HOW STRATEGIC THINKING WORKS
How does strategic thinking work and how does it affect your business? I will set about answering this question just yet. Every business organization needs to build their capacity to think strategically. This is an important aspect of planning and developing small businesses into big ones.
The 3 key questions to start with…
What to do is ask the three basic question of Why? How? what? I know that this may not be the usual order in which we process things. We usually ask what do you want to do? Then we figure out how best to do it and may never understand why we do what we do. But in strategic thinking, we want to know why you want to start a business. The right answer should be because you have identified a gap or a need in a society where people are willing to pay for products and services.
You want to be sure of this so you don’t start a business that fails before it begins. If you know why you have to provide a certain service or product, then you know who needs them. Then you figure out how best to supply them. All these you consider before you think of what exactly you should produce. These you must consider in terms of environment and public policies.
Consider this story…
An entrepreneur discovers that people in a locality are change car tires very often because of bad roads. He runs to his bank and takes a loan. Then starts a tire shop in the town. Everything starts excellently well for six months, then the government fixed the roads. Six months later, the man was forced to close shop having barely paid off his loan. His business failed because he did not realize that limited numbers of persons own cars, most of them bought new tires when the option of repairs had been exhausted and that the government had earmarked the roads for construction.
Now compare with the following story…
In another example we see an entrepreneur who observed that childbearing mothers in a town looked malnourished. On further inquiry, she learnt that the women were lean because they practiced exclusive breastfeeding for up to a year to avoid buying expensive baby formula. Babies and childbearing mothers make up 45 per cent of the whole population, so she knows that the market is large. The thing to do was to source local materials to develop affordable baby formula as well as very cheap rejuvenation formula for breastfeeding mothers. She used her limited resources to start production and supplies within her village. Soon she got the right approvals from relevant authorities and let a friend invest in the business. Six months later she is distributing throughout the city with demands from neighboring cities.
Strategic thinking is a bit painstaking but it takes your business from where you are to where you want to be. Strategic thinking applies to other facets of life as it does to business. It will take some practice and a little coaching to get is right. I hope to further break strategic thinking down and expose you to some tools that will help you grow your business.by : Michael Ukwuma