60. Corporate Strategy and Igor Ansoff for small business (part 1)

Igor Ansoff (1918-2002) pretty much invented the concept of corporate strategy – all of course based on large corporate organisations (he worked with Rand Corp and Lockheed). But small businesses also have to make strategic decisions so what he had to say can be relevant. Ansoff drew a qualitative line between strategic decisions which were fundamental to where the business was going and had always to be taken at the highest level and those decisions which could be delegated because they were covered by policies or operating procedures. He came up with the 3S classification of decisons: Strategic-Structure-Systems, which might be interpreted for small business into deciding where we are going, how we are organising and resourcing to get there, and what we are actually going to do to make it happen.

Small businesses often struggle with each of these issues – and often get them in the wrong order! Building systems that cannot support what the business will require to move forward is not unusual; establishing a financial base that cannot support the growth that the business plans to have is equally common. And so often unfortunately the business has no strategy – no clear idea of where it is trying to go and how it will get there.

Without these elements and in the right order any business, whether small or large, is likely to lose its way or perform a long way below its capability. And when markets are tough the need for clear direction, adequate organisation and resource, and efficient operating systems are more critical than ever.