Creating a market focused business plan is too important to be delegated down the organisation. As McDonald notes, “The top 50 USA corporations lose $50 billion a year through failed strategy implementation, i.e. poor leadership. Without effective leadership, even the most outstanding growth strategies will fail” (Barnes et al., 2015).
So, there is the challenge.
If you truly wish to transform your company into a high performing business then a game changing activity that is critical to shape the destiny of your leadership and your company is to understand where your sales and profits come from, segment your market, build strategies for the segments you choose to compete in then align your operations to deliver the value that customers seek. You then must do that consistently over a period of time.
I first met Malcolm in the mid-1990s and was exposed to the Strategic Marketing Planning (SMP) process which I refer to as MPP – Marketing Planning Process. Impressed by its rigour and robustness I used it successfully in Pilkington, across a family-owned group of companies in many European countries and more recently in my own company, QuoLux, taking it into dozens of small-medium sized enterprises (SME). These are from various sectors operating in different countries facing an array of opportunities and challenges.
Typically, when I walk into them, I find most leaders cannot describe their markets, how those markets work, what position their business has in the market compared to that of their competitors and what market segments are available. If organisations cannot do that, how can they create competitive advantage? How can they generate superior profits (over the long term)?
For the last number of years, my organisation has exclusively worked with SME. Research conducted by Barclays (2014) reveals that one in four small businesses (23%) do not have any strategy in place to support their business growth. Less than half (47%) of the UK’s SME have a formal business plan in place that is written down or recorded, while the remaining 30% have an informal, verbal plan.
These are a frightening set of statistics especially considering SME represent 95% of all companies in the UK and 60% of the country’s turnover. You wouldn’t go on a fortnight holiday without a destination in mind or a map to hand. Why then treat your business with such disregard?
Research on the QuoLux LEAD programme (Barnes et al., 2015) confirms an increase from 53% to 89% of companies having a business plan and an increase from 52% to 86% in understanding the priority and profitability of target markets. The business outcome is an average growth of 27% the year after completing the programme. The assertion, strategic marketing planning works with effective leadership seems to hold some sway.
On LEAD, we encourage businesses to implement an MPP and follow the four phase and 10 stage approach.
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