Strategy development in mid-sized companies: what works differently than in a corporation

What makes strategy work in mid-sized companies different from corporations?

In a corporation, development and decision are separate. One department prepares, a committee decides, and between them sits an approval path with several stops.

In a mid-sized company, that separation disappears. The same five to ten people analyze, discuss and decide, and they do it on top of their actual jobs. That comes with one big advantage and one big risk.

The advantage: decisions come faster and are made by the people who then have to execute them. The risk: nobody owns the preparation, and a group without solid numbers ends up debating opinions.

Who belongs in the process and who doesn't?

The temptation to include everyone is strong. The reasoning sounds good: involve the people affected. The result is a group of twenty in which nobody pushes back.

What works is a core group of management and division heads, the people who have to execute the decisions afterward. Five to ten people, no more. Everyone else contributes to this group: through interviews, data analysis, assessments.

Shareholders who aren't operationally involved are a special case. They don't belong in every session, but their expectations on return, risk and time horizon need to be clarified before the group discusses options. Otherwise they become the brake on a decision that was made without that knowledge.

How much analysis do you really need?

Less than consulting proposals suggest, and considerably more than most companies prepare.

Three things need to be solidly on the table before the group talks about direction: where you actually make money today, how your market will develop over the next few years, and what your competitors can do that you can't. Everything else can wait.

Four to six weeks of lead time is realistic for this, provided someone is assigned the task. Without that assignment it doesn't happen, and the first workshop morning gets eaten up by it.

How long does this take alongside day-to-day business?

Three to six months from initial preparation to a strategy the leadership team stands behind. Faster is possible, but rarely carried.

The workload is unevenly distributed: preparation and analysis tie up one person heavily and everyone else barely at all. The decision phase costs the whole team two to three consecutive days. Execution planning afterward runs in two-hour sessions every two weeks.

Anyone who instead schedules weekly working groups over six months spends more time for less result.

Which corporate habits don't work here?

• Working groups with interim reports. They assume someone reads the reports. In a mid-sized company nobody does, because everyone involved is tied up in operations.
• Analysis for its own sake. A hundred-page market report is impressive and changes no decision. Three solid answers change one.
• Separating strategy from budget. Corporations have separate processes for that. In a mid-sized company, the question "where does the money come from" is part of the strategy discussion, otherwise nothing follows from it.
• Cascaded goal systems across four levels. With two hundred employees, there aren't four levels to carry it.

How do you know the strategy is holding?

Not from the document. A good sign is when someone in an operational meeting says: "We're not doing that, it doesn't fit what we decided."

A leadership team that can still name the same three priorities six weeks after the process ended, without looking them up, has a strategy. One that has to look them up has a document.