Strategic planning that works for SME law firms
The objective of a strategy is not to eliminate risk, but to increase the odds of success, writes Anthony Hersch.
While most would support its benefits, strategic planning is often met with some polar reactions: for some, there’s a sense of security being able to have detailed planning documents, with corresponding cost and revenue projections. For others, the concept can be intimidating. And for a lot of SME law firms, it’s possibly not a high priority as billable hours tend to dictate focus.
The challenge with strategic planning is to work out the sweet spot: to invest in the process enough to be smart, relevant and get a competitive edge, but not so much so that it’s either a distraction nor becomes superfluous, and therefore redundant.
In conjunction with Harvard Business Review, here are some tips on how to keep strategic planning relevant:
1) Keep the strategy statement simple
Avoid vision or mission statements that set out relatively lofty and aspirational goals. Instead, keep it real and focus your energy on the key choices that influence revenue decision makers – your customers.
Customers will typically choose whether or not to engage with you based on your value proposition, and whether it’s superior to your competitors. Your strategy should therefore focus on which specific customers to target and corresponding conversion strategies.
Take time to consider the following:
• Target customers:
o Who is my typical customer (to include average age, sex, ethnicity, income bracket, marital status, working status, location, etc)?
o What are their motivators?
o What are their pain points?
o What are their behaviours / where can they be reached?
o What are some general observations about this market
o How can I extend my reach to this market?
• Value proposition:
o What are your strengths?
o What do you do differently?
o What gets you business / what converts your customers?
o How do I communicate my point of difference/strengths/value proposition currently?
o How could this be better?
It’s easy at this stage to focus on the tactics: the challenge is not to concentrate on these first, but really identify how to further penetrate your market with a superior proposition.
2) Keep the strategy fluid
In 1978, Henry Mintzberg published an influential article in Management Science that introduced the emergent strategy, which is not based on an original intention, but instead consisted of the company’s responses to a variety of unanticipated events.
This viewpoint countered the widely recognised principles of a deliberate strategy (which is intentional), and was based on observations that managers overestimate their ability to predict the future, and to plan for it in a precise and technocratic way.
By drawing a distinction between deliberate and emergent strategy, he wanted to encourage managers to watch carefully for changes in their environment and make corrections in their deliberate strategy. Similarly, he warned against the dangers of remaining steadfast to a fixed strategy in the face of substantial changes in a competitive environment.
What we can take from this principle is that the strength of a strategy is in its fluidity, and being connected to the market and its constant state of change. This notion abandons static, inflexible planning and encourages in-tune behaviour with the market and its relative forces.
3) Recognise that strategy is not about perfection
A perfect strategy doesn’t necessarily correlate with superior outcomes. Further to the above, it needs to be a realistic blend of consideration, solid principles and deliberate action.
A strategic plan doesn’t need to be a thesis, but it does need to be formalised. With the end of the financial year complete, now is the perfect time to consider your choices. We encourage you to start this process to ensure that you remain ahead of the game armed with solid, fluid and simple planning.
Anthony Hersch is the general manager of JustKapital Disbursement Funding.