Bozeman is not thought of by many as a hub for entrepreneurs; Silicon Valley holds that title. Here in Bozeman, however, TechRanch was founded by John O'Donnell to be "a resource for entrepreneurs." Besides being a potential networking resource, TechRanch sponsors many events throughout the year that are geared towards small businesses working in startup mode. TechRanch Entrepreneurial Knowledge (TREK) events are held 24 times a year at TechRanch, right near the MSU campus.

Last week Professor William Malek of Stanford spoke at TechRanch. He teaches Advanced Project Management for graduate students. Besides working as a graduate professor, Malek founded Strategy2Reality, LLC, which is a leadership development firm.

His discussion, "Avoiding Potholes that Lead to Bad Execution" focused on a few of the points he makes in a book he recently co-authored, Executing Your Strategy: How to Break It Down and Get It Done.

He first discussed the idea that potholes in business may not seem like anything to worry about, but if you keep hitting them it will lead to disaster. The example he cited was that in the last few years the business world has experienced the largest turnover of CEOs in history. New ones are hired and fired at astounding rates.

Malek attributes this to today's world in which change happens all the time. Instead of planning for the next year's innovation and growth, companies are now adapting to the times and planning by quarter. In order to provide "sustained, strategic growth for shareholders," companies must be continually evaluating their strategy and how they execute.

When he consults with a business, Malek says that the first thing he asks its executives is, "What is your strategy?" Almost invariably, he said, each executive writes a different answer. Many executives, he says, are on different pages when it comes to strategy.

The first problem is that nobody knows how to define strategy. You can't know what your strategy is unless you and your management teams know how to define such a broad and critical term.

In what Malek calls the "Planning Potholes," his first pothole is "No Common Language." Malek focused on a definition by Michael Porter for strategy: "Strategy is about adding value through a mix of activities different from those used by competitors."

This is a business-oriented definition, but it is one that is critical to successful business planning. Having a common language in regards to strategy is important because it keeps every company leader on the same page, which filters down to the execution of each employee.

The next pothole is "No Common Framework." The importance here is that today's business environment is completely susceptible to change. Does your company have the framework in place to adapt on the fly to changes in the market? The answer for many would be, no.

He says that companies don't have properly "Integrated Systemic Planning." He said that today's "complexity requires circular iteration processes that are subject to constant revision and change." With proper systemic planning, companies are constantly revising their strategy. On a small scale this could be almost daily through business operations, but more broadly it is accomplished in quarterly strategic planning meetings - a major revision of the annual meetings of the past.

In addition, while many strategies revolve around budgeting, Malek argues that a company is already in trouble if budgeting is driving strategy. Cutting costs isn't strategy. It may be important, but it has nothing to do with adding value through innovative ideas.

Malek's main example of this is strangely appropriate and timely. He uses Southwest Airlines as a perfect example of a strategic framework. With three low-cost airlines going out of business in the last week, Southwest appears to have the right idea.

He showed a chart of Southwest's strategy, which contained different bubbles and lines to show they connect. It surprises many that lean baggage handlers contribute to cheap airline tickets, but Southwest thinks they do. Moving baggage quickly gets planes turned over quickly which leads to more flights. More flights running on time means happy customers who will return. More flights also means excellent utilization of their assets (planes), which means they are running an efficient operation.

Malek concluded by quoting Albert Einstein: "Everything should be made as simple as possible, but not simpler." That's an important point for small businesses finding themselves struggling to execute. Perhaps you need to simplify things, but be careful to not oversimplify in today's complex and changing world.