Well-managed businesses generally thrive in poor and healthy economies alike. Such visionary organizations have a tendency to change gears in accordance with market demand. They invest in capacity-building in growth industries and grab technological advantages. They invest in, and continue developing, strong human capital, which can lower turnover and ensure smoother management successions without a blip in leadership.
But all these reasons – and many more – hark back to one key concept: strategic planning. Companies which have integrated the discipline into their cultures fare better than those which don’t, surveys have shown again and again. Yet fewer than 20 percent of the Fortune 100 companies’ CEOs say they have a strong planning component in their organization. My own understanding of its importance came through personal experience as a communications executive at the parent company of Kentucky Fried Chicken Corp. I’ve been tracking, using and studying the need for strategic planning ever since.
In one sense, the economic meltdowns of 2007 and 2008 can be viewed as failures of strategic planning – failure to monitor the external environment in an aggressive and competitive fashion; failure to adapt to changes in the national and global economies; failure to seize opportunities to dominate emerging markets and shrug off losing lines of business quickly enough.
Even the large public corporations with global lines of business have been affected by the current credit crunch and ensuing bear market — and they, presumably, can afford to hire the costly experts or in-house staff who could have prevented such selective vision. What, then, of the cohort generally known to business academics as small- to medium-sized enterprises, or SMEs? How could they manage — even after the fact, to survive and prosper — in a world where the doors of car dealerships, big-box retailers and investment and community banks alike are slamming shut on a daily basis?
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