Creating Your Target Strategy

As a recovering entrepreneur (you never really get it out of your system, do you?), I have built and managed businesses in several sectors of various sizes and configurations. Regardless of whether my company is composed of just little, old me or me and couple dozen of my closest friends, my management strategies and tactics remain largely the same. Some of these I have learned in the School of Hard Knocks and some I have picked up from business school. Both are relevant to my small business philosophy in some pretty significant ways.

What is Your Target?
Whenever I start up a new business, I am careful to spend some quality time thinking about what I call my “Target Strategy.” I grab a clean sheet of 8×11 paper and draw several concentric circles so I end up with a diagram that looks like a target. In the bullseye, I list my core competency or why I am starting the business in the first place. If I am creating an IT consultancy, I might list consulting, as well as my domain of expertise (i.e., which software packages or systems are my specialty).

Expanding Your Target
I then move to the ring immediately circling the bullseye and list all of the business processes and functions in direct support of my core competency. In my example above, this might be sales, marketing, and even contract programming. These should be the tasks and processes that would cause your business to flounder if they were removed from the target.

The third ring includes the business processes and functions supporting the second ring. While the tasks and processes listed in the second ring (sales, marketing, etc.) can soak up a significant amount of an entrepreneur’s time and energy, the third ring is packed with ancillary functions that are simply time-sinks. This ring includes tasks such as bookkeeping, office cleaning, company vehicle maintenance and a host of other services that many small business people think they can save a couple of bucks on by doing themselves.

Spending Your Time (and Dollars) Wisely
“I’m not going to pay a bookkeeper fifteen dollars per hour when I can do it myself!” If I had a dollar for every time I heard this from a small business person, I could retire today. This is an excellent example of being penny wise and pound foolish. Whenever I hear a phrase like this, I am quick to remind the small business person that every minute she wastes on bookkeeping is a minute taken away from sales. This is why you must quantify, quantify, quantify your task time within all of the target rings, not just the bullseye.

If you are a single IT consultant and you discover your combined sales/production time is worth, say, $100 per hour, where are the cost savings in doing your own bookkeeping, office cleaning, or vehicle maintenance? Every second you spend toiling away on those outside rings is a second of lost core value and revenue. Persisting in this thinking will not only limit your income, it will put your company at risk and, let’s face it, you are already shouldering enough risk as an entrepreneur. Concentrate on the core and let others whose core businesses are the ancillary services you require serve the outer rings of your target.

People: A Second Ring Consideration
One important second ring business function I neglected to mention above is people management. If you are fortunate enough to be so busy you need help, you must bring people into your company on a contract or employee basis. This can be a tough transition for an entrepreneur who has started a company based upon his expertise, yet has little to no management experience. Managing people in a small business can (should?) be much like managing them in a very large organization.

If you are new to managing people, I highly recommend you seek out the assistance of a professional people management company (a third ring supplier) to act as your HR department. These organizations exist to help businesses of all sizes attract, recruit, and retain the right people. While this approach can seem expensive to a small business person, again, it must be weighed against core production costs. These organizations can also help with coaching and training of both you and organizational members. This is a vastly better strategy than learning to manage people through trial-and-error, which is far more expensive than doing it right the first time with the help of others.

Targeted Ethics
As you think about your company in terms of the Target Strategy, you will begin to see that focusing on what is really important in your organization can also help you with ethical dilemmas as they arise. So many ethical lapses in businesses large and small are prompted by pressures; pressure to bring in more revenue, pressure to beat out the competition, pressure to save money. These are all necessary for a vibrant and healthy business practice, yet they can cause ethical breaches that compromise organizational members and entire companies.

As you concentrate on your core competencies by identifying them within the bullseye of the target diagram, you relieve some of the pressures harboring the potential to drive you or members of your organization to make ethically challenging decisions in the interest of expediency. We have all been challenged with decisions made in the heat of the moment based upon the various pressures of operating a small business. If you are worried about getting the bookkeeping done at month-end, rather than remaining focused on producing the highest quality product for your customers, ethical short-cuts might seem like a good idea at the time; they usually are not.

Hitting the Bullseye
If you have not already done so, grab a clean, white sheet and get started on your Target Strategy diagram today. Hey, a restaurant napkin will work, if that’s all you have handy. As you settle on the description of your core competency, you will see that many of the tasks you perform on a daily basis are better left to the professionals. You will also notice how your bullseye is someone else’s second ring service. Seeing yourself in the context of your customers’ Target Strategies will increase your sense of pride while helping you refine your own strategy.  Happy shooting!

About the Author:
Darin R. Molnar, PhD is an entrepreneur and founder of Middle Way Management, a more compassionate way of leading and managing people. He regularly contributes to the Middle Way Management Blog at http://MiddleWayManagement.blogspot.com and is completing the first book on the approach due out Q4 of 2010. Dr. Molnar teaches at three universities where he oversees courses in business management and ethics, organizational behavior, and leadership at the undergraduate, MBA, and doctoral levels. He enjoys fishing for salmon and steelhead with his four children whenever time and the fish allow.

Category: Business Tips & Resources