Advantages of Strategic Decision Making For a Small Business
Running your own business can be all-consuming. The daily pressures of meeting customer needs, managing cash, supporting staff and 101 other urgent things mean that time for strategic decision making can get squeezed out. However, every so often you should take a step back to consider the long term for your business so you continue to grow profitably. Here we look at the advantages of strategic decision making for SME business owners.
What Does ‘Strategic’ Mean In Business?
It can be an overused business buzzword, but what does strategic actually mean in business? The word strategic is used to describe factors that are of key importance over the long term. Strategy is a plan to achieve these things. So strategic decision making involves seeing the biggest possible picture for your business and making decisions based on what is most significant in the long term.
Helicopter View
Operational demands mean that many SME business owners find it difficult to see beyond the end of the month. If this is a constant state it can lead to a narrow view of their business, seeing it purely from an internal perspective. By contrast, strategic thinking and decision making is very much like viewing your business and the market you operate in from a helicopter. You are removed from the details so you can see how your firm fits into the landscape of the market, competitors, customers, suppliers, technology and other external factors. This is essential to anticipate changes in customer expectations, market trends & innovation and other competitive forces. Strategic thinking and decision making provides space for you to create a vision for your business that takes account of the market. Once your vision is decided you should make it a reality by setting business goals and creating a strategic business plan.
How To Make Strategic Decisions
There are several key ingredients to successful strategic decision making in SMEs:
An external perspective - this is essential because your business does not exist to serve itself. You must have a clear view of how the outside world views your business in comparison to competitors and other industry players. However, this can be difficult for business owners because they are often heavily involved in day-to-day detail within their own firm. Trusted independent experts can add enormous value here.
Reliable data -strategic decision making should be evidence led. Whilst instinct has its place, you should base your decisions on what the data is telling you. Use both internal and external data including market trend analysis to inform your decisions.
The right people - don’t try to make strategic decisions alone. Listen to ideas of other informed individuals and have trusted wisdom challenge your thinking. This can be hard in SMEs so business owners should consider finding a trusted independent business expert to use as a sounding board and to shape strategy with.
Space to think - you need to create the right environment for strategic decision making. This means setting aside a good amount of time where you won’t be interrupted or distracted. A monthly board meeting is an ideal forum for taking a day to review current performance and make strategic decisions about the future. Inviting an independent non-executive director (NED) to join your board can be an excellent way for SME business owners to bring wide experience and an expert external perspective to these discussions.
Secantor is experienced in helping SME business owners with strategic thinking and decision making. Our independence brings a fresh perspective to the executive team and our boardroom structure makes it easy for you to view your business from above each month. Listen to our clients talk about how Secantor has become a faithful friend for their business. Book a call with one of our team to find out how one of our NEDs could help transform your strategic decision making.
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