Business Improvement Series: Strategy 3 - Define your vision
Whether you are a sole trader or a listed company it’s very important you have a clear sense of the ultimate vision and objective of your business. Why does it exist? What function does it perform in society? Why do customers/clients believe in your business? What are the long term outcomes/results? Visions are intended to clarify the pathway forward, after all, if you don’t know where you are going, any road will get you there.
Through our Business Improvement Series we’ve outlined key strategies to take your business to the next level. In Strategy 1 we explored the ramifications a short term focus can have on your business. During Strategy 2 we explored the importance of long term focus for clarity to achieve optimal results, let’s now take a deeper look at why defining your business vision and objective is paramount.
So why is it important to work out the big picture first? As an example think of a high end retail business with very good margins, targeting wealthy clients with high quality products. As a cost cutting measure they looked at how much rent they were paying and decided to relocate to an out of the way location in a poor quality building with an inferior fit out. What would their clients think of this relocation? Would they still be willing to pay the same pricing?
Alternatively let’s look at a large discount store with a range of products sold in high volumes at low margins. The business prides itself on having new and interesting products all the time. As a cost cutting measure this business looked at halving the number of staff in the team responsible for sourcing new products. How would the regular customers expecting the regular flow of new and exciting products react to this? Would they stop visiting the store?
These are two extreme examples that are very obvious when read. However, the point being made is that it is very important to be very clear on the objective or vision of the business. Being clear will ensure that any changes/ideas can be quickly assessed to see if they are consistent with the objective of the business thereby supporting the long term success of the business. Furthermore, improvement strategies or ideas can be more easily prioritised when measured against the vision.
The value a business will take from getting clarity of vision includes:
Your employees know why your company exists. When your employees understand the purpose of your company and why you started in the first place, it’s easy for them to opt in or out. Those who opt in become valuable employees and those who opt out shouldn’t have been there in the first place. A clear vision helps you communicate with your customers. If you aren’t a ‘me too’ business then a vision will pin point what it is that makes you the perfect choice for your customer / client, what you need to do and keep doing to retain them and attract more.
Having a clear ‘why’ results in better outcomes. If your employees know why their role/job/task is important and can connect to a tangible reason, the business vision, they are far more likely come up with good ideas for improvement.
Once the vision is clear it is time to define the goals that if achieved will result in the business achieving the vision.
Hanrick Curran has many years of experience supporting SME business owners to improve their business performance. If you would like to review how your business is currently performing and discuss strategies that can have a significant impact on your business please do our online business improvement assessment, speak with your usual Hanrick Curran advisor, or alternatively call Robert Pitt on 07 3218 3900.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.