In the developed market economy, every well-managed business is expected to have a strategic plan; whereas, in the Czech Republic (a country in the center of Europe with an exciting history and also called the “heart of Europe”; capital Prague; population 10.5 million; area 78,864 km2) and the rest of the post-communist countries, which have such implemented management tools are too often overlooked and missing.

Unfortunately, the above statement about management practices in the Czech Republic is an unbiased description of the current state of affairs. However, times are changing and the days when running a profitable business was a relatively easy task are long gone.

This change had to come one day; but, with the onset of the current economic crisis, this change has come faster than many might have expected. Therefore, the existing management and business planning practices of most Czech companies face a major test. For those companies that have entered this more difficult economic environment well prepared, this could be a favorable time; But for those companies that have failed to modernize and update their management practices, their very survival may be at stake.

It goes without saying that in the 1990s, a person with an average level of education and average skills could start virtually any type of business and make money. Back then, most business plans were put together, as they say, “on the back of an envelope”; and, ignoring the less than legal entrepreneurial activities and the money made through them, most of these new ventures were successful. They typically did so without any comprehensive analysis of their local business environment, without any long-term vision or strategy, and without many (or very few) pre-defined basic business goals or plans to achieve them.

I remember a story where a colleague of mine came back from a meeting with one of our clients, a medium-sized company and the leading (if not number two) service provider in the field. The owner of the company, who is an emblem of the generation of entrepreneurs who grew their businesses in the first years after the fall of communism, in other words, a successful man, who is currently around 50 years old, and his manager Salespeople were discussing where tools like SWOT analysis, long-term business planning, and corporate strategy were mentioned. I was told that both the business owner and his sales manager had blank looks when these terms were mentioned. I couldn’t believe that two such successful entrepreneurs weren’t familiar with these concepts. It was almost hard to believe that a company with this kind of corporate management approach could do so well. To all appearances, from the outside it appeared to be a modern, well-run business that had no problem receiving orders from both the public and private sectors. However, internally it was working to the letter, without any long-term planning or business strategy. It was almost too much to begin an encounter with the state of many Czech companies today.

At the time, we were not being asked to judge how this client was running his business, which had somehow managed to function well for nearly two decades, or to tell him what to do. However, we wanted to prepare them in terms of his ability to assess possible future risks to his business and help him maintain his position in the market and continue to grow in the future. At that time, our client may not have felt the need to come to us and request the use of some of our services; however, when times get tough, with orders low and harder to come by, it is the companies like the one I just described that will come to us, asking for advice. We’ve seen how a tough economy can meet a company desperately trying to hang on with rash and impulsive decisions, often coming too late and ignoring the long-term big picture. Such hasty decisions, without in-depth analysis or proper management, can generally, and especially in the current environment, lead to financial losses, which could have been easily avoided or at least mitigated.

Unfortunately, the business example above is not an isolated situation. Rather the complete opposite. But, in the sense that the glass may be half full (rather than half empty), the example above points to the opportunistic tools that the Czech business community now has at its disposal to help its businesses succeed. Strategic planning and strategic management, a wide range of business analysis and market research methodologies and approaches can be combined with creative thinking to produce long-term visions and long-term goals to guide the management of each and every business. Unfortunately, the use of these tools and concepts is still confined to a small percentage of the business community and those companies that use them tend to be the ones that set the new trends in the market and those that are able to maintain their long-term profitability.

By taking the ‘glass half full’ approach, Czech companies can look forward to a very successful future. Competitors operating in the same segments of an industry have a greater opportunity to get ahead of the others and those who begin to harness and put to use the concept of strategic planning and related business tools can expect to gain a competitive advantage.