Clarity of thinking is the key to SME success

SMEs are the powerhouse of the UK economy. There are over five million SMEs (defined as businesses with fewer than 250 employees) but amazingly only around 8,000 bigger businesses. Many SMEs continue to thrive in the current climate. But this sector traditionally has always faced high failure rates, even before the pandemic. Now all eyes are on what can be done to support SMEs to help them succeed in these extremely challenging times.

We can all empathise with those SMEs who are working all hours to survive in these tough times. These are hard-working, committed business owners, who put massive effort into chasing different possibilities to keep the show on the road to meet the payroll, pay the rent etc.

However, with these pressures in play, it is easy to get stuck in the groove of short term tactical thinking and lose sight of the bigger picture. Unfortunately doing the basics and hard work is a necessary, but not sufficient, condition of business success.

When in survival mode, business owners can get anxious and stressed. In this state of mind it is difficult to stand back and apply clear deep thinking. However, it is this quality of thinking that will separate winning strategic entrepreneurs from those who will struggle to survive.

Winning strategic entrepreneurs

A defining characteristic of strategic entrepreneurs is that they are playing to win, they aren’t just in survival mode – playing not to lose.

Strategic entrepreneurs know where to play, how to win and how to get there using the minimum of resources. These are entrepreneurs who know that, in difficult times, it is important to apply clear deep strategic thinking to what they are doing. They know that it is difficult to tactically retrieve a flawed strategic position.

Importantly, strategic entrepreneurs know that they need to work on not just in their business. Each day they start by focusing on what matters most. They take a disciplined approach to thinking. They see clarity of thinking as power. They know that creating elegant solutions will give them a competitive advantage. They also cultivate the growth not fixed mindset and enjoy adapting to change and constantly experiment with new ideas.

The strategic entrepreneur knows that it is down to them to take complete ownership of ensuring their business survives and grows. They may take advantage of some government loans, furlough opportunities and so on. But they know that this cannot go on forever. They know the importance of taking control of the reins and deploying strategic excellence: clear and accurate thinking underpins everything they are doing.

They don’t fall into the trap of thinking that the cavalry will come charging over the hill to save them. In the current recession it is a mistake to become dependent on the government to save businesses. Strategic entrepreneurs pass the advice coming from government through a reality filter. They know that some of the advice will emanate from politicians who don’t have grounded business experience and who are therefore distanced from the harsh realities of what it takes to survive as a business.

The profile of the winning strategic entrepreneur

Let’s look in closer detail at the characteristics of entrepreneurs who have the clarity of thinking and resilience to survive and grow.

Cultivating a strong positive mindset – not getting overwhelmed by the climate of negativity

Strategic entrepreneurs know that they are completely responsible for running their business. They know that if anything goes wrong it is 100% their fault. To stay sane, they don’t dwell excessively on the uncontrollables they can do nothing about. They don’t end up feeling sorry for themselves and blame others or feel that it is someone else’s responsibility. They cultivate a mindset that focuses on what they can improve and enhance. They develop a mental toughness that allows them to apply clear accurate forensic thinking to everything they do.

These entrepreneurs never fall into the trap of becoming glued to the TV for pronouncements from the government in the hope that this will throw up an answer.

Strategic entrepreneurs do not suffer from cognitive miserliness they genuinely enjoy and take time out for clear deep thinking. Strategic entrepreneurs always bring their A Game to the party. They pride themselves on being high energy problem simplifiers and energy radiators. They don’t fall into the trap of being low energy drains and problem confusers. They are always working hard to make their own luck.

They are always on the case and never self-sabotage their efforts. They know that, when it comes to being an entrepreneur, the highs are higher and the lows are lower, but they have got their head around how to manage this. They know it comes with the territory.

Staying focused on the big strategic picture – not getting drawn down into the tactical ‘weeds’

Winning strategic entrepreneurs know the importance of focus. They know that successful entrepreneurs – from Bill Gates to Warren Buffet – tell us that the key to success is the ability to focus relentlessly on what matters most and to cut out everything else. Therefore they focus on being in the right strategic place and are constantly alert to working on what matters most for their business – what moves the success needle.

Strategic entrepreneurs also have the ability to identify any core obstacles and barriers that may get in the way of growth. They are constantly thinking in a big strategic, rather than smaller tactical, way about what it is that drives business success in their sector. They zero in on the big ticket strategic issues that must be fixed to allow success to flow.

They are willing to put in the hard yards but they know that strategic excellence – effortless success – is a more attractive option than a constant uphill battle fighting fires in an attempt to win at the margin.

Taking massive inspired action – not putting everything on hold

Strategic entrepreneurs have ingrained into their mindset the success coach Tony Robbins’ mantra – the key to entrepreneurial success is to take massive determined inspired action. Strategic entrepreneurs will create daily rituals – making a habit of focusing on what matters most and taking action on this every day.

They will be inspired by such stories as the late founder of IKEA apparently asking himself every 15 minutes – ‘Is what I am about to do going to help me achieve my goals and vison in building the IKEA empire?’ This is a bit excessive, but many strategic entrepreneurs will ask this type of question on an hourly basis.

Strategic entrepreneurs know that we are in a different kind of recession. When we come out of this lockdown, there will be opportunities out there for those who have strategically thought through how to position their business for the future.

This will keep them focused on taking inspired action and not just consuming newsfeeds and letting external events shape their day. Strategic entrepreneurs take control of their inbox and don’t let others set their agenda. They protect their time. They avoid energy robbers. They will own each day.

Remaining market and customer obsessed – not retreating into internal business processes

In the current pandemic it is easy for business owners to mentally retreat into small rather than big thinking. It is easy for them to start seeing everything through the inside-out lens of their own little world, rather than laddering up to think big and have an outside-in perspective.

Strategic entrepreneurs know that it essential to remain customer centric. Ultimately they know that everything is right with their business if they have a steady flow of customers coming through the door. They take time out to understand the core fundamental beliefs that are driving customer choice. They know what are the key discriminators in their market.

They have a deep seated understanding of these drivers and are relentless in getting to the heart of what is important to their customers. These entrepreneurs will constantly be asking their customers questions, listening to them and seeing how they can turn this knowledge into a competitive advantage.

This customer centricity means that, unlike many businesses during the pandemic, strategic entrepreneurs don’t lose sight of what being in business is all about and inadvertently becoming their own sales prevention department. They won’t fall into the trap of focusing on their own processes, rather than delivering what is important to customers. They are not going to let any customers slip away through sloppy sales processes and procedures.

Strategic entrepreneurs will regularly check out how their business is perceived by their customers and the outside world. They will check that their website is conveying the brand promise they are making. And they ensure that their answerphone message and other communications convey the energy, enthusiasm, and efficiency they are seeking to portray. 

Through this customer obsession, strategic entrepreneurs will deliver high energy excellence at each customer touchpoint.  

Thinking differently and creatively – not defaulting to how things have always been done

In times of crisis and stress, it is easy to let creativity end up on the back burner – something to get back to later in better times. This is a grave mistake. Going forward, creativity will decide who wins and who loses.

Strategic entrepreneurs embrace new ways of looking at things. So, they are always up for some renegade thinking, not just following the herd. They never fall into the inertia trap: Why change the way we have always done things around here?

Importantly, strategic entrepreneurs don’t see creativity as a rare gift that drifts down from the muse. They see creativity as a very disciplined business. It’s about being able to stand back to look at problems from varying perspectives, frame them in a different way and come up with innovative solutions.

Staying grounded in business reality – not wishful fantasy

Strategic entrepreneurs always ensure that business nous triumphs over ego and make-believe. These entrepreneurs know that running a small company is an emotional business. But they have their head screwed on when it comes to always knowing the critical business numbers. They know that their business is not just about the craft or technical skills they have – how well they do their thing. It is primarily about having total mastery of making sure the business numbers work. They have always got an eye on optimising their business model. Every business is in the business of marketing.

And in the current climate they will seize any free money that is going from government loans, but they won’t let this become bad debt by investing this in frivolous vanity projects driven by their ego. They will use the money sensibly to acquire new customers. They will see it as good debt that can be used to grow the business.

Strategic entrepreneurs know the importance of attempting to create demand through the excellence of their offer and the value they provide, rather than just chasing demand. They are constantly resisting being forced to lower prices and getting trapped in a commodity market. They focus on their value and where possible go for premium pricing.

There is support to encourage clear deep thinking

The good news is that struggling to keep a business afloat need not be a permanent condition. With intelligent consultancy help and coaching SMEs can get their head above the parapet and take their business to the next level.

We know that many small businesses will be frightened off by the consultancy word. This conjures up a picture of an overly expensive formulaic solution that does not touch the world of SMEs. But these days this is not necessarily the case.

And the coaching word may also sound a bit ‘out there’ and ‘touchy-feely’ for hard-nosed business owners. But getting that nudge to move from just getting by to being a strategic entrepreneur can be achieved in a practical no-nonsense way.

Therefore, businesses should be encouraged to take their thinking to the next level by seeking available advice from their local University/Business School, Chamber of Commerce, their sector professional bodies, and also private providers that specialise in the SME sector.

We look forward to SMEs emerging from the lockdown stronger than ever.

I would welcome your views.

You can contact me on [email protected]        

David Smith is a Director of DVL Smith, a business consultancy with a division focusing on supporting SMEs. He holds a PhD in Organisational Psychology.

David is a Certified Management Consultant, a Fellow of the Institute of Consulting, a Fellow of the UK Market Research Society, and a Fellow of the Chartered Institute of Marketing.

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