Often, when I first ask startup founders about their strategies, they usually tell me what their goals are for the year. Or they provide a laundry list of projects that they have underway and the various KPI’s (key performance indicators) that measure them. You know what they never do? No founder or CEO has ever responded by emailing me a one or two page document outlining their strategy –or any cohesive theory about exactly how they will achieve their goals.
That’s true even of founders who hold regular “strategy” off-sites.
Over time working with them I glean some assumptions, and a sprinkling of a strategic theory. But if it exists, it is undocumented.
In most cases, when I suggest they develop a written strategy with their teams, they say one of three things:
- We do have a strategy, and it is the list of goals and the OKRs that I’ve articulated. Or,
- I have a strategy, but right now the only thing that matters is generating revenue. So, I’m not writing it out or discussing it with my team. They just need to sell. (In other words, it lives in my head). Or finally,
- We can’t afford to be constrained by something like a strategy. We are trying to figure out what works.
Most of these folks have MBAs and took courses on strategy and strategic planning. But few have an articulated, written strategic plan. They have tons of adjacent documents: Initiatives, OKR’s with cascading metrics for projects and teams. But a clear strategic plan? Almost never.
Does this matter? After all, if they have some kind of product , a brand, a team that is selling it and investors who gave them funding –do they need a strategic plan too? Or, if they haven’t quite figured out what the most viable vertical target is, shouldn’t they carry on and test a lot until they know the answer to that– and then craft a strategy?
No. They should still develop a strategy.
That doesn’t preclude trying things and failing –and revising the strategy as that happens. But documenting a strategy forces focus and commitment –as well as formal testing criteria.
One client company of mine’s product is a public health platform. It is used by 100s of hospitals and has partnerships with multiple global companies.
It’s well-funded, with investments from some of the biggest names in Silicon Valley. The number of things that they measure is astonishing. They have reams of metrics from every aspect of the business, technology, performance, and product..
Yet, over the course of just one year, as I was coaching their C-suite, they decided to tackle 3 additional verticals and to leave another; they acquired a company within one of the verticals they hoped to penetrate, only to find that their respective technologies could not be integrated; and they abandoned that vertical and instructed their vertiginous sales team to focus on another.
At any given moment, if I asked the head of revenue what their target market was, why, and exactly how they would win that market, she couldn’t tell me.
The CEO was adamant that he had a strategy, but he didn’t ever commit it to paper, preferring to issue new initiatives by fiat with minimal context and no real discussion.
Loss of Perspective
Part of what happens when the strategy resides in someone’s brain rather than in public, is that it can’t be scrutinized for logic, plausibility, or internal consistency. It also allows for tremendous waste of energy and resources.
Executing strategy demands investment. Whether money, time or political currency, the investments are justified by the strategy. But when an organization is operating without that document, inevitably, resources that are directed at some –ultimately forgotten initiative– are lost. There is no standard against which to vet resource allocation nor any test for failed initiatives.
A vision, mission, goals, and projects can seem impressive. But they’re not a strategy. They describe the score we hope for, but not the game we’re playing, our opponents, or how we will win. It’s like coaching football by telling the quarterback to “make two touchdowns”. [Click to tweet this thought]
That’s not a strategy.
When there isn’t a documented strategy—that has been interrogated and stress tested– so many things are lost.
- Building a strategy with a team leads to discovering problems before time, money and political capital is spent. We are all blind to our biases and the inconsistencies in our thinking. Creating strategy with a team makes it better.
- A team that builds strategy together is crystal clear about where they are aiming and how to get there. Everyone is (though hackneyed) rowing in the same direction.
- By virtue of that shared understanding of why and how we are selling this to that target, team-members become experts. They are not just knowledgeable about their product, but about their marketplace.
If a strategy isn’t the mission, vision, goals and projects, what is it? It’s a theory. Not of what the company will do, but how.
Resisting the Unknowable
The thing about those other pieces is that they are all relatively certain. A vision is made up, but it’s meant to be inspirational, not correct. Goals are certain because they come with numbers. Either you hit them, or you don’t. It’s certain. Initiatives are nothing more than projects. And projects are also certain. You simply take action.
But a theory is, by definition, uncertain. You may be right or wrong. You can’t possibly know.
Uncertainty is uncomfortable. So, founders –and investors –all of whom crave greater certainty –avoid it.
Keeping the plan confined to goals and projects means never having to formulate a cohesive, internally consistent theory about how you, your team and your product will be unique enough to capture a specific market.
In its place, goals, metrics, and projects drive frenetic activity—and that looks impressive. It disguises the massive cost of failing to test a theory before investing time and energy in executing it. But mostly, a steady blur of activity hides the lack of alignment, customer churn, ill-informed salespeople, and general confusion. Time, money, and morale are all sacrificed at the alter of a fear of commitment. It’s a big price to pay.
Isn’t it worth spending a few days and crafting a real strategy?