The Critical Need for Flexibility in Strategic Planning

Small and Middle market companies face distinct challenges that necessitate a flexible strategic approach, including:

• Resource Constraints: Unlike large corporations, small and middle market companies have limited resources. This constraint necessitates efficient allocation and a high degree of adaptability to maximize returns on investments.       
• Market Volatility: The market environment is increasingly volatile, with rapid changes in consumer preferences, technological advancements, and competitive dynamics. Companies must be nimble to navigate these shifts effectively.
• Growth Ambitions: These companies often aim for substantial growth, which requires balancing risk and opportunity, along with capital availability. Flexibility in strategic planning allows them to pivot quickly when new opportunities arise or when faced with unforeseen challenges.

The Case for Flexibility

1. Adapting to Market Changes. Flexibility allows companies to respond swiftly to shifts in demand, competitive pressures, and technological advancements. Static strategic plans can quickly become obsolete, while flexible plans enable timely adjustments that keep the company aligned with market realities. For instance, during the COVID-19 pandemic, many small and middle market companies had to rapidly pivot their business models. Those with flexible strategies were better equipped to transition to e-commerce, adapt supply chains, and meet new consumer needs.

2. Capitalizing on Opportunities. A flexible strategic plan allows middle market companies to seize these opportunities swiftly. Whether it's entering a new market, launching a new product, or acquiring a competitor, being able to pivot quickly can be a significant competitive advantage.

3. Managing Risks. Flexible strategic planning enables companies to implement contingency plans and react promptly to unforeseen events. This proactive approach can safeguard the company against potential downturns and position it to thrive in adverse conditions.

Steps to follow for Implementing Flexibility in Strategic Planning.  Incorporating flexibility into the strategic planning process involves a combination of mindset, processes, and tools:

1. Embrace a Growth-oriented Culture. A growth mindset encourages continuous learning and adaptability. Leaders should foster a culture where employees are encouraged to innovate, take calculated risks, and learn from “fast failures.” This cultural shift can make the organization more responsive to change.

2. Regular Review and Adjustment. Strategic plans should not be static documents. Regularly reviewing and adjusting the plan based on current performance and market conditions is crucial. Mead Consulting Group recommends that client companies perform quarterly, or bi-annual reviews can help ensure that the strategy remains relevant and effective.

3. Scenario Planning. Scenario planning involves envisioning various future scenarios and developing strategies and action plans for each. This approach allows companies to prepare for a range of possibilities, making them more resilient to unexpected changes. It’s particularly useful in navigating economic uncertainties and market disruptions.

4. Agile Models. Agile models and methodologies can be applied to strategic planning. This involves breaking down the plan into smaller, manageable components and iterating on them regularly. Agile planning encourages feedback, rapid iteration, and continuous improvement.

5. Leveraging Technology. Technology can play a significant role in enhancing flexibility. Data analytics, for instance, can provide real-time insights into market trends, customer behavior, and operational performance. Leveraging such tools allows companies to make informed decisions swiftly and accurately.

Some examples:

1.     A mid-sized manufacturing client faced declining demand for its traditional products during Covid. By adopting a flexible strategic plan, the company was able to pivot to producing medical supplies during the pandemic. This quick shift not only stabilized revenues but also opened up new growth avenues.

 

2.     Another manufacturing company, specializing in automotive parts, experienced a downturn due to decreased demand in the automotive industry. Utilizing a flexible strategic plan, the company explored new markets and diversified its product offerings. They identified an opportunity in the renewable energy sector and began producing components for wind turbines and solar farms This strategic pivot opened up new revenue streams and positioned the company as an innovator in a growing industry.

_________________________________________________________

Companies must prioritize flexibility in their strategic planning to remain competitive and resilient. The Mead Consulting Group utilizes a strategic growth and execution process that promotes flexibility and a regular review process to update the Client’s strategies to the current realities in the market. If you would like to discuss how to build flexibility into your company’s strategic planning and execution process, please email me or call me at (303)660-8135. 

Best regards,

Dave Mead                

Navigating uncertainty: 9 Steps for Business Owners and CEOs entering 2024

 

Navigating uncertainty: 9 Steps for Business Owners and CEOs entering 2024  [Editor’s Note: Happy New Year! As we enter 2024, uncertainties loom large for Business owners and CEOs. Navigating these uncertainties requires strategic foresight, adaptability, and a proactive approach. This article explores what business owners and CEOs should do to prepare for the uncertainties that may arise, ensuring sustainable growth of revenue and profitability in the face of challenges. We hope you find this thought-provoking. –dpm]  1.      Conduct a Risk Assessment and Develop Scenario Plans:  Business owners and CEOs should start by conducting a thorough risk assessment. This involves identifying potential risks across various aspects of the business, including economic factors, market dynamics, technological changes, regulatory shifts, and geopolitical. By understanding potential challenges, leaders and their teams can develop proactive strategies to mitigate risks and fortify their businesses against unforeseen events. Remember, you need to plan for not only what you think will happen, but also examine plans for what you don't think will happen.  2.      Foster a Culture of Adaptability (Flexibility and Agility): In times of uncertainty, adaptability becomes a key differentiator. Business owners should cultivate a culture that embraces change, encourages innovation, and fosters adaptability among employees. The ability to adapt quickly to changing circumstances allows companies to stay ahead of the curve. Business owners should encourage flexibility within their organizations, fostering innovation and a willingness to embrace change. This may involve revisiting business models, exploring new markets, or diversifying product and service offerings. This may also involve implementing flexible work arrangements, encouraging continuous learning, and being open to feedback from all levels of the organization.  3.     Invest in Technology and Innovation:  In the rapidly evolving technological landscape, businesses that fail to embrace innovation risk falling behind. Business owners should invest in staying technologically relevant, whether through adopting new tools, automating processes, data analytics, or incorporating emerging technologies such as AI. This not only enhances operational efficiency but also positions the business to adapt quickly to industry changes and evolving customer expectations.  4.     Diversify Supply Chains: The global supply chain disruptions of recent years highlight the importance of diversification. Business owners should assess and diversify their supply chains to mitigate the impact of potential disruptions, such as geopolitical tensions, natural disasters, or unforeseen economic downturns. Building relationships with multiple suppliers including local sourcing can enhance supply chain resilience.  5.     Focus on Talent Management: Attracting and retaining top talent is a perennial challenge, and it becomes even more crucial in uncertain times with chronic labor shortages on the horizon for the next decade. Prioritize talent management by creating a positive workplace culture, offering competitive compensation packages, and providing opportunities for professional development. Equip your employees with the skills and knowledge needed to navigate challenges. Foster a culture of continuous learning and adaptability. Additionally, effective communication is crucial to keep your team informed and engaged.  6.     Financial Resilience: Business owners should focus on building financial resilience by maintaining a healthy cash flow, reducing unnecessary expenses, and diversifying revenue streams. Creating a financial contingency plan that includes a buffer for economic downturns or unexpected expenses will provide a safety net during challenging periods. Consider securing lines of credit to provide a financial buffer. Make adjustments to align with the economic conditions.  7.     Focus on your customers: During uncertain times, understanding and meeting customer needs become even more critical. Engage with your customers to gain insights into their evolving preferences and expectations. Leverage customer feedback to enhance your products or services. Building strong customer relationships can create a loyal customer base that remains committed to your products and brand.  8.     Stay Informed About Regulatory Changes: The regulatory landscape is dynamic, and changes in regulations can significantly impact business operations. Stay informed about relevant regulatory developments in your industry and geographic region. Establishing a compliance monitoring system, maintaining a presence in trade groups, and building relationships with relevant legal professionals can help ensure that the business adapts swiftly to any regulatory changes.  9.     Watch out for Disruption: Maintain scans across your industry and tangential developments to be aware of possible disruptive trends and companies. Most disruption occurs during periods of uncertainty when customers are eager for anything that is better, faster, cheaper.  ____________________ We can help. At The Mead Consulting Group, we work with many clients as Strategic Business Coaches. As coaches, we can help CEOs and Business Owners prepare for uncertainty and help them to keep focused on the prize - better business outcomes. Check out our website for descriptions of some client success stories.  If you would like to discuss how we might help your company begin the process of adding value and moving your company to the next level of performance, please contact us for a free consultation.  Best regards, Dave Mead

Barrier#6: Lack of true accountability - Overcoming Barriers to Planning and Execution

 [Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to successful Planning and the Barriers to successful Execution. We are continuing a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each. We continue with Barrier #6. -dpm]

Overcoming Barriers to Planning and Execution -

Barrier#6: Lack of true accountability

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.



Barriers to Planning Success

•          History of only partially developing plans
•          History of unreasonable expectations and unachievable goals
•          Lack of internal understanding about customers, competitors, and the market

 

Barriers to Execution Success

•          Gaps in management depth
•          History of abandoning projects
•          History of lack of openness and poor communications
•          History of poor delegation and leadership development
•          Lack of true accountability

Barrier#6: Lack of True Accountability

We have a saying at Mead Consulting: " A good plan flawlessly executed beats an excellent plan poorly executed every time"

What are the characteristics of this barrier in an organization? Do any of these look familiar?

• Unclear Vision and Direction: Employees do not know keys to company success- or they all have different views as to what they are.
• Goals may be unclear, confusing, or there are too many different goals
• "We keep adding initiatives and projects and never take anything off the list."

• Micromanaging or Command and control: Employees do not feel they have control over how to deliver results

• Lack of Job Understanding or Training: "I have never been shown what is expected"; "I didn't receive any training"

• Employees don't know where to go for help

• Employees feel Undervalued: "No one cares about my opinion." People do not feel their opinion is valued - that is, every employee

• People do not feel comfortable delivering bad news such as the "project is behind schedule" or "we have a major quality problem." So they ignore or sugarcoat things.

• People do not feel trusted.
• "I am not confident my efforts will be rewarded"
•  "I suspect that my manager (or the company leader) may take advantage of me"
• "I question my manager's (or the company leader's) motives"
• "I am sure they will take credit for my accomplishments"

• Departments do not cooperate with each other. We constantly practice the "blame game"

• Employees are Not Engaged - "People do just enough to get through the day."

• Loyalty and seniority are valued higher than performance

The impact on an organization - A lack of accountability can paralyze an organization

Overcoming this barrier - Strategic Planning and establishing action plans is not worth much in an organization that lacks accountability. Why spend time and resources developing strategic initiatives if you can't hold the organization accountable for achieving them. The Mead Consulting Group doesn't start strategic planning and execution in an organization without a clear path to accountability.

Additional Resources -We ran a series of articles in 2018 on Accountability

 

·    Is a Lack of Accountability a Problem in My Organization

·     Am I Part of the Accountability Problem in My Organization

·   Starting Down the Path to Greater Accountability

·   Top 5 Accountability Pitfalls

Identifying the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution.

Our Customer Forward TM Strategic Growth & Execution process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement - then laying out the best strategic path. Finally, validating that strategic growth & execution plan with customers and the market.

If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com.

Overcoming Barriers to Planning and Execution - Barrier #2: History of abandoning projects

[Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to succesful Planning and the Barriers to succesful Execution.We are continuing a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each. -dpm]

Overcoming Barriers to Planning and Execution

Barrier #2: History of abandoning projects

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.



Barriers to Planning Success

•          History of only partially developing plans
•          History of unreasonable expectations and unachievable goals
•          Lack of internal understanding about customers, competitors, and the market

 

Barriers to Execution Success

•          Gaps in management depth
•          History of abandoning projects
•          History of lack of openness and poor communications
•          History of poor delegation and leadership development
•          Lack of true accountability

Barrier #1: History of abandoning projects

Many business owners and senior managers are brimming with creative ideas. In some cases, each idea may have its own merits, but an organization can drown in a constant sea of ideas. Some organizations start many projects and directions, only to have them superceded by the next new projects. Some folks call it, "the CEO read a new book" syndrome.

So one quarter, an organization is headed in one direction, and then abruptly next quarter, there is a new, "better" direction. Some times it is the tendency to chase the next "shiny rock"; in others, it's listening to another business owner in a peer group that has a better idea.

The impact on an organization is paralysis. Managers and employees become conditioned that there will be a next new thing. So they duck down and wait for the current one to be "bow over" or be abandoned. No one gets seriously committed because they don't expect the direction or project to survive the test of time. No one can be expected to go above and beyond if they expect their efforts will never see completion. It facilitates a sort of "quiet quitting" or lack of engagement.

The result is at worst failure of the plan; at best, its execution is woefully suboptimal.

Overcoming this barrier is relatively straightforward - Going through a facilitated structured planning process can ensure that an organization has its bases covered before getting started with execution. We have found that organizations that develop 3 strategies - with clear action plans to achieve the desired result - are far more successful than organizations with 10 strategies.

Develop a "What we are not going to do now" list. The most difficult thing for many companies to do is prioritize. Even more difficult is to establish a list of projects or strategies that will not get done now, - and to stick to that list. Smart companies will insist that in order to take of the "NotNow" list, they must take something off the "Do Now" list.

Understanding the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies that have had years of poor planning and execution history, find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution. Our Customer Forward^TMStrategic Growth & Execution  process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement. If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com. 

Please comment 

Best regards,

Dave Mead      

Overcoming Barriers to Planning and Execution - Barrier #1: History of only partially developing plans

 [Editor's Note: In Issues for Growth Vol. 31, No.11, we asked the question, "Are there barriers blocking your successful growth and execution?" We then listed the Barriers to succesful Planning and the Barriers to succesful Execution.We are starting a series of Issues for Growth where we will tackle each of these barriers and identify ways to overcome each.

Overcoming Barriers to Planning and Execution

Barrier #1: History of only partially developing plans

Over time, every organization will create barriers to success. The very things that made you successful as a startup or growing organization may prevent you from being successful at the next level.



Barriers to Planning Success

•          History of only partially developing plans
•          History of unreasonable expectations and unachievable goals
•          Lack of internal understanding about customers, competitors, and the market

 

Barriers to Execution Success

•          Gaps in management depth
•          History of abandoning projects
•          History of lack of openness and poor communications
•          History of poor delegation and leadership development
•          Lack of true accountability

Barrier #1: History of only partially developing plans

Many organizations are moving so fast that they embark on a strategy or project and are so excited to get started, they fail to adequately think through a plan.

Many times this means the following:

*The desired outcomes are not clearly defined

*There is no clear definiiton of success

*No project plan (Process and timelines are unclear)

*Appropriate resources are not identified and allocated

*Team is not identified, including the owner

*No mechanisms to keep plan progress in focus

Why this is important to future strategic plan development?: Companies with a history of not fully developing plans create an expectation of failure with their team. They have seen too often the "Fire, Ready, Aim" approach to rushing to start before the organization is ready and has thought through the plan.

Overcoming this barrier is relatively straightforward - Going through a facilitated structured planning process can ensure that an organization has its bases covered before getting started with execution.

Understanding the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies with years of poor planning and execution history find that their organizations are far more capable than they ever imagined of achieving superior results.

The Mead Consulting Group has helped many companies identify and overcome the barriers to successful planning and execution. Our process is simple and effective at uncovering the key obstacles and barriers and developing recommendations for improvement. If you would like to have a conversation about this, please contact Dave Mead at (303)660-8135 or meaddp@meadconsultinggroup.com. 

Please comment

Best regards,

Dave Mead        

Four Possible Scenarios of the future: How would your company respond?¹

[Editor's Note: When we initially published this article in 2008, most business leaders were still expecting a "normal" recession and recovery cycle. We now know that we have seen a combination of uncertainty and slow growth. While many companies have reacted relatively passively, some are changing the dynamics. I hope you find this useful. - DPM]

 

Four Possible Scenarios of the future: 

How would your company respond?¹

 

1. Paralysis/Survival: This describes a situation where external events will be unknown and surprising, and companies will respond to them in a predominantly passive and reactive manner.

 

This, clearly, is the worst-case scenario. In this situation, "unexpected and disruptive events will increase over the next three years, and companies (and/or economies) will react by pulling into a protective shell." The external shocks could include economic developments such as the nationalization of major global industries (like oil, banking, auto) and significant disruptions to global material flows. On the political front, terrorist attacks could escalate in different parts of the world, and the U.S. led anti-terrorism coalition could fall apart. Isolationism and protectionism may be revived. Companies (could) react by trying to protect existing assets with layoffs, reduced R&D investment, reduced product development, and lower foreign direct investment. Consumers may compound the problem by reducing spending dramatically.

 

  The bottom line in this scenario: A long, global recession

 

2. Slow Growth:This scenario predicts a future where external events will be known and expected, but companies will respond passively to them.

 

This, too, is a grim scenario, though not as irredeemably dismal as the previous one. In this case, "disruptive events with moderate impact continue, and while seen as normal, they result in an economic malaise." This scenario would be marked by debt and currency problems in key world economies, though a full-blown long-term global recession is avoided. Unemployment would be higher but manageable, but consumer confidence would be low. Politically, the war against terrorism could head toward a stalemate situation. Companies would get used to the risks of terrorism and learn to cope with their losses. They would make modest investments.

 

The bottom line in this scenario: Life becomes an overpowering shade of gray

 

3. Thriving With Chaos: Here, external events will be unknown and surprising, but companies will respond mostly in an active and opportunistic fashion.

 

In this scenario life is still gray, but sunlight begins to filter through the gloom in some areas. "Unpredictable disruptive external events" would continue, but "corporate and national resolve to be successful in the face of adversity" would drive modest prosperity. While uncertainty would continue, it would be considered a cost of doing business. Companies would try to seize business opportunities amid the disruption and uncertainties, and make increasing investments in areas that seem to be potentially profitable. In the political arena, the continued global realignment of the U.S. with Russia and China would continue to open up new market opportunities, but the Islamic and developing nations would be shut out of these new alliances. The war against terrorism would continue without a clear victory.

 

The bottom line: Life could be better, but there's money to be made if you know where to look.

 

4. Global Growth: In this scenario, external events will be known and expected, and companies will respond actively and aggressively.

 

This, clearly, is the best-case scenario, one in which "countries and peoples of the world recognize common goals and focus on economic development and peace as the route to permanent stability." The key features of this scenario would be that the recession proves short-lived and the business cycle would return to normal; the global coalition against terrorism would evolve into a coalition for peace and commerce, and the threat of terrorism would fade. Investments in new technologies for energy management would reduce the role of oil in Middle Eastern politics. Consumers would feel confident about the future, increase their spending, and lay the foundations of a sustained economic recovery. Trade barriers would be lowered and the developing economies would grow in tandem with the developed ones.

 

If these four scenarios - or a combination of them - represent what lies ahead in the next three years, what strategies should companies put in place today to deal with them?  Clearly, though, neither these scenarios nor the strategies that follow from them will apply across the board. The scenarios will play out differently not only in different industries, but also in various regions of the world. Accordingly, the strategies that companies develop to cope with these situations will need to vary to reflect these differences.

 

It would be a mistake to allow the uncertainties that prevail today to put business decision making on hold. The future may be unclear, but one thing is certain: In today's circumstances, scenario planning is more than a tool. It is a weapon to combat uncertainty, and the future will belong to companies and executives that wield it well.   

      

How well is your company prepared to respond? Are you taking control of the things that you can? Are your actions strengthening your company  - or weakening it? Are you building flexibility into your plans? Have you changed your approach to planning?

The Mead Consulting Group helps dozens of companies and organizations - like yours - every year with scenario planning. The process has helped our clients consistently outperform  their competition.

 Please comment

Don’t be held back by past success

The greatest challenge can be the SECOND strategic success.

By David P. Mead

The business is profitable. It generates cash. There seems to be no end to new ideas and plans to invest and grow the company. But ideas seem to almost never get evaluated, or if evaluated, never are seriously considered. The company continues to focus on the familiar strategy, with the founder maintaining, “This is what got us here.” Many small and midsize businesses can be held back by past success. Their early strategies are so powerful and deeply ingrained in the fabric of the company that change is all but impossible.

Continuous rebuilding of strategic direction is not only healthy, but important to company growth. Where once a change in strategic direction occurred every generation or two, the pace of change now requires a new direction every three to five years…much faster in technology industries. Yet we find that “strategic renewal” is rare in closely-held entrepreneurial companies. The reason can often be traced to the source of their success.

The business strategy which ultimately emerges from the entrepreneurial survival phase is the product of years of trial and error. The successes and failures of personal interaction with customers, products and markets forge the confident and unshakable strategic view of the founder. Entrepreneurs with highly creative and successful strategies are often so charismatic and strong-willed that few managers have the self-confidence to challenge by fighting for fundamental change. Admiration and respect for the accomplishments of the founder can also discourage open disagreement. After all, if the strategy could be improved, wouldn’t the founder have already done so?

There is another reason that strategic change is difficult in successful entrepreneurial organizations. The founder surrounds himself or herself with people who believe in the founder. These people tend to view the world in the same way. This homogeneous group is reinforced through hiring, training, and leadership. The similarities are further strengthened by a shared company culture. This singleness of purpose helps greatly as the founder’s initial strategy fosters rapid growth, and consistent delivery of products and services is essential. These people are the implementers of the founder’s vision. However, when a fundamental change to strategic direction is necessary, these same implementers are not likely to contribute a creative perspective. They are more likely to review the reasons for past success than they are to visualize a different future.

In short, the founder’s creative strategic insight and charismatic organizational leadership will typically create blinders to the urgent need for fundamental change. When everyone shares the same perspectives and experiences, we have a very vulnerable business – even if it is successful today.
Studies of the strategies of entrepreneurial companies confirm this. The founder invents a great business concept. New strategies, however, rarely emerge until a new generation of leaders emerges. If talented potential successors eagerly advance their new strategies before they are in control, painful, destructive conflict often results.

Founders of successful companies have found ways to avoid the pitfalls of strategic stagnation:

• Share the credit for past successes. Describe them to the organization as group insight rather than as “my strategy”. Stress that change is critical to survival. Express frequent concerns about competitive threats to the current ways of doing business. Do not let anyone become comfortable with the status quo.

• Celebrate the diversity of opinion in the organization. Look for ways to recruit new people with different backgrounds and experiences into the company. Consider hiring people outside your industry.

• Make strategic planning everyone’s responsibility. Encourage everyone to challenge current strategic assumptions. In management meetings, ask everyone to identify the critical assumptions for continued success. Ask your outside board of advisors, or outside board of directors to question your intended sources for future growth.

• Be open to new ideas. Be “non-defensive” in your thinking. Encourage “non-linear” thinking and “what if” questions. Avoid justification of past actions or quick responses such as “we tried it before and it didn’t work.”

• Don’t accept a poor economy as an excuse! Too much credit is given to strategies that succeed in a good economy, but cannot hold up during a poor economy. Don’t accept a poor economy as an excuse. Make your company and its management stand on its feet regardless of the economic climate.
The greatest challenge for an entrepreneur to create the second strategic success. The critical review of the reasons for past success is a vital part of the process. If the founder and leader of the organization will demonstratively lead the challenge to his or her own aging strategic insights, new ideas and perspectives will be encouraged and the company will profit from consideration of a greater number of strategic alternatives.

Colorado success stories: Smashburger

Editor's note: This series of interviews with Mead Consulting clients and friends focuses on companies that have succeeded during the recession through disruptive innovation, new business models, or superior execution. The stories are told by the CEOs and business owners themselves. This article was first published on March 22, 2011 in ColoradoBiz magazine or you can read it below.

Smashburger is the fastest three-year start for a restaurant company - in history - to almost $135 million in system wide sales. I recently spoke with Smashburger CEO Dave Prokupek about the appeal and trajectory of the company in the midst of the worst recession in a generation. He will be among the featured speakers on April 27-28, 2011 at the Rocky Mountain Corporate Growth Conference.

Why would someone invest $20 million in a new hamburger chain?

While it might seem, illogical, we saw several factors that made this business very appealing. First, research showed that while the hamburger was America's favorite food, people were dissatisfied. There was opportunity in the ‘better burger' category - a segment which is projected to double over the next decade. Second, we saw an opportunity for a disruptive innovation with a new restaurant model that we believe will be the model of the coming decades. The model has a small footprint (about 2,000 square feet), sit-down service, good food, beer and wine service, and fast service (average 23 minutes).

You're not competing with McDonald's and Burger King. Who is the competition?

We don't primarily compete with the big three burger chains which control 70 percent of the market. In the "better burger" category we compete against Five Guys Burgers and Fries, the local Bar & Grill, or casual dining restaurants like Red Robin or Applebee's. Interestingly, our biggest upside surprise is that about half of our customers say they would have gone to a non-burger sit-down restaurant such as PF Chang if they hadn't dined at Smashburger.

To what do you attribute for the fast growth?

We had a better idea and are very well capitalized. We took advantage of the recession and have been able to make very good real estate decisions and attract very talented, experienced people. We started franchising very early - after only four stores. Since it requires a relatively low investment to open, Smashburger locations offer a superior return on capital. We were able to attract 32 of the top restaurant franchise companies which committed to open 450 locations and who currently manage over 650 restaurants. These companies had the capital so that they could expand aggressively during the recession without the need for bank debt. These franchise partners see Smashburger as a better use of capital than other restaurants. Today, we are about 50 percent franchised vs. company-owned locations. Over the next five years, we expect that to flip to 60 percent-80 percent franchised.

That addresses the business-side of your growth, what attracts the customers?

Consumers give us high marks for ‘great food' (93 percent) and ‘friendly service' (94 percent). The 'smashburger process' seals in the juices so it's a great burger. We recruit and screen our employees for friendliness and a service personality, and we train to a casual dining hospitality standard-of-service. We have secret shoppers in our restaurants every week. We also offer a cash bonus to server crews for high service marks and the cooks for speed and accuracy. Over 90 percent of our customers say they will visit us again.

What are your biggest challenges?

Maintaining culture and consistency as we grow. We continue to recruit from top restaurant companies to help manage the growth. We look out two years and hire people with the potential to rise two to three levels in the organization.

We recently instituted what we call our "high fives": excite and delight, perfect food, pride in place, ‘it starts with me', and ‘do well, do good'. These ideas reflect the core values of Smashburger that we want to reinforce every day with every customer. We are very consumer and metrics-driven. We measure and reward the attitudes and results that are important to our continued success.

You have an interesting blend of people with restaurant experience as well as those with other backgrounds?

It's about 50 percent/50 percent. We think that helps blend new ideas and approaches with the critical restaurant expertise. We recently have developed a training and modeling program which pairs very bright, talented "30 somethings" with our senior executives to accelerate their experience and growth to be able to fill future leaders.

What keeps you awake at night?

We have some clear advantages. Being well-capitalized is a clear differentiation. We have to continue to be smart with real estate decisions, especially in new international markets. We need to continue to stay on top of consumer trends - continually innovating our offering including our food. We launched the brand very cost effectively essentially with social media, PR, and active cultivation of the ‘food bloggers: and our fans.' We need to continue to develop that social media capability and connection.

So what's ahead for Smashburger over the next five years?

We are focused on building the #1 brand in our space. International expansion is a key strategy. We are currently looking at Canada, Australia, London, and the Middle East. We are evaluating whether we will offer a localized menu or western menu in each location. We already offer a specialized local burger in each of our U.S. markets. We have tremendous upside - we plan to be a $500 million revenue company within the next few years