Great at Firefighting?
Great at firefighting, miserable at long term planning; unfortunately, this describes many small- and midsized manufacturers in the region.
Even with our tremendous talent pool, proximity to major markets, and established industry base, businesses here in Southeastern Pennsylvania often struggle to get out of their reactive mode. But is it possible to get beyond this malformed mantra for business as usual?
DVIRC’s main funding source, the National Institute of Standards and Technology, Manufacturing Extension Partnership has looked at this issue head on, exploring everyday realities across the country and here at home.
After completing a nationwide survey, the MEP reported that as few as 2 in 10 leaders of small- and midsized manufacturing businesses actually have strategic plans. Anecdotal local evidence supports this finding and suggests that businesses that develop and implement strategic plans clearly outperform those that don’t.
The old saying that “people don’t plan to fail, they just fail to plan” is practically a cliché. The thing about clichés, though, is that they often spring from truth. Yet we seldom look at why so many manufacturing companies in and around Philadelphia avoid planning the future.
Sure, it’s easy to argue that running a business doesn’t leave much time for strategizing. But if you don’t set goals, analyze your strengths and weakness, and create a plan for achieving your objectives, you risk never achieving them. Sun Tzu went so far to say that “strategy without tactics is the slowest route to victory; tactics without strategy is the noise before defeat.”
Every day, all around us, people are busy making plans. We plan for retirement, summer vacations, even lunch dates. But when it comes down to planning for the longevity and sustenance of what could be a business owner’s largest investment, too many planning efforts fall short.
Sooner or later every business and industry goes through a bumpy patch. The truest test of an organization will be its level of readiness to handle such adversity. Small to midsized manufacturers here in Southeastern Pennsylvania face a series of increasingly complex and ever-broadening market challenges. As competitive forces evolve and intensify, so must their strategies for growth.
According to Machiavelli, “The one who adapts his policy to the times prospers, and likewise…the one whose policy clashes with the demands of the times does not.” DVIRC wants every manufacturer in the region to adapt their policies to address competitive shifts. We’re confident the result of this focus, accountability, and strategic planning will be this very same prosperity.
Whether a business owner is looking to fortify their business for the future, increase income, plan for expansion, or prepare for retirement, a strategic plan is essential.
Getting started can be as simple as aligning resources around a common goal, and this summer is an excellent time to kick off a strategic planning effort. Gather the key players, put down the fire extinguishers, and put on your planning hats. You can begin by marshaling your collective efforts to systematically set the company direction and develop and implement an actionable plan to achieve organizational goals and drive operating income. These Key Performance Indicators (KPIs) could include achieving growth through new customers, new markets, and new products; or operationally by improving productivity, quality and talent development.
Once you’ve established some momentum, schedule these sessions at four- to six-week intervals. This will allow stakeholders to review progress and respond accordingly. Over time, you will likely see a routine develop, and the business will migrate toward what works and shift away from what doesn’t. And if done properly, in no time at all your business will shift from a reactive mindset to a proactive, sustainable growth focus.
Right here in Southeastern Pennsylvania, DVIRC has seen dozens of manufacturing clients outperform their resource constraints, improve their operating margins, and grow top line revenue as a direct result of developing a comprehensive business strategy. Contact us today to learn how we can help you take the all-important first steps.