SMEs getting their strategy right

SMEs getting their strategy right 1280 853 Minerva Lifelong Learning
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In this blog, I explore examples of West Country SMEs who have developed a successful business strategy and discuss the cost of not doing anything.

So far in the series, we’ve explored the importance of creating an innovative business strategy, and discussed how you can start to do this. There is a danger that, as an SME business leader, you read the previous blogs and think that this is great if you are running an international or global brand, and fall into the trap of ‘this isn’t relevant for my organisation’ or ‘doing things as they have always been done’.

Perhaps McKinsey & Co’s methodology for developing a business strategy discussed in last week’s blog feels like fanciful thinking? To help to put the theory into context, I have a couple of examples of West Country companies. 

A simple example is a garden centre in my hometown of Trowbridge. At the start of lock-down, as you know, all shops, from small village shops to national chains, were unable to sell in the usual way. My small local garden centre refused to take no for an answer. Prior to the lockdown, they had no online sales capability, so they created a simple online order form for people to state what they needed. Without knowing what their supply chain would be like, they offered local delivery but didn’t say when the orders would be delivered or at what price. The only promise was to charge a fair price and to deliver as soon as they could. Thanks to their swift adaption to the uncertainty, they are busier than ever before – they instinctively and unconsciously developed a new strategy using McKinsey’s four strategic lenses. 

Another case study comes from Holleys Fine Foods. Established in 1970, Holleys Fine Foods is one of the region’s leading distributors of ambient speciality foods.

The Problem

When lockdown was announced in March, Holley’s ability to deliver quality produce safely to retailers saw sales increase significantly. The increased demand created new challenges for the already expanding business. 

The Solution

Timewade worked with Holleys to fast-track the development of an enhanced warehouse management system which sped up the team’s picking capacity and improved the efficiencies of deliveries and stock management to ensure orders were fulfilled.

Together with Holleys the existing ‘picking’ process was analysed to understand how quickly and efficiently staff picked, packed and loaded the customer orders into vans for delivery. The average pick time per item, coupled with the time to load the vans was not fast enough to meet the increased demand. 

By working with Holleys and the Software vendor Sicon, Timewade were able to deliver an enhanced ‘pick’, ‘pack’ and ‘load’ process to deliver a process driven solution to enhance the warehouse management system and drastically reduce the average pick time per item to fulfil additional orders.

In this example, Holleys consciously assessed whether they could deliver and used technology to change their operations when they discovered that they couldn’t. Essentially, they used a variation of McKinsey’s Operating Lens model and focussed on the opportunity and value of what they were doing, not the cost.

I do recognise that working through a methodology to create a strategy, such as the McKinsey’s methodology (explained in blog 2), is a complex and sometimes a time-consuming process. Often, daily challenges get in the way. However, it is worth investing in and getting it right. 

Global brand Intel recently got it horribly wrong – it delayed its move to a 7nm fabrication process (i.e. chip transistors on processors get even more insanely small), and it’s share price dropped by over 6% overnight. This crash happened despite their highly effective daily operations that delivered close to 25% net profits with no drop in sales at the height of the COVID crisis – an absolutely crazy achievement. Despite that level of operational excellence, they were blind to their readiness to move to a new manufacturing process. 

The moral of the story, from a corporate governance titan to the small independent garden centre is that whatever the size of your business; adaptable, ambitious and strategic thinking, supported by honest and transparent facts is key to business survival and success today.

These are challenging times, and we all hope for everything to ‘get back to normal’ as soon as possible so that we all the anxiety, fear, suffering and tragedy of the COVID-19 pandemic behind us. That day will come, but the world afterwards will not be the same as it was. This is because no-one can predict what the new world will look like. 

The global Pulse Report from Oxford Economics and AMEX in 2017 stated that SMEs possess intrinsic advantages due to their scale. Their agility plays a major role in helping them to quickly adapt to shifting trends across the gamut of business operations, from innovating through to the deployment of technology. Additionally, and perhaps most importantly, to make the time available to focus on the recruitment and retention of talent. 

So, I can guarantee that businesses with a strategy that is adaptable and ambitious, underpinned by an objective methodology and skilled people, will be the successful ones.

Here are the key take-aways on how strategy, not the pandemic, can change your business:

  • Being flexible and adaptable is essential to business survival for the foreseeable future 
  • Strategy and planning remain vital. However, they must allow for rapid adaptation 
  • Have a strategy and a methodology that is objective, methodical and diligent. Seek help if you don’t have the ability to develop and implement a strategy 
  • Business leaders shouldn’t do this in a vacuum. Work transparently and honestly with your company, team and peers, then they will support your changes and you. 

Ambition, it will change your world – feed it through a brilliant business strategy and skilled people.

Thank you for reading my blog. Please do get in touch if you have a comment or share it on LinkedIn.

Catch-up on the other blogs in the series here.

About the author

Minerva Lifelong Learning

Short, simple and interactive learning programmes which provide adaptive, future skills for business leaders and SMEs with effective and enduring outcomes.

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