The Difference Between A Proactive & A Reactive Business Strategy

Posted by Brandon Henry on

The Difference Between A Proactive & A Reactive Business Strategy

The difference between being proactive and reactive is often the difference between success and failure. Having a proactive business strategy will make your business more flexible, more powerful, and more secure.

That starts with knowing what a proactive strategy is, and isn’t, and how to build one.

What Is A Proactive Business Strategy?

Simply put, a proactive business strategy is one that tries, as best it is able, to have plans in place that address unexpected situations. These could be positive situations, like consumer demand growing much more quickly than initially projected, or negative ones, like a cancellation from a client or vendor. It can be large events, like a recession, or small ones like multiple employees taking sick days. A proactive strategy seeks to address all of these.

This is in contrast to a reactive strategy, which has no plan to address these things and relies on in-the-moment decisions to respond to both crises and opportunities.

It should be stressed that “being able to react” is not the same thing as having a reactive strategy. If anything, your ability to react is going to be contingent on having the plans and resources ready to do so. Or, in other words, having a proactive strategy.

Why Have a Proactive Business Strategy

The benefits of a proactive business strategy should, for the most part, be self-evident. It allows you to have a plan in place when something unexpected happens, and commit or reallocate resources to address the needs of that situation.

Reactive business strategies are those that respond to some unanticipated event only after it occurs, while proactive strategies are designed to anticipate possible challenges. Because no one can anticipate every possibility, no organization can be proactive in every situation. However, businesses that emphasize proactive strategy are usually more effective at dealing with challenges.

Not having a proactive strategy can often mean missing out on vital opportunities, limping by with limited resources, and even failure.

How To Employ A Proactive Strategy

No plan survives first contact with the enemy, or so the saying goes. Which is to say, that having and employing a proactive strategy is not so much about knowing the exact shape that a challenge or opportunity is going to take, but rather about being prepared to meet it.

Let’s look at one of the examples we used previously: a cancellation from a major client. It’s something that will happen at some point during the lifetime of your business. That doesn’t mean that you should dedicate large amounts of valuable time to planning what you’ll do for each and every one of your client relationships if they should happen to end abruptly.

Rather, a proactive strategy means knowing that those cancellations could happen and first working to maintain those relationships rather than taking them for granted. It means not making any single client a make or break part of the success of your business. Finally, a proactive business strategy means having other clients and partnerships ready to go should a cancellation happen, by continuing to take referrals, run advertisements, and continuing to generate clients.

As another example, there may be times when a vendor is unable to fill an order for a variety of reasons. Being proactive means running enough of a surplus to cover a short delay in fulfillment, and knowing what other vendors could be contacted to fill a short-term.

Proactivity As A Practice

Most of the discussion of a proactive business strategy centers around the strategizing and having plans in place for unanticipated events. This is an important part of a proactive business strategy, but it shouldn’t be the only part.

A proactive business strategy should also play a significant role in your day-to-day operations. As mentioned previously, maintaining client relationships can (and should) be a large part of a proactive strategy, and is a big part of what an ongoing proactive strategy means. It’s not just having plans in place to prevent unexpected situations, it’s also knowing that certain things are much more likely if certain standards aren’t met, and working to meet and exceed those standards.

That means that quality control is also part of a proactive business strategy. If your business is waiting until you get complaints about the quality of a product or service to analyze and correct, you’re being reactive, and not proactive.

Maintaining employee relations is also a proactive business strategy. It costs significantly more to hire and train a new employee than it does to maintain an existing employee relationship. That means that you should be, wherever possible, making sure your employees are happy and healthy, and that your employment package is competitive to your industry.

Is It Ever Okay To Be Reactive?

Obviously you’re not going to be able to plan for everything. Sometimes an event will occur that you did not have a plan in place for. Being proactive does not mean never reacting to these events. If something negative happens to you, or your business you need to respond to it, plan, or no. Alternately, if a great new opportunity opens up for your business, you shouldn’t pass up on it just because you didn’t have a plan for that exact circumstance.

Having a proactive business strategy isn’t about never reacting. Things will happen to your business and the industry that need to be reacted to. It means giving yourself the resources and framework to be reactive on a smaller scale instead of simply ignoring the possibility that anything could change.

A good proactive strategy gives you the space to be reactive when the need arises but limits the number of situations and places where those reactive situations might occur.

In Conclusion

Having a proactive strategy is simultaneously more in-depth and more simple than you might first expect. Ultimately, it’s about thinking about the long term implications of your actions, and how to keep your business afloat amid small or large changes. It’s why thinking about your business and working ON your business is so important.

Older Post Newer Post