Small and medium businesses are the backbone of the economy. These sectors account for over 99% of all businesses in the European Union and approximately two-thirds of private sector employment (European Commission 2024, 8). Despite their importance, SMEs face challenges in using structured strategic frameworks. Although there are multiple frameworks such as SWOT, PESTEL and Porter’s Generic Strategies, these have been developed with large-scale businesses in mind. This makes them difficult and time-consuming for SME owners to adopt. For owners working 60 to 70 hours a week managing operations, staffing, and cash flow, these frameworks are not realistic.
A bachelor’s thesis completed at LAB University of Applied Sciences in 2026 set out to fill this gap by developing a simple, practical strategy framework that any SME owner can use without specialist knowledge or considerable time investment.
Why does the gap exist?
The study combined an academic review of five major strategic management frameworks with an online survey conducted in spring 2026. The main target audience of the survey was SME owners, founders, co-founders, and business consultants in Finland. The survey was distributed to 104 respondents, with a response rate of 21%, through direct email messages, LinkedIn messages, and the author’s personal connections.
Quantitative data was analysed using Google Forms and Microsoft Excel, and qualitative data was analysed using thematic analysis. The study was supported by insights from industrial reports by OECD, the European Commission and McKinsey & Company.
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According to the study (Weerasinghe 2026), most strategic decisions were made based on gut feeling and personal experience. Strategies were reviewed only occasionally or in response to a crisis. 62% of respondents were not using any structured framework when planning or executing their strategies. The result is a persistent gap between what owners intend to do and what happens, a gap between strategy and execution (Harvard Business Review 2020).
A five-stage framework built for real businesses
Based on these findings, the study developed the Five-Stage Strategy Guidance Framework, built on four principles: simplicity, integration, action orientation, and adaptability. The framework moves through five connected stages: business context analysis, strategic positioning, strategic choice, execution planning, and performance review.
At its heart is the 31Q Execution Model: three strategic priorities, one measurable objective each, reviewed on a quarterly cycle. Drawing on OKR methodology (Doerr 2018, 7) and the Balanced Scorecard (Kaplan & Norton 1996), both simplified to fit SME realities, the model bridges the gap between strategic decisions and their execution.
The entire approach requires only 12 to 14 hours of structured work per year, making it realistic for a single owner to complete without outside help. By linking strategy to a quarterly review cycle, it ensures that plans are not made once and forgotten, and owners can monitor progress, learn from each cycle, and adapt as conditions change.
The research confirms that Finnish SMEs do not lack strategic awareness. What they lack is a structured framework built around their needs and constraints. Future research could expand the framework to wider sectors and countries and explore how digital and AI tools could automate reminders and further simplify the planning process.
The findings show that Finnish SMEs do not lack awareness but have limited access to structured frameworks tailored to their needs. By linking strategy to a quarterly review cycle, the framework bridges this gap and supports continuous use. Future research could expand the framework to other sectors and explore the integration of digital and AI tools.
Authors
Rangana Weerasinghe is completing a bachelor’s degree in international business at LAB University of Applied Sciences and has a professional background in strategic leadership in the quick service restaurant industry.
Sari Suominen works as a Senior Lecturer at the LAB University of Applied Sciences in Lahti.
References
Doerr, J. 2018. Measure what matters: OKRs, the simple idea that drives ten times growth. YouTube video. Cited 12 Apr 2026. Available at https://www.youtube.com/watch?v=L4N1q4RNi9I
European Commission. 2024. Annual report on European SMEs 2023/2024. Cited 5 Mar 2026. Available at https://publications.jrc.ec.europa.eu/repository/handle/JRC142263
Harvard Business Review. 2020. Execute your strategy without killing your business. Cited 19 Apr 2026. Available at https://hbr.org/2020/11/execute-your-strategy-without-killing-your-business
Kampus Production. 2021. Woman, standing, cardboard, boxes, writing, paper, desk, laptop. Pexels. Cited 21 May 2026. Available at https://www.pexels.com/photo/woman-standing-among-cardboard-boxes-and-writing-on-a-piece-of-paper-on-a-desk-with-a-laptop-7857557/
Kaplan, R. & Norton, D. 1996. Using the Balanced Scorecard as a strategic management system. Harvard Business Review. Cited 14 Apr 2026. Available at https://jackson.com.np/home/documents/MBA4/Management_accounting/BSCHarvardBusinessReview.pdf
Weerasinghe, R. 2026. A Practical Strategy Guidance Framework for SMEs. Bachelor’s thesis. Lahti University of Applied Sciences, LAB School of Business. Lahti. Cited 21 May 2026. Available at https://urn.fi/URN:NBN:fi:amk-2026052315820
