Practical strategy development: a wise investment for middle market businesses

Middle market businesses – entities from $50 million‐$1 billion in revenue – are a significant force in the economy, generating $3 trillion in annual revenues and employing 20 million here in the USA alone. They are particularly besieged, and vulnerable, and yet they are unlikely to use strategic planning systematically to help set priorities and improve performance. The article aims to explore the internal and external forces arrayed against these firms, then prescribe a practical process for developing strategy –what it is, who does it, when – to improve competitive advantage, management perspective, and overall performance.

The practical strategy development process described in the article focuses on developing a strategic databank, convening and managing the strategy team, and setting the stage for practical implementation , when broad objectives need to be translated into specific actions, schedules, budgets, and metrics. The approach described balances internal and external analysis and stakeholder input, captures the key decisions in an accessible, common format, and creates a practical roadmap for managers to help guide decision‐making throughout the course of the year. Dozens of middle‐market firms across a wide array of industries have used the methodology, which derives from two decades of strategy consulting and senior operating experience.

Formal strategy development is underdeveloped or ignored in many middle‐market businesses, even as market and industry forces grow more antagonistic. This practical, streamlined methodology delivers substantial process and content dividends – giving managers strategic perspective, a forum for debating resource allocation, and an accessible platform for setting priorities and making key decisions. Equally important, is it is a straightforward approach to securing stakeholder input, enhancing the firm's ability to carve out competitive advantage and enhance stakeholder satisfaction.

The guidelines and logic are universal for middle market businesses, but some of the parameters described may need to be adapted to fit the planning cycle and technology of each firm, and refined over time to dovetail with the firm's budgetary process.

Middle‐market businesses need to institute a streamlined, rational, balanced, and participative strategy development process to navigate the forces that confront them. The process can be compressed to eight weeks, and will deliver a small set of focused, practical strategies and performance metrics that can be communicated to key stakeholder groups. Careful process management will induce managers to commit to implementation, and clarify the rationale for allocating the firm's precious resources. By breaking down lofty, abstract statements into practical, actionable, measurable activities, the firm's leaders can better chart the future, respond to threats and opportunities, and enhance performance.

The rational, practical approach described offers middle market business managers a toolkit for formulating strategies that can be implemented – for bridging the gap between aspirations and real performance. The article outlines a straightforward process, providing hands‐on guidelines for optimizing performance, and galvanizing the management team.