustainable growth into the next several months, quarters, and years.
Institutional knowledge is important; but, it is not enough. An inherited plan is helpful; however, it is static and in the past. The lack of a sound strategy is more prevalent than you think in today’s small and family business ecosystem. Let’s explore why, what a simple plan will do for you, and a few small steps you can take to make immediate, lasting progress.
A map alone is not enough.
Why is strategic planning so difficult? Per Harvard Business School, “only 10 percent of organizations successfully implement and execute strategic planning, and 50 percent of leadership teams dedicate little to no time to it.” Most businesses are operating without a fully formed vision or direction of where they want to be one, three, ten years from now. According to Deloitte, strategic tensions such as “incoherence, incongruence, and inconsistency” plague the actual planning process, preventing teams from building and executing upon plans.
Teams that do get strategic plans off the ground often find they are overly complex and end of shelving them. They are framed in terms of what teams won’t do (e.g., stop losing bids, decrease reliance on temporary staffing) as opposed to clear, simple, affirmatively framed tactical actions and outcomes.
Additionally, many strategies fail to get implemented because they do not represent a clear set of choices (Harvard Business Review). Supporting executive teams to follow a clear, consistent framework to make decisions is a strategy in and of itself. Boston Consulting Group calls it Smart Simplicity, through which they coach clients to diagnose, solve, and implement solutions along a co-created roadmap towards a defined goal or state of existence.
“Only 10 percent of organizations successfully implement and execute strategic planning, and 50 percent of leadership teams dedicate little to no time to it”
A map alone is not a plan, however. Affirmatively stated and clearly laid out choices may allow leadership teams to take a tactical series of steps, however, they must be consistent with a broader, longer-term vision and set of objectives.
Adaptive directions achieve diverse goals.
What purpose does a flexible, succinct, well-designed strategic plan serve for a small or family-run business? To be clear, we are not talking about large, multinational corporations with stockholders, international boards, and billions in market capitalization. We are talking about local, independent, boutique, family-owned, owner-operator businesses that drive approximately 44% of the U.S. economy (per the Small Business Administration). And for these businesses, a sharp, well-designed strategic plan can serve three main purposes: (1) drive top line growth, (2) increase the bottom line, and (3) give you (business leader) back more time.
Top line growth. Having a business plan can increase your chances of growth by ~33% according to a comprehensive study on the effects of business planning on performance (Journal of Management Studies). Sales, clients, revenue - imagine making decisions that have a tailwind of over 30%? Simply by having a plan, overall top-line growth is far more probable. Who would say no to increasing their chances of growth by 30%?
Bottom line growth. 50 years ago, a group of Harvard professors completed a significant research project linking strategic planning to profit performance (Harvard Business Review). They found 37 factors, all of which can be incorporated into a strategic plan, that accounted for more than 80% of profit variation across the 600 businesses they studied. Factors such as resource allocation, risk management, and the consideration of new ideas - they all matter. Building short- and long-term plans considering these factors tend to (a) increase strategic clarity and (b) provide for sustainable, predictable, and profitable growth.
“Having a business plan can increase your chances of growth by over 30%”
Giving you back your time. According to McKinsey, plenty of research suggests that many CEOs are beset by loneliness, frustration, disappointment, irritation, and exhaustion. Additionally, according to a Harvard Business Review survey, CEOs reported spending only about 3% of their time on strategic thinking, while they believed they should be spending at least 50% of their time on this activity. What causality can be inferred between (a) feeling frustrated and burnt out, and (b) spending barely any time on strategic planning? The most precious resource a CEO can have, past human and investment capital, is time. Strategic planning, even the smallest amount, can incrementally and perhaps significantly give you back your time.
Simple tools often provide the best results.
Approximately 70% of businesses that survive for more than five years follow a strategic business plan, according to Forbes. This plan can start simple and evolve over time - in fact, it should. Concise, aligned, and adaptable plans will allow you and your business the freedom and flexibility to operate, while giving you an important sense of direction and collective purpose.
Here are three easy-to-implement tactical actions that you can take today in order to begin, or strengthen, your strategic planning process:
Create a short, two-page version of a strategic plan that you can share with key teammates and trusted advisors. It can be bucketed into four, broad categories: (A) vision/mission, (B) goals/objectives, (C) strategy/approach, and (D) tactical actions. This allows your thinking to be organized across key strategic areas and provides entry points for input, feedback, and buy-in from stakeholders, a key part in the strategic planning process.
Include culture, operating principles, onboarding initiatives, and client communication in the plan. The strategic plans that use stuffy, technical business terms end up on the shelf, unopened, and unused. Build into the plan language that resonates with the executive suite, loyal teammates, and newcomers. This will allow each person to see themselves in the plan, increasing the likelihood the strategy will be utilized. The only thing worse than no strategy is spending time on one that doesn’t get used.
Schedule quarterly (if not monthly) strategy sessions to refresh and reinvigorate the plan. Consider this as a study session or reminder alongside your top team and leaders, or your broader set of employees, should you choose. Consider the airplane pilot who adjusts to turbulence within their flight plan, or a ship captain who changes course due to pirates; you can - and should - do this for your business as well.
“Start simple and evolve over time - concise, aligned, and adaptable plans will allow you and your business the freedom and flexibility to operate, while giving you an important sense of direction”
According to Statista, Mapquest has a 10% marketshare today, while Google Maps dominates the GPS navigation tool market at 72%, followed by Waze (12%) and Apple Maps (11%). Once upon a time, we couldn’t leave home for a a trip without printed, Mapquest directions. However, times have changed from interpreting standalone maps and getting from point A to B via printed directions. We require adaptive, adjustable directions to guide us on your journey, offering feedback (e.g., traffic analysis) and opportunity (e.g., highly rated coffee shop) along the way.
Our businesses are no different, and need a similar strategic approach and adaptive planning. Our strategic plans can be simple in structure, aligned to people and culture, and adaptable over time. If we have such a guide, history shows us that significant top and bottom line growth is possible, and additional time and capacity can be created. This is the opportunity in front of us - we just need a tool to help us navigate the road ahead.
“We require adaptive, adjustable directions to guide us on your journey, offering feedback and opportunity along the way.”
