How do company owners and managers plan for the future when the future is already upon them? Strategic planning can seem almost quaint when you're in quarter-to-quarter survival mode, just trying to stay ahead of the competition and keep on top of rapidly evolving technology. As e-business becomes woven into the fabric of business, technological strategic planning becomes crucial to achieving the overall company mission.
Before you can determine where you're going, you must first understand where you are - as an organization - today. MIT economist and researcher David Birch found that companies exist in plateaus. Between the plateaus are chasms - those perilous places where companies languish or perish because they don't scale to the next level. To progress to the next plateau, companies must solve key technology challenges, address operational or management issues, and focus on new financial indicators. The table on the next page shows a breakdown of typical issues faced by companies at different stages of development:
SIZE | % OF COMPANIES IN US | TECHNICAL CHALLENGE | OPERATIONAL NOTE | KEY INDICATOR OF COMPANY PERFORMANCE |
---|---|---|---|---|
1-3 employees | 96% | Phone systems | You need more office space. | Revenue |
8–12 employ ees | < 4% | Accounting system | Founder must learn to trust a management team and make transition to CEO. | Cash |
40–70 employees | .4% | System integration | Competition begins to notice you. | Gross margin |
$40-70M+ | Execution is handled by others. | Profit on quarterly basis |