As the year draws to an end it is an opportune time to take stock of one’s enterprise no matter how small, and strategise for growth in the following year.
Growth-oriented companies must introspect and analyse how well, if at all, they are positioned for improvement and achieving set goals.
Such an intentional action will improve the future performance, stress test departments and processes and issues arising inform the optimal implementation of proposed strategy.
The McKinsey 7s model is useful to ensure all internal aspects are checked, it speaks to the seven areas in an organisation to review and align for success.
This model, in keeping with its name, comprises seven interdependent elements all starting with the letter “s” that are split into hard and soft elements and are a sort of checklist handy for focusing on core areas in company.
The hard elements include strategy, structure and systems, while the soft elements are shared values, skills, staff and style.
When properly aligned, these seven aspects guarantee “an eighth s” which is success. Here are the seven in some detail and some reflections you can make under each as the years winds down.
Strategy speaks to the overall purpose of a business and the way it will enhance its competitive advantage. As the saying goes, if you aim at nothing, you are sure to hit it.
Every enterprise exists in a market where competition in present and entrepreneurs are everywhere. To survive there must be robust value proposition and a unique selling point.
Efficiency and effectiveness are priceless, and how they are to be achieved matters — that is strategy. A winning strategy naturally seeks to minimise costs, maximise revenue, serve a specific profitable clientele through their preferred channels and work with the right partners whilst involving yourself in only the key activities that ensure you deliver quality goods and services.
Resources must be channelled in the direction of the strategy; this is more than some team workshops in a resort town with a consultant, but a detailed action plan cascading from top to bottom.
Structure therefore becomes yet another important element to consider, how activities are divided within the company, but also how they are interrelated and co-ordinated for a common purpose.
The successful enterprise must be accordingly organised, with clear departments that have clear roles and understanding of their contribution to the overall strategy and pull their weight.
It is necessary to annually review the company structure to ensure it matches strategic intent and enables the business model to be economic.
Systems would then come into play, the formal procedures for measurement, reward and resource allocation.
Though they are largely intangible, systems matter for these are the written down guides for day-to-day operations and the proverbial reference point when people say, “do it by the book” enabling everyone to sing from the same hymn book.
A thriving company at whatever level must have operations procedures for every aspect including human resources, finance, production, sales and marketing, purchasing, information technology and so on.
They must speak to each other and be consistently reviewed in light of the disruptive nature of the world especially on technology, as well as external changes in the operating environment.
Shared values are the first of the soft elements. Again, these must be deliberately crafted with representation from across the board in a company, to avoid the values being ascribed ownership to “those at the top”.
Sadly, values can easily become just words in a frame in the offices and on the company website, when the ideal thing is for them to infuse the very work of staff and be lived.
Deliberate action must be taken to ensure they remain at the fore, simple weekly competitions, for example; and consistently seeking customer feedback through monthly evaluations helps.
Every few years, it is worth revisiting the values and ensuring they still remain relevant to the business.
Skills are a soft element that speaks to the organisation’s core competencies and distinctive capabilities. These can be built up in staff over time and can by themselves bring strong competitive advantage.
It is quite unfortunate that when budgets are lean, investment in skills, both technical and soft skills is the first to be slashed or completely eradicated from a budget.
This is a myopic action that actually negatively impacts the ability for a company to deliver. A business that takes profitability seriously must demonstrate it by continuous learning because they world is extremely dynamic and it is easy to become obsolete and irrelevant.
Skills are not obtained overseas only. There are many competent local organisations and individual consultants that can impart credible skills to staff, and then other external exposure visits and training can be done for critical areas of production.
In the age of the internet, and the advent of MOOCs (massive open online courses), so much can be done remotely and online on the smallest of budgets.
Staff are a major resource in every business; most businesses are only as good as the quality of staff that are responsible for managing the firm, production and delivery to customers.
An organisation’s human resources, demographic, educational and attitudinal characteristics directly impact the bottom line. The selection, attraction and retention of staff is an important aspect of business success as they bring in individual skill, experience and exposure that improves the whole.
To continue as a going concern, people matters must be taken seriously and many times it is small things that are most appreciated by staff, not just money but acceptable working conditions, a healthy office environment, in house training for all and rewards for performance.
Workers in any company spend most of their time at work anyway and this place must be free of stress and toxicity and company owners do well to ensure staff directly benefit from the business performance as stockholders.
Finally, the style in a business matters. Company culture is built by the typical behaviour patterns of key groups, such as managers, and other professionals within it, as well as those with direct customer interface.
Businesses have to be intentional with how they are perceived as a brand. This is the age to be customer-centric and appreciate that your users or customers are indeed king.
With the past few years of economic hardships, this is an area that requires strong work for most businesses. The culture of whatever goes must die and business must return to the old school professional approach, internally and externally.
Take time this holiday season to review these seven elements in your own business. Note down points for action to improve your standing and ensure the elements are congruent.
Continuous improvement through holistic strategic planning like this will ensure you build an enterprise that grows beyond your lifetime.
Let’s close the year next week by looking into the profile of a winning small business owner.
Happy holidays to you all!
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