If SMEs are sloppy with strategy, they are contributing to a situation where large, cash-rich companies can sit on the future too heavily. This risks stopping the new solutions that our children and grandchildren need.

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If business were a schoolyard, the big guys would call most of the shots. In some industries, this is particularly marked. Giants like Google, Amazon and Microsoft sit heavily on their markets. The same goes for a number of consultancies.

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Actually, it's a paradox. For never have the opportunities for small and medium-sized enterprises been better. Technological developments mean that a new idea can be born in Copenhagen, developed in Kolding and 3D printed in Kalundborg without too much hassle.

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At the same time, the corona has shown that we don't have to go to the other side of the Earth, as we thought, to work together. Most things can be done via Teams. But why don't we see the big, heavy companies being challenged by the small ones?

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From business model to good business

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The explanations are many, of course, but one of them concerns me more and more. After 25 years of working in strategy, I dare say that too many small and medium-sized enterprises are sloppy in their strategy work.

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And it's not just my hunch. For example, a report by the Center for Owner-Managed Enterprises shows that about one in four owner-managers has not formulated objectives for the company. And up to one in three have not formulated action plans and work assignments for employees.

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Often I encounter the paradox that the accounting department has effective programs. Sales is top tuned. Coffee machines and inventory control are in play. The business model is in place. But the strategy work - it is mostly seen as a cumbersome paper tiger.

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And because strategy is something that is often not so visible in everyday life, it may be "forgotten". I've even heard business leaders say: "We don't have time for all that strategy talk".

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Here lies a huge misunderstanding. Of course, if strategy work just ends up in the drawer, it's a waste of time. But if the strategy is concrete, workable and easy to understand, it can be the key to making a good business model a good business in the long term.

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If the little ones fail, the big ones win - and then most lose

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Is it only a business problem when strategy is lacking? No, I think it's also a societal problem.

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Because in a world where we urgently need to find solutions to the climate crisis, poverty, clean water, gender equality and much more, we need all good ideas and smart business models to become good business.

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We can't expect Google, Amazon and Microsoft to get all the ideas. But if they are to be seriously challenged, the small ones will need the same strategic nous that contributes to the big ones' success. If not, we all risk missing out on the new solutions our children and grandchildren need.

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I therefore hope that 2022 will be the year when better and concrete strategy development will be given more focus in SMEs. We all need that.

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This column is written by Founder & CEO, Sanne Markwall, MakeMyStrategy and was published on 14.1.2022 in Jyllandsposten Erhverv and on finans.dk and can be read HERE