By: William Kraut on October 8th, 2012

Take Time to Think Strategically

For many emerging growth company CEOs, immersed in daily crises, thinking strategically is often not a natural act.

Much of most CEOs’ time is spent jumping in to fix burning issues, often customer service issues, for example problems between sales and operations in fulfilling orders to customers.

Asking the Basic Questions

To plan and execute a course of action to get out of No Man’s Land, the CEO must find time to address such basic questions as:

What is our value proposition for the customer?
If customer needs have changed, how do our products and services need to change?
Can all our employees especially our sales force articulate why customers buy from our company?
Do we understand the processes and cost to acquire a new customer well enough to teach our sales force?
How are we dealing with the risk that our products are becoming commoditized?
Are our sales efforts focused on the company’s fastest growing and most profitable customer segments?

Most CEOs’ don’t have operating people under them with the ability to rise above the day-to-day to shine a “Strategic Thought Spotlight” on issues like these. If the CEO doesn’t take time to raise them it’s likely that no one will.

Decisions=Strategy

Making strategic decisions—such as deciding what promises to extend to which customers--is strategic planning in its essence. It could even be decisive for your company’s survival. What iStock 000011802525XSmall1 opportunities are you “never seeing” because you did not take the time to think strategically?

Consider a historical example. What if railroads (one of the best capitalized industries in its heyday) had defined their value proposition as “reliable goods distribution” with an emphasis on the customer perspective? They might have expanded into (or acquired) trucking operations or distribution center operations, leading to a very different railroad industry than we have today.

CEOs Think Strategy Is Esoteric

Too many CEO’s have a blind spot when it comes to strategy. Most would recognize the important role that strategy plays in sports, politics or business in general. But when it comes to their own business they think of strategy as something esoteric they don’t have time for. They are busy keeping things going. They are too busy handling problems to step back and analyze the causes of the problems that are consuming them. Outside investors, if there are any, may not be asking the right questions.

Many CEOs have a vision—but not a strategic plan to get there, or a realistic idea of how fast the world is changing. The customer value proposition that worked yesterday may not work next month.

Missing the Big Picture

The risk of not stepping back to look at the business is especially great when the course of the business shifts. A CEO who is immersed in the day –to-day may not realize that the company is no longer making a profit. I have seen CEOs who didn’t have the ability to look down the road and missed the signs that they were getting caught in a liquidity trap. They wound up going to a bank or other funding sources too late.

Daily Decisions ARE Strategy

CEOs must realize that daily decisions such as what to promise to customers are the essence of strategy. A decision, for example to change operations because a customer wants a new product, is a strategic decision. It should be based on an understanding of how profitable the customer is or how profitable are the products being sold. Without this knowledge, many CEOs will continue to bend over backwards even for customers that are unprofitable. Or they may not recognize how they can cut price for those customers that require fewer services and thereby less indirect costs.

Strategy Must Be an Everyday Activity

For emerging growth companies, strategy is an everyday activity. It involves understanding and fixing the underlying causes of operating problems. No matter how time-strapped a CEO is, he or she needs to find time to make strategy part of their daily routine.