Think ahead before growth forces you to look back

Growth also makes change harder

Small businesses have an advantage that becomes easier to lose as they grow: there are still fewer things to change. If positioning changes in year one, the work may involve a website, a few messages, and some channels. Make the same change years later and it may affect products, CRM systems, automation, sales teams, partners, campaigns, processes, and thousands of customers. Stanford research on organizational change suggests that increasing complexity makes the consequences of structural change harder to foresee and can increase the disruption and costs connected to reorganization.

That is one reason strategy is useful before complexity builds. Michael Porter describes strategy as a set of choices supported by activities that fit together. Over time, those choices become connected to many other parts of the business. That fit can make a company stronger, but it also means changing direction later may require changing more than one thing. Porter also notes that new entrants can sometimes pursue new positions more easily because they are not yet constrained by the history and commitments of established companies.

Thinking five years ahead does not mean planning five years in detail

Starting strategy early does not mean pretending you can predict the next five years. Research on small firms points to a more balanced view. One meta-analysis found a positive overall relationship between formal strategic planning and financial performance in small firms. A separate study of 223 new ventures found that planning helped founders turn broad goals into actions, balance resources, and move activities such as product development and venture organization forward.

I learned the distinction in my own business. I started with a robust five-year marketing plan. After the first year, financial reality forced me to rethink channels and how the business was being promoted. In some areas, I moved into execution first and returned to strategy afterward. The lesson was not that long-term thinking was a mistake. The mistake was putting too much detail into a future that was still uncertain. A better model would have been a five-year direction supported by a 12-month roadmap that could change as the business learned. That is close to the logic behind Rita McGrath and Ian MacMillan's discovery-driven planning: when uncertainty is high, planning should help a business learn rather than pretend every assumption is already a fact.

Long direction. Short roadmap. Continuous learning.

5-year direction
Where are we trying to go?

12-month roadmap
What needs to happen now?

Learning cycle
What is reality telling us?

The horizon provides direction. The roadmap turns it into action. Learning keeps the plan from becoming a constraint.

Build the foundation before execution becomes infrastructure

Branding belongs in that foundation too, but that does not mean a new business needs to spend heavily on a complex visual identity from day one. It means getting clear early on how the business wants to be understood, who it is for, and what position it wants to own. Research involving 721 Finnish SMEs found positive relationships between brand vision and positioning and brand performance, which in turn was positively related to financial performance. Branding deserves a deeper discussion of its own, but the lesson here is simple: positioning should not be something a company discovers only after the website, product, and communication system have already been built.

Early strategy does not remove the need to pivot either. It can make the pivot better. Roger Martin separates planning from strategy because a plan focuses largely on actions within the company's control, while strategy requires choices and assumptions about a market the company cannot control. That distinction matters when resources are limited. Moving straight into execution can feel faster, but it can also spend scarce money on channels, messages, or systems that later need to be rebuilt. Strategy is not there to stop the route from changing. It gives the business better criteria for deciding when to change, why to change, and what should remain consistent.

“Think ahead before growth forces you to look back.”
Diego Gomes, add2go