Planning for Long Term Success in Your Business

By:  Jamal Cummins

Jamal CumminsFor business enterprises and entrepreneurs, the first major challenge is usually that of developing and establishing a successful new venture.  However, the ability of these entrepreneurs to establish a new venture is dependent on some basic necessary skills.  These skills include the ability to identify a market need and the capability to develop a product and/or service that could satisfy the need.  When the entrepreneurs successfully conduct these essential things, the business enterprise is likely to experience rapid growth.  Notably, the success of the business enterprises usually creates the next set of challenges and problems to survival of the business venture.  However, for a business venture to continue surviving and be successful in its operations there is need to continually plan for the long-term success of the business enterprise.

Developmental Tasks:

One of the most important aspects in planning for long-term success of a business venture or enterprise is the consideration of developmental tasks.  Once an organization has identified its business foundation, the next process is to develop tasks that are necessary in determining success in every stage of growth.  The processes of developing tasks that influence success in every stage of growth include identifying the various developmental tasks.  Generally, there are six developmental tasks that are critical for the long-term success of a business enterprise.

The first developmental task is to identify and define a market and creating a market niche if possible.  In this case, the business enterprise or entrepreneurs identify or define the targeted market segments and develop market niche, which is the creation of sustainable competitive advantages to control the identified market segment.  The second task is developing products and/or services that meet or satisfy the needs of the target market.  The success of this task is dependent on the success of identifying the firm’s markets, which is basically its customers and their needs.  The third task is acquiring and developing extra resources that are necessary for the current and expected future growth of the firm.  This process requires the company to become more skillful at resource management.

This is followed by the task of developing operational systems, which entails effective administration of daily operations through establishing necessary systems to facilitate the operations.  The development of operational systems is followed by the creation of management systems that are necessary for long-term growth and development of the business.  The four management systems that should be developed include planning, management development, organization structure, and performance/control management systems.  The sixth developmental task for long-term success is managing the corporate culture that entails the norms, values, and beliefs that govern the behavior of people on a daily basis (Flamholtz & Randle, 2007, p.17).

Stage I and Stage II Organizations:

Generally, Stage I and Stage II organizations represent the entrepreneurial phase of organizational development that requires different keys to success in developing them.  Since stage I organizations are relatively new business ventures, there are three keys to developing successful Stage I organizations.  These keys include the ability to identify or define a market need, to develop and provide products and/or services that would meet the identified market need, and to build an organization with the ability to function on a daily basis in providing the product and/or service.  In the first key, the organization basically identifies a market need that is not currently being satisfied or a market need that can be met in a different way from the existing means.  Secondly, the organization should have the ability to develop a relevant product or service that meet the specific needs or a new way of meeting the identified market need through the existing product or service lines.  This is followed by the third key that not only involves establishing basic systems for daily operation of the firm but also the identification of necessary individuals to staff the organization.  An example of a company that has successfully identified and applied the keys to Stage I organizations is Apple Computer.

On the contrary, Stage II organizations is the rapid growth stage of organizational development that begins after the firm has solved the basic problems involved in establishing a new venture.  Unlike Stage I organizations, there are two keys to successful develop Stage II organizations i.e. the ability to obtain resources and to create complex operational systems.  As rapid growth places various demands on the firm, there is need to develop enough financial, technical, physical, and human resources to meet the demands of growth.  This is followed by the ability to effectively integrate new operating systems into the firm.  An example of a successful Stage II organization is Mrs. Field Cookies.

Transition from an Entrepreneurship from Professionally Managed Organization:

Unlike Stage I and Stage II organizations, Stage III represents the professional management phase that is different from entrepreneurship.  The most significant differences between these organizations are associated with key result areas.  First, planning in these organizations is a way of life unlike in the first stages firms where the plan is in the entrepreneur’s head.   Secondly profits in these organizations are planned instead of being residual while they contain formal organization culture unlike entrepreneurial firms.  Unlike entrepreneurial firms, professionally managed firms have structured control of operations.  Budgeting in Stage III organizations revolves around management by variances and standards unlike in entrepreneurship where it’s not explicit.  The leadership in these firms in participative or consultative and well-defined culture whereas it’s varying and loosely defined in entrepreneurial firms.

The development of Stage III organizations requires some necessary changes such as planning, corporate culture, organizational goals and objectives, role definition, responsibility, corporate culture, and mission statement (“Is your Business Positioned”, n.d.).  While planning requires the development of strategic and annual business plans, the organizational goals and objectives should be developed for departments, people, and the entire firm.  The most critical challenge that must be met if the organization is to transit from an entrepreneurship to a professionally managed organization is the need for greater coordination of the general operations across various departments.