Achieving growth is often compromised not just by breakdowns in strategic thinking, but also when business objectives are not prioritised. But how can businesses effectively overcome this challenge and meet their ambitions?
We interviewed Alisha Jernack, Partner at Mazars, who is responsible for advising senior management teams in family-owned and owner-operated businesses on growth and change strategies. Her experience spans a range of industries, including manufacturing, transport and logistics and service-led companies.
Alisha, in your experience, how do high-performing medium-sized businesses best shape and define their business objectives?
For many businesses, they’re often not clearly defined at all. Instead, they’re overly focused on the day-to-day and putting out fires. The really successful ones work hard to understand where they are today – and where they really want to be. That’s often the difference between staying mediocre and performing the same year over year – or being a high-performing company that delivers long term sustainability and shareholder returns for years to come.
Before any prioritisation takes place, what’s best practice for defining needs and priorities?
It’s always critical to start with an in-depth diagnostic analysis conducted by an independent third party to gain an understanding of where the company is today, what the shareholders’ wishes are – and where they want to be. This is so important, as many businesses are family firms and very close to the day-to-day. So, a third party is able to bring objectivity to the diagnostic and bring an understanding of where gaps exist. The assessment should cover all of the core areas of the business including finance and risk, management mindset, business operations, market, product, customer analysis, as well as technological and organisational capabilities. Next, they should devise a strategy to bridge any and all gaps.
External data forms a key part of this, providing robust insight for management teams on how they stack up against others in their sector. This can then be compared with their own internal historical performance data to gain an accurate understanding of the true potential of their business going forward. There’s also a lot of value in analysing existing internal reporting such as financial forecasts and how frequently they are created and revisited. Any financial forecast going forward should always be developed in parallel with their strategic plans and serve as a means to measure the success of plans, monitor costs against priorities and adjust plans with a full understanding of financial implications.
How do clashes between the personal objectives of business owners and wider business objectives most often occur – and how do you best prioritise them?
Clashes are common because medium-sized businesses are often family-run and passed down from generation to generation. Aligning business objectives and shareholder objectives is imperative to success. Family members will often have different priorities leading to differences of opinion on direction. Again, for us, it goes back to looking holistically at the business, understanding what’s important to each of the shareholders, then factoring this is in during diagnostics before defining strategic scenarios.
How, in your experience, do companies most benefit from prioritisation?
Primarily in direction, in the definition of a structured approach – and in building consensus on a sequence of events that the business can communicate – and rally around. We often see how, without prioritisation, management teams are left overwhelmed, not knowing which direction to go in first. This, in turn, can easily lead to corporate inertia. The list stays a list and sits in a drawer unactioned; the business owners reverting to delivery of the everyday they're used to.
Important also is the focus. We recommend prioritising no more than three to five breakthrough objectives at a time. This enables dependencies such as tasks, owners, timings, budgets, and resources to be allocated manageably, enabling accountability and delivery.
What if yesterday’s priorities need to evolve?
The importance of carving out time every month as a team to review progress against objectives set really can’t be underestimated. Meetings need to be diarised formally, as you would board meetings. Monthly strategic reviews will enable you to monitor progress against KPIs – and allow you to be agile, adjust assumptions, and reset timelines and expectations where you need to. As well as reprioritise objectives if need be. External involvement from a business specialist will often bring external objectivity – and in-depth sector experience to this important part of the process.