Many in the mortgage industry are blaming the bad economy for why their business is now tanking, but that might not be the only reason. These business owners, said one consultant, need to look in the mirror to help assess where the blame might truly lie.
Rich Horwath, a strategy consultant and author, cites a survey in the Harvard Business Review which claimed nearly 50% of the business failures in the U.S. resulted from flawed strategies.
Part of this phenomenon is that companies create strategies, write the plans, and then let them languish in a desk drawer. "Many companies suffer from an organizational lobotomy: mindlessly doing the same things in the same ways as their competition year after year and expecting miraculous new growth," Horwath said.
"They act like zombie bumper cars, constantly spinning in different directions because they're always being reactive, instead of proactive. The irony is that most of them wouldn't dream of going a year or two without preventative maintenance on their cars, like changing the oil, checking the filters and rotating the tires. Yet those same people will go a year or more without a similar type of diagnostic or tune-up on their business."
Horwath believes that a simple five-step process could unlock the potential of the strategic plan.
1. Discovery-In this phase, you are pulling together everything you know about strategy, market intelligence, competitive intelligence, customer data and industry data so you have a solid bank of information on which to base your primary business assumptions.
2. Strategic thinking-In this phase, you get together with your development team, take the information from discovery phase and use tools and models to generate new insights and discover what is going on in your business and how your business is moving forward in the future.
3. Strategic planning-This takes the insights from strategic thinking and channels them into an action plan to achieve your company's goals and objectives.
4. Strategy rollout-A company cannot just create a plan, they have to implement through their employees. But in many cases they fail to communicate with their workers, leaving them in the dark with regard to what they need to do in order to execute it. How can they be expected to stick to the plan if they don't know the plan?
5. Strategy tune-up-Companies must examine their strategic plans to evaluate what is different, what has changed and what is new since they created it. The next step is making adjustments to the plan.
"New growth comes from new thinking," Horwath said. "Expecting new growth for your business without new ways of thinking about it is like a farmer expecting new crops to grow without first planting the seeds."
