When the going gets tough, the tough get going. And the going has been tough for a while for most middle market companies and nonprofit organizations. The ability to identify new openings, re-invent and retool, and seize new opportunities are hallmarks of success. Yet when organizations make decisions reactively, or without a framework of strategy, goals and outcomes to guide those decisions the results can miss the mark. As these two approaches show, the challenge for organizations is to be nimble and flexible enough to identify opportunities and to be disciplined enough to incorporate these opportunities into the larger strategy. It can seem counter intuitive for organizations which are struggling to achieve growth, expand market share or launch a new offering to initially invest more time in thinking and less time in doing. Here are some tools that can be used to guide a strategic approach to growth:
Strategic plan: Every organization should have a 3-year plan that defines strategic direction and makes decisions on allocating resources to pursue this strategy.
Operating Plan: This plan is the organization’s road map for short-term actions and objectives to achieve milestones outlined in the strategic plan.
SWOT Analysis: Management should use this analysis to evaluate the objectives of the plan to see the internal and external factors that will make it easier or harder to achieve the objectives.
Focus Groups: This important tool helps management gather feedback on actions, objectives and direction for the organization.
Experience has shown that eventually markets will cool, competition will increase and innovation will occur and the organization following a thoughtful strategy will be in better shape than the organization which has been chasing the next great thing.
What’s the impact of opportunistic growth on your organization?
An organization can survive, grow and even be considered successful from an opportunistic approach to market. But over time, this approach fails to deliver the strategic, sustainable type of growth that most organizations desire. The best type of growth comes from the deliberate pursuit of business relationships with clients, partners and employees, in a target market with significant opportunity. The opportunistic trap isn’t unique to companies. Many nonprofit organizations fall into this trap as well. Seeing an under-served group, a new source of funding, or a current client identifies some addition work, they can quickly develop a very scattered approach to delivering their mission.
The first step for any organization interested in evaluating their strategy is to look at the last few sales, grants or contracts that were awarded. Did these opportunities come to the organization because of a systematic process of pursuing the things it does well, or is the organization looking at every opportunity as something it could do…maybe. Here are some of the warning signs to look for as you evaluate your organization.
Is your organization asking "what can we do to stay in business?" instead of asking, "What needs exist and how can we uniquely serve those needs?”
Organizations that hope business will happen for them instead of creating a strategy to capture business, often find themselves drifting from prospect to prospect. These organizations are looking for opportunities to stay in business, instead of delivering products/services in a unique, differentiated way. This approach can still result in revenue, but to increase market penetration, and build core competency in a particular area are much more difficult. This approach also makes it challenging to develop an effective, concise marketing message and brand awareness. If your organization is everything to everyone, that makes it difficult to identify opportunities and sell features and benefits. Conducting a classic SWOT (Strengths, Weaknesses, Opportunities and Challenges) analysis can pinpoint whether or not the organization has an opportunistic or systematic approach to growth. After the results of the SWOT have been reviewed and assessed, the organization can leverage the findings to create a vision of the ideal mix of services and clients that will drive strategic direction and outcomes.
Do the activities and offerings of your organization complement your organization purpose and vision?
Most organizations start with an organizational purpose or mission – “We are a low cost provider of...," “We bring innovations to network technology," or “We work to bring financial stability and good health to people in poverty.” These statements of purpose let all constituents understand what an organization is trying to accomplish. In strategically managed organizations, any single offering, product or project can be evaluated and aligned with that overarching statement of organizational purpose. When an organization relies on an opportunistic approach to growth, over time the products and services that the organization delivers begin to drift away from that purpose. It becomes more difficult to determine the type of organization and its purpose by the things it does day-to-day. This doesn’t mean that an organization is forever locked into its initial product/service mix. Conducting some focus groups with key customers, prospects, investors will help the organization determine whether or not a potential activity complements and aligns with the overall direction. If it does, then marketing can develop a message to show this connection. If it doesn’t, the organization needs to decide whether or not to expand the overall organizational purpose or to make the decision to not pursue the offering. The organization can also involve its employees in focus groups around this question. This will help build clarity, align skills and get the team working collaboratively.
Do your constituents understand your business and can they explain why you do what you do?
A growing organization must develop a strategy to make sure that all its constituents understand the organization’s goals, strategy and offerings. Smart organizations spend time discussing and documenting their philosophy and processes around their business and how these offerings exemplify the organization’s work style, values and culture. In an organization that is growing opportunistically this becomes very difficult. If any type of work is considered viable, members of the team have a hard time getting clarity around what the organization does and how that complements the style and culture of the organization. Employees may not be successful in sales, hiring may be difficult because skill sets and capability are not clearly understood. The board may not be able to effectively represent the organization externally. This disconnect is felt not only with current employees, but it makes it hard to hire, form strategic partnerships and retain and grow clients. Spending time in focused meetings with employees or your board to develop goals and strategy and build understanding and consensus is critical to sustain growth and success. Whether the organization hosts a retreat or a series of meetings to focus on these strategic issues, the time will be well spent and will produce results.
