by Kenneth Rudich
For small businesses, the gap between simply surviving and actually thriving can be difficult to negotiate even when the economic climate is good, let alone when it’s bad. In a faltering economy, the threat of being painted into a corner makes it all the more daunting.
Sheer persistence still remains a key for pulling through hard times, but it alone is seldom enough. Strategy has become the real watchword for the contemporary small business. It must deploy limited resources wisely, with an eye always cast toward improving the relationship between costs and benefits.
Nothing makes this requirement more apparent than a volatile business environment like the one we’re currently in. As University of Wisconsin professor Donald F. Kettl says, “Surviving and thriving in this environment requires organizations that are light on their feet, ones that are able to adapt quickly to changing crosscurrents and to seize new opportunities these challenges create.”
In the end, those with a proven knack for success will be the ones that readily embrace the art, science and practice of constantly sizing up the marketplace in search of strategically sound opportunities.
ongoing strategy development
The need to regularly strategize makes it advisable for the small business to have a formal system in place for gathering relevant business intelligence information – specifically, information that can be turned into actionable knowledge.
To explain this, I must make a distinction between information and knowledge, because they are not one and the same.
Information involves facts or evidence that can be gathered about the conditions that affect a business. You can “know” this information, but that by itself is not really terribly helpful.
Knowledge evolves from the ability to process the information, to put it into context and understand the strategic ramifications of it. Unlike information, knowledge is less tangible. It depends on human awareness, experience and cognition.
Actionable knowledge refers to the strategic response that is decided upon as a result understanding the ramifications of the information.
Good strategy, then, begins with good information.
designing a formal information gathering system
In an age where more information can be gathered more quickly than ever before, it becomes exceedingly important to develop a systematic approach for harnessing the right information. Otherwise a business risks becoming overwhelmed with too much information (or too little relevant information), and that can compromise the potential for converting it into timely, actionable knowledge.
A formal system should focus on making the gathered information useful and usable. It must serve the continuous process of inquiry about conditions that directly affect the business.
Let’s look at a small piece of the bigger picture by using internet marketing as an example. A business can use the internet to monitor the competition, track external forces (business climate conditions and trends), and analyze its own website and customer traffic.
A systematic approach will determine what to collect and keep on a regular and repeatable basis. The objective is to make the information gathering directly relatable to the business strategy decision-making process.
It will address design questions like:
- What specific types of information are desired (both quantitative and qualitative);
- What are the relevant sources for it;
- What analytical tools are available for it;
- How frequently should it be gathered and reviewed;
- How will the multiple sources and types of information be synthesized;
- What kinds of performance measures or metrics should be used?
Such an approach helps to ensure a business will regularly have access to relevant information that can be turned into actionable knowledge.
a relentlessly good business strategy
A relentlessly good business strategy begins with having a reliable flow of good intelligence information. It is important to identify all the relevant sources of information, and then determine the best way to bring it altogether into the strategic decision-making process.
As Albert Einstein once said, “You can’t solve a problem with the same mind that created it.” In the same vein, you can’t keep a business strategy on target by consistently implementing the same one in the face of constantly changing conditions.