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With Wisdom and expertise – The Strategy-Committee from Michel Lanfranca

The importance of Strategy-Committees for SMEs Many Owners or Managing Directors of Small and Medium size Enterprises know about the issue: they are deeply stuck in the daily business, solve plenty of urgent issues preferably alone and in addition take care of the most important customers or orders. By chance they also have a look on current business figures, keep the available cash in mind and find time for their employees.

Yet, for the strategic considerations or for the development of complex company strategies, there is no more time available. Although it would be so hugely important for SMEs to accurately observe their markets and business trends and to accordingly shape their firm’s history.

Small and Mid Size Caps (in Germany famously called “Mittelstand”) does not mean renouncing highly modern Management methods. Where own experts are missing, you can get the help of external top-managers or consultants. Strategy-Committees

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have proven themselves during the last years by standing by SME Managing Directors.

In spite of this not so many small and mid caps do possess such specific advisory boards. Their attendees are coming from different external companies, sectors or functions and do have personally no voting rights or power. They basically bring recommendations, which the Managing Directors or the CEO must not follow. Many companies prove still to be reluctant in front of the effort presumably hidden behind a strategy-committee, but they underestimate the meaning of a strategic business orientation for their own existence.

Topics for strategic planning

Long-term planning of the firm’s business future is depending on a lot of factors. Within the company, the capital structure, the cash situation, the set-up with means of production and also the competences of the employees do influence its sustainability. Further, the conditions of competition within the firm’s activity sector and markets, the demand for products and services or the political framework belong to the external factors which shape the direction of SMEs.

Accordingly, the activities from the Strategy-Committee can focus on some key topics. It can for example give impulses and prepare for the development of new products / technologies, assess new markets or plan investments in future production lines. Topics of such an advisory board can also cover the succession planning within family businesses, the building of different financing channels or the outsourcing of non core activities.

The discussed strategies should shape the direction for the next years. Currently there are for instance lots of managing boards which are challenged by their strategy-committees on the influence of the Digital Transformation on their businesses. The aim is to counter soon enough the related potential risks and realize the upcoming opportunities.

Arguments in favor of installing a Strategy-Committee

Managing Directors of SME firms who successfully introduced a Strategy-Committee, report positive experiences with the external Management professionals. They take benefit of a long term and target oriented company steering. The advantages of the co-operation are in the meantime much better valued than the effort which has to be

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carried on.

Here a few arguments for the adoption of a Strategy-Committee:

The competences of the Managing Directors will be both challenged and extended through the experience of the successful Managers

The strategic thinking of the CEO or MD will improve, while new ideas will be fostered

The joint work steers the thinking of the involved members towards future oriented methods and objectives, while taking into account risks and opportunities

The clear call for a systematic way of working forces the Managing Board members to execute written preparations and to make for pace and discipline

The consulting acts as true leverage for the growth and success of the company

Experienced consultants can increase the company’s credibility in particular for banks and investors

The strategists connect the Managing Directors with different Networks and can “pre-sell” for the company

The ideal staffing of a Strategy-Committee

Searching for the right candidates for Strategy-Committee-Member positions can take some time. Only a trustful collaboration brings success over many years. That’s why the choice of the members has to be done very carefully.

Working within a Strategy-Committee is a long-term duty, with a high level of responsibility and which requires discretion and independency. Besides business expertise and know-how about specific industries or sectors, the strategists need integrity and morality.

Moreover, the ability to challenge new ideas and strategies, as well as to bring wisdom to the SME entrepreneurs is expected.

The “Mittelstand” demands both a down-to-earth attitude and the ability to develop visions. For that, e.g. 3 to 5 experienced Managers are required, who are able to work constructively together and have complementary competences. Managing Directors

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of other companies, Top-Managers from banks, Management-Consulting firms, law or tax firms as well as interim managers can be here very useful.

The basis for a successful joint work is yet a strong compatibility to the CEO personality.

The committee can meet e.g. once a quarter or even on a monthly basis in some companies, in order to discuss the most important topics. Attending a Strategy Committee is linked to some timely effort and to responsibility.

But also the external committee members do take benefit from their participation. Their business perspectives and contacts are expanded. They can develop their own competences, including their motivation and their leadership skills. These personal experiences complete also their main jobs positively. They just get out of such an effective assistance to SMEs strong drivers for their own motivation and pleasure.

The responsibility of the Managing Directors for an efficient Strategy-Committee

As owner or leader of a SME you own the responsibility, that the Strategy-Committee should work efficiently. This is your own interest, for a long term success is only possible through a trusty and structured way of working together. So take care that the Committee members develop themselves as a real team, where each one can play his/her strengths.

Give structure to the meetings via a meaningful agenda and promote a positive working atmosphere. In addition, reflecting about the results of the committee should also be regularly part of the agenda, including proposals for improvements of its way of working.

At the end, you will be able to use the expertise of the professionals for the success of your company.

From Michel Lanfranca, Partner at VISCONTI.