Financial Times

Getting ready for the future
By Nilooka Dissanayake
Leaders, have you been looking in the mirror? Have you decided how you want to change in 2004 and what you want to achieve by the year-end? Planning for the future of a business doesn’t end at the end of one year. And there are many types of plans that a business leader needs to be familiar with. Since we are addressing mainly the concerns of small and medium businesses (SMEs), let us look at the planning issues that affect this type of business.

If you have indeed been looking in the mirror, you will discover that what you see is just the same "only the things go the other way," as Alice says in Through the Looking Glass. That is, we are so used to seeing the world and ourselves with our own eyes that unless we look really hard, we will not even notice what we have done wrong or where we have missed key issues.

So, before doing anything important-like putting my role of leader under the microscope for instance-I like to do background reading. Then I talk to people. This is due to two reasons. Firstly, I like to know what I am about. I dislike the idea that as a leader, or just another human being, I may have blind spots. To avoid that, I read on the topic and around it to refresh my memory.

Secondly, while at university, I recall my strategic management professor telling us that "important ideas generate at the periphery" as opposed to the centre of action. So, in addition to reading around the subject, I keep my mind open to unlikely areas, that no one would suspect of looking at to discover strategic issues. And it helps me always.

Now, before going into talking of strategy and planning, let me share with you a few points I came across in a book called Makers of Management which you will find useful in setting the right mindset to your planning process. It is an extract from. The Marketing Imagination, by Theodore Levitt who claims that "it has by far the most important and enduring subjects of all my books and they will last a long time because they deal with things that won't go away." In this book, Levitt argued that competitive success depends upon the realisation of five things. They are so simple and obvious. But, SMEs and entrepreneurs that run them sometimes tend to forget them, especially when we get wrapped around in ourselves and our own self-importance. They are:

*The purpose of a business is to create and keep a customer. * To do that you have to produce and deliver goods and services that people want and value, at prices and under conditions that are reasonably attractive relative to those offered by others, to a proportion of customer large enough to make those prices and conditions possible.

* To continue to do that, the enterprise must produce revenue in excess of costs in sufficient quantity and with sufficient regularity to attract and hold investors in the enterprise, and must keep at least abreast and sometimes ahead of competitive offerings.

* No enterprise, no matter how small, can do any of this by mere instinct or accident.

It has to clarify its purposes, strategies and plans, and the larger the enterprise the greater the necessity that these be clearly written down, clearly communicated, and frequently reviewed by the senior members of the enterprise.

* In all the cases there must be an appropriate system of rewards, audits, and controls to assure that what's intended gets properly done and, when not, that it gets quickly rectified. Simple, isn't it? Point two is a gem. Point four is what we need to be thinking about while getting ready to plan for the future of our business.

The last point though is far from simple, especially from a practical standpoint. In small businesses where one person or two are responsible for most of the management and strategic functions, the weaknesses of individuals tend to directly affect the business.

So, friends, watch out for this. The book also asks Levitt how to develop a marketing imagination. And this is his formula: "Expose yourself to your environment and ask questions to develop your sensitivity and sensibility." Shall we also do that before we finish our planning? Keep on your thinking caps. Don't remove them just yet.

We will be talking more about planning in future articles. In the meanwhile, let us know what topics you like us to touch upon in the future. You can contact on ft@sundaytimes.wnl.lk or on 5-552524.

The writer is the Managing Editor of Athwela Vyaparika Sangarawa (Athwela Business Journal), the only Sinhala management monthly targeting the small and medium enterprises and its English version, Small Business International magazine.

Back to Business