How I designed a process to help small businesses think longer-term

Challenge

Ontario’s small and medium enterprises (SMEs ) are Canada’s largest economic contributors. I wanted to find out how I could help them be most successful.

I conducted this design research to understand how small businesses in Ontario plan long-term.

I conducted semi-structured interviews with decision-makers of SMEs. The SME definition of 500 or fewer employees was divided into four different groups, with two decision-makers interviewed per group: up to 50, 51 -100, 101–300, 301–500.

The key question this research addresses is: How might reverse visioning (i.e., backcasting) aid small and medium enterprises within Ontario to articulate and map out long-term strategy?

In order to answer this, the following additional questions needed to be addressed:

  • How do SMEs in Ontario currently articulate strategy? Do they use visioning and if not, should they?
  • Do SMEs in Ontario currently practice backcasting?
  • How can the current strategic planning practices be critiqued and improved?
  • What insights can be gathered to inform the design of improved practice?

Process

To answer the overarching research question, the Ontario SME landscape was explored — first through secondary research, then through semi-structured interviews. A sample of 8 SME leaders, executive or management, were interviewed about the presence of specific practices (looking for those that can be categorized as “backcasting”). Leaders of Ontario SMEs were interviewed in order to determine best practices, gaps, and needs to inform the creation of a new visioning framework.

  1. A literature review was conducted to provide the necessary context to frame the project.
  2. An analysis of existing strategic planning cycles was conducted to identify gaps in the process which might indicate a need for strategic foresight.
  3. To validate the strategic planning needs of SMEs in Ontario, eight semistructured interviews were conducted with decision-makers of different sized organizations.
  4. Primary data were analyzed and compared with secondary strategic foresight data in order to generate a tool to address identified gaps in SME processes.
  5. A five-step engagement process was designed to lead partakers through the process of co-creating and executing a long-term vision for their organization.

A sample of eight SME decision-makers was interviewed about their strategic visioning processes and evaluated for the presence of specific practices (looking for those that can be categorized as “backcasting”). An interview script was followed. Leaders of Ontario SMEs contributed to best practices for the creation of a new visioning framework. A gap analysis was conducted between best practices, poor practices and mainstream practices for strategic planning.

Data Analysis

Individual cases were analyzed and compared against one another. Questions that were asked include: What works well for these SMEs? What does not? Based on the importance of a long-term strategic vision as indicated by the literature review, a gap analysis was conducted between best practices and current SME practices. The individual cases were divided into 4 categories based on number of employees. Since an organization of 10 employees is subject to very different pressures and challenges than one of 450 employees, the results were analyzed both individually and compared amongst the other participant in the same category to identify similarities.

Findings

CHARACTERISTICS OF ORGANISATIONS WITH 0- 50 EMPLOYEES

  • Collaborative, optimistic, trying to make ends meet
  • Lack of alignment on organization’s vision
  • Concerned with competition
  • Financial/quantitative goals for future only
  • Plan for general direction without specific details
  • No visioning techniques used
  • No external consultants / facilitators
  • Inconsistent reviews / no review
  • Do not practice backcasting

“We need to put the vision on the table and have a plan” — Participant 7

A manufacturing enterprise of fewer than 50 employees often finds themselves accepting orders based on what they feel they are capable of filling. Likewise, they stop when they feel they are unable to fill the orders. They explained that machinery and workers are added as needed — there is no long-term plan in place.

CHARACTERISTICS OF ORGANISATIONS WITH 51- 100 EMPLOYEES

  • Desire for a change roadmap
  • Lack alignment on organization’s vision
  • Value people
  • Financial goals
  • Optimistic vision / goals
  • Could use better visioning
  • Reverse-planning of some sort

“It’s hard to be ready to adapt; things are always changing.” — Participant 3

A company in the medical industry finds itself shifting and adjusting its strategic goals almost every week. Company leaders find it difficult to be agile when needs, costs, regulations, and currency are changing around them.

CHARACTERISTICS OF ORGANISATIONS WITH 101–300 EMPLOYEES

  • Have some formal processes in place
  • Lack alignment on organisation’s vision
  • Emphasize inclusion (though it is not always possible)
  • Use visioning techniques
  • Ongoing strategy revisioning
  • Need reviews more often
  • Conduct a form of backwards planning
  • Culture frustrations
  • Top-down structure
  • Concern with environment trends/industry advancements
  • Had outside consultants

“People only buy into their slice of our vision and mission” — Participant 4

A not-for-profit enterprise with just over 100 employees has vision discussions led by the CEO. The CEO has been in the position for a long time and has a good idea of the vision for the company in their mind, though this mental model is not shared across the company. Visioning has been difficult because the foundation provides a range of services. They faced the challenge of getting members to align that had different backgrounds and had been working on different initiatives. Saying “it’s hard to articulate a vision that encompasses everything we do”, the participant explained the vision is broad to encompass all the services offered, but as a result, it often seems too broad.

CHARACTERISTICS OF ORGANISATIONS WITH 301–500 EMPLOYEES

  • Lack alignment on organization’s vision
  • Top-down structure

“We use [strategic planning techniques] on our clients but not on ourselves.” — Participant 5

A technology advisory company with 450 employees explained that they used strategic planning techniques, namely Osterwalder and Pigneur’s (2010) Business Model Canvas, and reverse-planning for value proposition offerings on their clients, though they have not used the same types of tools and techniques on themselves. This may be due to the client needs coming before their own, as is typical in client-focused organizations.

The Problem

In response to questions about how far they look into the future, the participating Ontario SMEs all stayed within 5 years of today. Five participants — over 60% — planned for one year into the future. Two participants planned 3 years into the future. Only one of the participants indicated that they plan up to 5 years into the future.

Currently, Ontario SMEs can only see a fraction of the whole journey.

This short-term planning is likely a result of a small business mindset; many participants mentioned that their strategy was to make money, implying a desire simply to stay afloat rather than have significant growth. SMEs may want growth, but they are not currently planning according to that desire. SMEs are banking on the future being consistent with today.

What if organizations had a way to co-create their future and align on steps to its achievement collaboratively?

SMEs need to see the big picture.

Infusing strategy development processes with foresight methodology ensures the strategy is futures ready — flexible for the range of challenges and opportunities the future may bring (Conway, 2016). Without a sound vision, changes do not add up in a meaningful way — they are not part of a bigger picture. Kotter (2007) explains that, “without a sensible vision, a transformation effort can easily dissolve into a list of confusing and incompatible projects that can take the organisation in the wrong direction or nowhere at all (p. 5)”. Foresight approaches allow strategy development to be an inclusive process: allowing its users to be authentically involved in the process of creating a shared view of their organisation’s future. A foresight approach considers a wider range of issues and change across industries. This can include emerging issues and general societal trends. They take a big picture perspective — a systems approach — to identifying and understanding change and look for systemic drivers of that change. Foresight can help mitigate uncertainty and leave an organisation feeling more confident planning for the long term.

SMEs need to see how their desired future can be attained.

Working backwards from a particular desired future end-point to the present, backcasting determines the physical feasibility of that future and the measures that would be required to reach that point. It helps businesses think about mitigation and responses to undesirable futures. Instead of getting stuck in the past or the future, businesses are encouraged to expand the possibilities for the future of the business in their minds and create an actionable roadmap to achieve it.

What insights can be gathered to inform the design of improved strategic planning?

The conducted research led to insights on what a successful solution should include. After collecting the background information, design thinking processes were applied to prototype a solution tailored to SMEs and their needs. Once insights were gleaned from each interview, comparisons led to themes. Themes were ordered according to impact. The most impactful were emphasized heavily in both the writing and the solution.

Solution Design

The solution development and design process included the following steps:

1. Identification of gaps in strategic planning processes of Ontario SMEs, as gleaned from insight themes

2. Development of solution success criteria from themes

3. Solution prototyping with iteration

4. Evaluation of success criteria

I designed a solution to fill the identified gaps, using a shared vision of the future as a means for transformational change. For more details on the research behind it, see (many of) my other Medium posts!

The proposed solution began as a tool on its own. Facing the problem of users using the tool incorrectly, it evolved into a workshop design. Upon realizing the influence of internal and external factors, the workshop expanded into a longer-term engagement including five phases. This was due to the needs that surfaced throughout the process: a need for organizational context, environment scans, and more opportunities for interaction in order to truly solve the challenges SMEs face.

I explored an approach starting with a desirable future state and mapping it back to today. This helped outline action items the organizations would have to take in order to achieve their desired future outcome.

The tool was developed and iterated upon several times. Feedback was sought from external parties with expertise in facilitation, backcasting, and organizational behaviour. The current tool is the result of many iterations, however, it remains a prototype that is expected to develop with its practice. The length of time and steps included in each phase of the process may vary depending on the organization. Staggered testing, starting with smaller organizations, is recommended for the engagement’s first field tests.

The Solution

I created The Backcast Canvas, a tool designed to highlight the attributes that make a desired future preferable and then outline steps to make it probable.

The use of Backcast Canvas is in a group setting, so I made a Facilitator’s Guide. The activities were designed to follow a pattern of divergence and convergence to expand thinking about possibilities then narrow in on priorities.

Value

I have since applied the five-phase Future Co-Creation Engagement when consulting for different clients seeking alignment on future long-term strategic planning.

I share the canvas with teams seeking alignment frequently and plan to sell remote workshop tools for its facilitation.

The research process, insights, and solution are compiled into the document below.

“Bigger Thinking for Smaller Enterprises” encourages SMEs in Ontario to acknowledge the possibilities of the future of their organization, align with other members’ mental models to co-create a desirable future, and use that vision to form the strategy required for its attainment. This project applies foresight methodology to address the challenge Ontario’s small and medium enterprises (SMEs) face regarding long-term strategic planning.

Role: Primary Researcher

Team Size: 1 + Supervisor

Time Frame: 9 months

Client: Master of Design Thesis/ Research Project

Methods:
Desk research
Research Ethics Board Application
Design Thinking Methodology
Semi-Structured interviews
Data Analysis
Synthesis
Solution Design and Iteration

Visual Design by Merwad Abdallah

Illustrations by Nandini Krishnamurthy

designs experiences, solves complex problems, fights for social justice, nerds out on AI ethics & futures

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