PROACTIVE VERSUS REACTIVE MANAGEMENT

A few years ago, you could establish and maintain a business by reacting to and meeting changes in tastes, costs and prices. This reactive style of management was often enough to keep the business going. However, today changes happen fast and come from many directions. By the time a reactive manager can make the necessary adjustments, he or she may lose many customers possibly for good.

Proactive planning is the anticipation of future events. Decisions are based on predictions of future states of the environment as opposed to reactions to various crises as they occur. Proactive planning in an unstable, technology-driven business environment is critical to continuing success in almost any endeavor. Rather than reacting to the situation as it changes, proactive planning requires that you analyze environmental forces and make resource-allocation decisions. By doing this you will take your business where it needs to be in the next month, year and decade. Barry Worth, a consultant specializing in small business management, puts it this way:

Today's entrepreneur must be a business architect. Anything built in today's business environment must have a step-by-step blueprint or plan on how to achieve success (Worth December 1989).

The blueprint for today's business owner is a business plan.