Avoid Bad Strategy: How SMEs Can Diagnose and Solve the Real Business Problem
Hi, I’m Aby
Welcome to The Strategic Billion Dollar PEN, your weekly business strategy newsletter designed to equip SME business owners and founders with the clarity, confidence, and competitive edge to grow and scale with purpose—successfully.
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Then it’s time to turn strategy into your superpower—the fuel behind every bold move, every sharp pivot, and every win that leaves your competition scrambling.
Stop Chasing Vision—Start Solving the Problem That’s Killing Your Business
In a city built to impress but not always to endure, real strategy isn’t about scale—it’s about knowing which crack to reinforce before the whole thing buckles. For SME owners, survival starts with choosing the right problem, not chasing the loudest one.
This week we continue our study of strategy, drawing insights from the [3] article How Leaders Become Strategists: The Crux and the podcast [7]. We explore how to define a good strategy and why this is critical for SME business owners and entrepreneurs. Strategy is not about vague ambition—it’s about identifying the main problem, teasing out the crux, and mobilizing capabilities to solve it and achieve results.
SME leaders must ask: What is the real business problem causing the headache? Once the crux is identified, resources—financial, human, and operational—must be aligned to resolve it. This approach is far more effective than reactive tactics like “just paying the bills” or “meeting payroll,” which often mask deeper strategic issues. Whether facing market stagnation, mounting debt, or competitive pressure, SMEs must apply this principle to avoid failure.
As discussed in the article [6] and podcast [7], strategy is problem-solving. It is not a mission statement, vision, or financial target. It is the deliberate choice to solve a specific problem that threatens the business’s ability to function. Strategy demands capability—talent and resources—to execute effectively. This is especially vital for SMEs, where 50% fail in the first year and another 20% within three years. A good strategy [2] is the difference between survival and collapse.
SME Strategy Playbook: Solving the Right Problem to Scale Your Business
This playbook is your survival kit—built for SME owners who refuse to guess their way through growth. It’s about diagnosing the real problem, attracting the right customers, and locking in market fit before momentum stalls
- Strategy Clarity Definition
The strategy must be clearly defined. If the business cannot solve the crux of the problem, it should not pursue it.
SME Takeaway: Define the problem you can solve. Leave the rest. - Strategy Diagnostic Methodology
Use a method to identify the main problem and its crux. Once chosen, all resources must be focused on solving it.
SME Takeaway: Choose one resolvable problem. Focus relentlessly. - Strategy Talent and Capability
Engage strategists who know how to define and solve the right problem.
SME Takeaway: Don’t waste time or money on misaligned strategy - 360° Strategic Planning and Execution Alignment
Align execution with the crux. Avoid wasting resources on surface-level issues.
SME Takeaway: Solve the knot, not the noise. - Strategy Is a Journey and PESTEL-Aligned
Strategy must adapt to sudden changes—economic, market, or industry. Learn to pivot.
SME Takeaway: Build agility into your strategic DNA. - PESTEL Strategy Sensitivity
SMEs must be sensitive to Political, Economic, Social, Technological, Environmental, and Legal shifts.
SME Takeaway: Scan the horizon. Strategy is not static.
Strategic Takeaway
SME owners must understand what strategy is—and what it is not. It’s not branding, vision, or financial goals. It’s solving the right problem at the right time. Engage the right talent. Use diagnostic methodology. Think Nike vs. Reebok: Nike solved the performance identity problem; Reebok chased trends as discussed in [8]. One scaled. One stalled.
Flight 78910™ SME Spotlight: Marc Randolph
VIDEO FEATURE: The Man Who BUILT Netflix Into a $300B Streaming Giant
This week, we highlight Marc Randolph didn’t just co-found a streaming service—he disrupted an entire industry. Faced with gatekeepers, outdated models, and early rejection, he doubled down on experimentation and strategic pivots. Netflix didn’t play by the rules—it rewrote them. Marc’s journey is a masterclass in crux-first thinking, fearless execution, and knowing when to jump before the market catches up.
Highlights for SME Business Owners
1. Identify the Problem and Its Crux
Marc nailed this early.
SME Takeaway: Clarity beats complexity.
2. Align Ideas with the Problem
Misalignment leads to wasted effort and missed pivots.
SME Takeaway: Market fit is everything.
3. Be Comfortable Pivoting
After Blockbuster’s rejection, Netflix had to jump or drown.
SME Takeaway: Strategic discomfort is a survival skill.
4. Focus on What Moves the Needle
Randolph zeroed in on scalable value.
SME Takeaway: Don’t chase noise—chase leverage.
Apply the Playbook → What’s Your Next Strategic Move?
You’ve defined the crux. You’ve diagnosed the real problem. Now it’s time to commit.
If your strategy still feels fuzzy—or if you’re juggling too many priorities—pause, diagnose, and refocus. Need help applying the right strategy for your SME business? Email: [insert contact]
Conclusion
Marc Randolph’s Netflix journey mirrors Rumelt’s strategic principles: define the crux, commit to solving it, and pivot when needed. As Rumelt warns in the McKinsey article, bad strategy is a social contagion—ambition masquerading as strategy. SMEs must resist this trap. Strategy is not theatre. It’s a choice, a commitment, and a capability.
References
- Getting strategy wrong—and how to do it right instead | McKinsey
- Why Start-ups Fail
- getting-strategy-wrong-and-how-to-do-it-right-instead.pdf
- Youtube link
- How leaders become strategists The Crux
- What is strategy? Richard Rumelt on good v. bad | McKinsey
- 134. Richard Rumelt on what se… – Inside the Strategy Room – Apple Podcasts
- The Key to Sustaining an Enduring Competitive Advantage – HBR On Strategy | Podcast on Spotify
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Until next week—
Set bold strategy. Set big targets. Take massive action. Measure what matters.
About the Author
Aby Rufus
Business Investor Strategy Expert Entrepreneur with an MBA in Strategic Planning—offering billion-dollar strategic solutions for SMEs.
