Strategy

Strengths, weaknesses, opportunities, risks

The SWOT analysis is old and still useful if it is filled in honestly. The most common mistake: writing down strengths that every competitor has as well. “Reliable and on time” is not a strength, it is the expectation.

Surroundings

What acts on the company from outside: regulations, prices, skilled staff, customer behaviour, technology. In the textbooks this is called PESTEL. For a trades business two of these fields usually decide the matter — the others can be left out.

Competition

How easily new providers get into your market, how strong your suppliers are, how easily your customers switch. The model behind this is Porter's five forces.

Customers and contribution margin

Which customer group brings which contribution margin (Deckungsbeitrag). Very often a small group carries the profit and a large one eats the time. That changes a strategy faster than any analysis of the market.

The business model on one page

Who the customers are, what they get, how the money comes in and where it goes out. As a tool this is known as the Business Model Canvas. For an existing company it is above all a test of whether everyone in the house gives the same answer.

From goal to figure

“We want to grow” becomes “by the end of the year, two out of ten enquiries come from the web instead of from a referral”. Only then can you check whether it worked.

Balanced Scorecard

Goals spread across four views: money, customers, processes, staff. The thought behind it is right — measuring turnover alone makes you blind. The full version with twenty figures is unusable in a company of twenty people, though.

OKR

Four to five goals per quarter, each with two or three measurable results, all of them visible to everyone. Suits companies that are growing fast, and does not suit companies where nobody has time for quarterly rounds.

The three numbers

What we recommend most often: three numbers on one sheet every Monday. Capacity utilisation, contribution margin on the jobs in progress, open enquiries. No company keeps up more than that, and less is not enough.

Unfreeze, change, refreeze

Lewin's model in three steps: first it has to be clear why something is changing, then it is changed, and then the new way has to become habit. The third step is almost always forgotten — which is why, after four months, the old notes are back on the table.

Kotter's eight steps

Show urgency, find allies, put the goal into words, talk about it, clear obstacles out of the way, make quick wins visible, do not celebrate too early, anchor it. You do not have to know the list by heart. You only have to know that the quick visible win is the point at which most projects are won or lost.

Resistance is information

When a foreman drags his feet, he usually has a reason nobody has asked him about. We ask him. Three times the reason was good enough to change the plan.

A pilot instead of a switchover

One crew, one machine, one month. What fails there fails cheaply.

Who tells the staff

Not the consultant. The owner. A change explained by someone from outside counts as a matter from outside.

Collecting the risks

Loss of people, machines, suppliers, software; bad debt; regulations; weather; a customer who accounts for a third of turnover. Written down, not kept in someone's head.

Assessing them

Probability of occurrence times amount of damage, in euros and roughly estimated. Rough is enough: this is about the order, not about decimal places. The usual way of showing it is a matrix with four fields.

Four answers

A risk can be avoided, reduced, transferred — to an insurer or by contract — or carried knowingly. The word “knowingly” is the difference from the present state.

The one man who knows everything

The most common uncovered risk in companies of this size. The remedies are unspectacular: write down what he carries in his head, train a second person, document the access details.

Emergency plan

One page: what do we do if the server is down, if the hall burns, if bookkeeping is out of action. Who calls whom, in what order. The standard for this is called ISO 31000; the one page matters more than the standard.

Who is responsible for what

For every important process: who does it, who decides, who has to be asked, who has to be informed. The short form is called RACI and fits on one page. In most companies it turns up at least one task that nobody feels responsible for.

What people have to be able to do

An overview of who can handle which machine, which software, which task. Shows straight away where exactly one person is the bottleneck.

Induction

A plan for the first two weeks, so new people are not left standing around. Saves more money than it costs — the most common cause of scrap from new people is an instruction session that never took place.

Succession and knowledge

Who retires in five years, what does that person know, and where is it written down. In family businesses this is the most uncomfortable and the most important question.

Staffing needs

The order book and capacity utilisation show how many people are needed and when. Anyone who starts looking only once the work is there looks for half a year.

The methods on this page come from business administration and are written for companies of every size. In a company of fifteen people, most of them are ballast.

• What almost always works: the question of responsibility, the risk of the one person, three figures on one sheet, a pilot instead of a switchover.
• What rarely works: complete Balanced Scorecards, quarterly rounds with presentations, strategy papers of more than twenty pages.
• What we make of it: an order of work with dates and names. Not a paper that sits on a shelf.

If we come to the conclusion that your company does not need strategy work but three weeks of tidying up its processes, we say so. It is the more frequent answer.