Third Quarter 2009 Strategic Issues for Small Businesses

7 September 2009

In a previous post on strategic issues that my Stage 2 clients planned to address in 2009, I listed the following issues:

Improved sales management

Contingency planning


Opportunity management

Financial management

I recently finished strategy and planning sessions with a number of clients, and I thought it would be interesting to step back and assess the common themes that ran through the various sessions. Here are the themes:

Very tight sales focus. The companies are very focused on driving sales to impact 3Q revenue. They are also trying to understand new sales cycles, so that they can get a more predictable view of their forecasts. And, they are still marketing, but their focus is much more on sales, and low-ROI marketing is getting cut.

Contingency planning. The other side of the “drive revenue now” coin is increasing contingency planning efforts, to ensure that the organization is prepared if the sales cycle continues to be longer and more unpredictable.

Long-range efforts. All of my clients continue to follow through on longer-term innovation and business-evolution efforts – but they are shifting the focus to revenue-generating initiatives, and managing more tightly or even cutting back on initiatives with long paybacks or questionable ROI.

Business integration. I am amazed at the significant amount of collaboration and cross-functional integration that I am seeing in my clients, as their entire organizations focus on driving revenue. In many cases, this is coming with clarifying and improving the associated business processes.

Hiring. My clients are hiring six positions right now – two in marketing/sales, two in engineering and two in general business support.

What would I like my clients to be doing more of, if they weren’t having to spend more time on sales?

Talent management. Stage 2 clients typically do a poor job of holistic, integrated, broad talent management (I expect to do a CEO Briefing on this in the next few months). Some of the more important short-term personnel issues are actually symptomatic of systemic talent management issues, and as companies look to make their staffs as productive as possible, a more strategic approach to talent management would be helpful.

Opportunity management. Although my clients are managing their opportunities more closely than ever, I wish they were spending more time to formally plan and assess the opportunities, because that would enable them to make better business decisions about which will provide adequate ROI, and which should be stopped (a critical question these days).

Socializing. People are so busy and stressed that they are not socializing. This means that cultural goodwill is at risk.

Change Management. Every business I know is undergoing significant changes — even if they’re just to continue with the same customers, markets, and staff that they have. I wish my clients had the time to take a more planned and systematic approach to helping their teams deal with all the change.

With one client, I noted that “stress cracks” are developing, and that observation applies to most of my clients. In fact, I think that concept probably applies to a large number of small businesses. For those that have been immune to the general economic slowdown, they are now experiencing these stress cracks, and this next quarter or two will be critical to having them heal rather than fracture.

On the more positive side of the economic weakness, looking forward to 2010, my clients are anticipating that some competitors may disappear, which will mean that remaining companies should start to pick up more business. In addition, it is likely that the remaining businesses will become even leaner and more productive – which, in my view, is what will lead us through this Great Progression.