“If an entrepreneur does not look into the future, then the fate of his business is full of uncertainty,” says Alexander Pankov, an expert in strategic management, consultant, chairman of the board of A.maze.S. He talked about how to learn to think about strategy and plan for the future in conditions where you have to “put out fires” every day. 

The expert offers 12 simple steps that will help you confidently move your business into a better future.

— I specialize in strategy development. And I can say that in the difficult market conditions in which we now live, most companies spend a lot of effort every day to respond to changes and try to keep their business afloat. We concentrate on the moment “here and now” and almost forget that we need to think about the future. And if we don’t do this, uncertainty will simply cover us. That’s why I always tell entrepreneurs: dream about what your business will be like in a couple of years, and then it will be easier for you to find solutions.

“RAM” completely absorbs the future

According to some estimates, small and medium-sized businesses spend only about 5-7 hours a month on strategy and planning for the future. That is, businessmen spend almost all their time “putting out fires,” “flares on the left, flares on the right.” In general, “RAM”. They simply don’t have the opportunity to pause and breathe.

It looks funny when a business owner comes to me and says: “My plans are to grow my business x6. I need to conduct a strategy session, I can allocate 4 hours and $800 for this.”

It turns out that everyone is interested in success, a bright future for the business, but can only devote half a day to ensure it. It doesn't work that way - even if an outside expert can develop checklists or something similar for you. The fact is that the future of business is not one alternative, but a whole set. And each one needs to be driven through yourself and your business. Thanks to these alternatives, we can look at our business model from different angles, evaluate the strategy more broadly - and as a result, select the most effective tools.

What are the reasons that an entrepreneur cannot look into the future of the company two or three years in advance? I have selected eight options for owner behavior, summarizing examples from my experience. Note that in each case there are ironclad arguments not to engage in strategy.

Option 1. Zhdun. Here everything is according to the classics: the owner, having a successful business, managed to get out of operational management and intends to work with strategy. But he sits in his chair and waits for ideas for business development and strategic decisions to appear on their own (of course, this does not happen). And after some time, the owner returns to operational tasks.

Option 2. Who will you go to the future with? This is one of my favorites: “I’m alone at the crossing. Only I understand where to move and how. The company has 100 employees - and all of them are idiots. Not a single normal person."

I suggest such owners go to the mirror and ask themselves: “Who brought these “idiots” together in this company?”

Option 3. Squirrel in a wheel. Leaders of this type usually only object: “What strategy are you talking about? I crawl home late at night and barely make it to bed. And in the morning the same thing begins - a bunch of current problems. When we deal with them, then we’ll think about strategy.” 

Option 4. White sheet. The owner has no idea what to do next: prices have already been reduced to the limit, the margin is minimal. It is not clear how a business can develop.

Option 5. In pursuit of competitors. Such a leader is always in the position of catching up. Competitors are tearing apart the market, and he is desperately pressing on the gas to get closer to them. Why he does this, he doesn’t know. He doesn't want to change anything. And over time it just starts to lag behind. 

Option 6. Donkey Eeyore. Such an owner has the main message: you need to work more! He works hard without any strategy, quickly burns out, and ends up resenting everyone and everything.

Option 7. We put out fires “here and now.” I hear from some leaders: “Standing through the day and holding out through the night is the main thing. And we’ll think about the future someday later.”

Option 8. “The neighbor’s lawn is greener.” Such an owner has a lot of different ideas, but outside of his business. Instead of concentrating on the development of his company, he invests in startups, acquires cryptocurrency, etc., scattering investments. 

And in the end, this can lead to the collapse of your own business, because, relatively speaking, there is only one wallet, but there are too many expense items.

Why do such scenarios appear? There are two fundamental reasons.

• No time allocated for strategy. People start doing business, and they have to quickly learn everything - how to calculate income and expenses, how to control the flow of finances, etc. And so on endlessly, because there are a lot of questions. Meanwhile, work on the company's future is put on hold.

• There are not enough competencies to work with strategy. Developing a strategy requires knowledge, experience, and mastery of tools. And, of course, time! To prepare a business for changes, you must first change the approach to doing business: move away from operational tasks, look for alternatives, choose, listen to others, make decisions, defend your position.

So, let's talk about 12 steps to business transformation:

1. Creation of a company information field. My work with owners always begins with a question about the number of competitors. If they answer me that, let’s say, about 200, then it is clear that such an answer says that the company’s marketing is not very good... Because 200 competitors is a direct path to the cemetery: it is unrealistic to compete with such a huge number of companies, no one has there is not so much strength and resources. 

In my opinion, a realistic figure is 3-4 competitors. Or 5, but that's the ceiling. I always advise: “We keep in sight two companies that we want to get ahead of, don’t forget about two more that are breathing down our backs, we should be wary of them and we need to think about how to protect the business from them.” And we look at the young and daring, who are developing contrary to traditions. 

The main thing is not to get too carried away with competition.

Crazy businessmen can appear in any market and radically change the entire situation. In order to remain in this field in the future, we need to look at who is introducing innovations today, in what ways and for what purpose. Here it is important to keep the focus not on competitors, but on customers, because they are the basis of business sustainability.

What is included in creating an information field in a company:

• collection of company analytics;
• collection of customer analytics;
• collecting analytics on competitors;
• collection of analytics on suppliers;
• industry trends and tendencies;
• world trends and tendencies.

As for analytical data, this is not just the volume of revenue for the current year, but in dynamics over 3-5 years, as well as an analysis of why they grew, for what reasons they fell, and how they looked compared to competitors. If we collect data on clients, we look at whether their number has increased or decreased, how requirements, motivation, shopping basket have changed, what happened to the sales model.

Dynamics are very important when developing strategy.

I will give an example of a project implementation for one large organization. When we looked at the numbers, it turned out that out of 3.5 thousand clients, only a little more than 100 provide 70% of profit. If one of these customers leaves, it will hit the business extremely hard. Therefore, it is very important to look at who makes a profit for the company and how the situation with this category of clients looks over time. This information will be needed when discussing the future of the company. 

It is necessary to keep 3-5 competing companies in sight and analyze their actions. And the key point is to try to include competitors in your business model by answering the questions:

• Who are their clients, is there any overlap with yours,
• How do competitors attract their “target”, what channels do they use for promotion,
• What are the reasons why your clients switch to your competitors?
• What does a comparison of competitors' revenue models show with yours?

Discussing the future does not necessarily mean only new ideas. Look at what is happening in the world, study the main trends and their impact on the development of your business.

I advise you to study very carefully what is happening around you and adopt interesting solutions if this ultimately allows you to meet the needs of your audience. After all, clients are the most important thing!

Now the question is: if the company, for example, has only 20 employees, then who will do this? It would be good to hire a marketer, analyst, or even a young specialist for an internship. However, the owner is looking for excuses not to do this: “There are no funds in the budget for this yet. We’ll hire a specialist when we earn money.” In fact, money will not just appear! But the entrepreneur does not want to invest in the future.

2. Expanding your horizons. It is very important to attend various conferences, forums, and seminars to study the opinions of other people, especially those who are looking into the future. Reading books should become a habit. Create a good library for your team, get together and share interesting “tricks”. Don't ignore YouTube channels run by famous entrepreneurs - they can be played in the background. Even if you do not agree with their opinion, it is already useful to join in the discussion and reflect. And any thoughts, even the most fantastic ones, are already a step towards the future.

3. Seek help from experts, external consultants, your clients - anyone who can illuminate the future. This resource is often underestimated. Talking to an expert in your industry can help you find the steps that will move your company forward—and it's completely free. Expert advice certainly costs money. But your best expert can be your loyal client. Chat with him, find out what he expects from your company in the future, what he is not entirely happy with, why he is turning to competitors, etc.

Don't be afraid of the truth, even if you have to hear that your product isn't as good as you thought. Sometimes it's good to get rid of illusions!

4. Choosing tools for “life in the future.”

Let me give you a few examples:

• Days of dreams. Set such days: for example, every Wednesday. And start dreaming with your team (especially those who can dream). The main rule is no criticism or restrictions. Let's say everything is possible. What will you choose? What clients would you like to work with in a couple of years? What products will you offer them?

• Conducting strategic sessions on specific topics. For example, set aside 3-4 hours and brainstorm on how to increase your company's visibility in the market or make it more effective.
• Interviews with clients. Distribute all clients among employees, and let each one personally communicate with them, ask about expectations from the market as a whole and from your company.

If you, for example, are the owner of a restaurant business, then take off your expensive suit, put on a waiter’s clothes and walk around your guests with a tray and chat with them. This way you will get more information than at a seminar or expert consultation.

• Product sessions. Review the products you offer to your audience. Ask yourself: “Is this really what my client wants? What “pain” are we helping him cure? What sets us apart from our competitors?
• Sessions on changing the business model. First, map out your existing business model, and then start transforming it. And work with your competitors’ business models in the same way.
• Strategy development. Don’t think that conditional employees Ivanov and Petrov will come up with something worthwhile in an hour on their knees.

To make plans for the future, we need to put hierarchy and subordination aside; bold dreams and interesting ideas are needed here.

Everything that we dream up, we will then run through a special funnel, calculate and make the necessary decision. But dreams are the beginning of this whole chain.

5. Planning events for pumping the future must be very strict. Let's say on Wednesdays from 9:00 to 13:00 - time for daydreaming. And no meetings, communication with clients, etc. — every employee should leave this “window” in the schedule for working with the future. This applies to absolutely everyone.

6. Conduct experiments (primarily on products and prototypes). Indicate the timing of the experiment: how long it will take to develop, what we will do, what the budget is, where we will get these funds. It is very important for the owner to allocate money for the experiment. For what? Something may not work out, so you need to determine from the very beginning how much you are willing to lose.

But remember that even the most unsuccessful experiment is, first of all, important conclusions!

7. Visualize and emotionally color ideas. Give your problems bright and catchy names. For example, if you are interested in starting a boutique, let your business model be called "Underdeveloped Boutique". Do you know what I mean? With one of our clients, who is a small trader, we were developing a business model for small deliveries to large companies. I suggested calling it “table crumbs.” A couple of days later the owner turns to me: “You know, I lost sleep thinking about this - I don’t want to settle for crumbs.” And now we are already taking a step towards the future: this “I don’t want” is exactly what we can start from.

8. Make changes to management culture. Motivate those employees who are involved in management. I'm not talking about monetary motivation. “One hundred dollars for an idea” won’t work that way. People who work on the future must understand what awaits them, what their prospects are. Support such employees, celebrate their successes - and let others who are not yet interested in the future become involved in this topic.

Every little thing is important. For example, a simple point is where to organize work sessions. Change the decor: move the tables, organize the space differently, add details. In general, create a space that is conducive to free expression of opinions, discussion of ideas, and constructive debate. For example, one of our clients organized a strategy session in a kindergarten, and hung a “Dreamers Club” sign on the doors of the room. Surprisingly, the participants in this session were simply bursting with ideas.

9. Work on building a team. 

No one should be forced into the future. Not everyone needs this. For example, there are excellent administrators who know how to work with numbers. But they are afraid to look into the future; it causes them anxiety. The role of the owner is to select those employees who are ready to go into the future. They will be part of the team that will develop and implement the strategy.

10. Describe exactly your dreams for the future. We are now at a point where everything is clear. And where should they end up? What steps should I take for this? What are the goals?

The worst thing about strategic planning is if the main goal is simply to make money.

I believe that money is a consequence, a by-product. If you work out the future well, the money will definitely come. But we put customers, the company’s products and its business model at the forefront.

11. Analyze your mistakes, not just your successes. There is such a cool event - a night of fakaps. A huge number of companies around the world on a certain night gather a team of managers and key employees and discuss until the very morning what mistakes they made, how to use this experience, what conclusions to take with them into the future.

If they don’t impale or beat with sticks for “failures,” then the leader finds the courage to announce: “It looks like we are close to failure. Guys, I made a mistake somewhere, help me."

After all, what usually happens is this: “I tried to hide my mistake, covered my tracks and crossed my fingers so that no one would notice. And what happens next, I don’t care anymore.”

12. Information is everything to us. How can you plan the future if everyone has their own picture of the world?! Create a general chat, upload various materials and analytics there, and start discussing strategy issues. And then go and do it. Get the first results and don't be afraid to share the truth.

You can spend as much time as you want thinking about strategy and painting the brightest pictures of the future, but this is only 20% success. The rest of the 80% are the real embodiment of what you imagined in your dreams.

Instead of a conclusion. Open up to the world. Gain new experiences. My opinion: you can’t build a successful business if you don’t travel, because it’s energy, emotions, a burning look. Go for walks, watch movies, read science fiction and fairy tales. Dream!

Want to learn more about the strategy - subscribe to Alexander Pankov's channel "Labyrinths of Strategy", where is he in the video shares key topics that will help anyone looking to take their business to the next level.