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Do SME’s need to PLAN

A lot has been written about strategy development for SME’s. Yet a review of the literature suggests that there is no single view of a preferred approach or the success of a particular method. Abosede, Obasan & Alese1 probably best sum up the situation in their recent article, even from their developing world perspective:

“Earlier studies have established the importance of strategic management in the development of large corporations while few works have explored the possibility of using strategic management to help develop the critical sector of the economy, Small and Medium Scale Enterprises (SMEs). Where studies are done in this area, they are carried out in the developed economies and little or sparse studies have focused on the developing economies with attendant limitations in scope and methodology. Two divergent strands are noticeable: the first is the Ad Hoc planning, which believes that planning does not need to be structured, regular, comprehensive and constantly reviewed before SMEs development is enhanced, while the strategic planning strand emphasized consistent and formal SWOT analysis as a blue print for SMEs survival and development. This divergence therefore calls for further studies on how strategic management should feature in the development of SMEs.”

In the developed world it’s likely no different – we two camps: Ad Hoc and structured strategic planning. Without opening up a debate on the rights or wrongs of each approach and what works better, I write to suggest that it doesn’t matter provided a SME has some kind of roadmap and objectives. The old chestnut “if you fail to plan, you plan to fail” still holds, however what constitutes too little or too much planning is very different for each enterprise.

What then are the implications for the horde of management consultants out there who are engaging with their SME Clients? I would suggest that a “one size fits all” approach won’t work. A contingency approach is necessary, based on the understanding, sophistication, size and complexity of the enterprise. A coffee shop chain may well require a different approach to a small hi tech manufacturer, to an online travel portal, to a trade based business.  

At last count I’ve personally come across 21 distinct strategic planning systems, and while I have preferences I adapt my approach and guidance for my Clients based on a checklist of their situation. So I humbly suggest that your preferred planning system may not be appropriate for all of your Clients.

Lastly, always remember that planning within SME’s is critically time bound. A SME business owner or GM will almost always have less time to work with you than you’d like or believe necessary, so again, an agile and simple planning approach is required, with lots of listening and learning, and a high degree of patience.

Good luck with it.

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Posted on May 16, 2017

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