With all the innovations in technology over the last many years, including whole new ways to manage the development process, there seems to remain at least one bastion where experience still rules — setting corporate strategy. The first challenge typically comes from what the word ‘strategy’ actually means to an organization — by definition it is a ‘plan of action designed to achieve a particular goal’. It’s a military term which essentially means lots of structure, discipline and focus. I rarely meet a young company that has this kind of strategy in place — or said more properly, the people who work for the company know about the strategy that is in place, let alone operate with structure, discipline and focus. When I was running PlateSpin, we had a detailed strategy in place along with a more detailed operational plan — it was well communicated and available to everyone, but mostly nobody seemed to be able to articulate what it was — except those in the immediate circle of the leadership team. Somehow we had structure, discipline and focus. I suppose this is all common place, human nature, meant to be — i don’t think technology is going to change this aspect of human behavior, or should i say misbehavior.
Anyway, my point is meant to focus more on how a corporate strategy is set. Does it come from a consensus event? Does it come from one person’s vision? Where do you start in creating a strategy for your company? It may be something you think you have a handle on but for the most part, a typical leadership team is largely incapable of sorting through the issues in an efficient way to create a strategy for themselves. It often falls to an outsider to facilitate the discussions, ask challenging questions and flesh out the salient points for the team to consider. It’s a thinking process, one that requires clarity of thought, logic and often broad experiences to make sure the relevant issues are reviewed.
The first place to start is usually the end — what do you want your company to look like 3-5 years out (any further is usually too magical to treat as a serious goal)? Many first responses include gargantuan revenue numbers, or to have been sold, or to be world-wide leaders bigger than Google and Apple combined. Did I say strategy is synonymous with dreaming? I like working back from an overall positioning statement. It forces everyone to start creating a path in their head from where the company is today to where it wants to be in the future. It can be revenue oriented but often some details underneath a revenue number need to be explored as well — like how many deals would be needed to get to the 5 year number? Is it an achievable number or so much higher than the current deal flow, no realistic operating plan could get you there.
Working back and forth between today and the future is a good way to iron out the details of a strategic plan. Integrate true corporate strengths as you go (your DNA). For each key point about the future, you should have some statements that order how you would get there, include some measures whenever you can. Once a few of these paths are drawn, they start to tie together other issues all by themselves, like people and skill requirements, perhaps new ways to get to market, strategic partnership needs, funding needs, etc. It’s a bit like knitting a sweater, you have to start with a pattern, know how many stitches fit each row adding and dropping as appropriate, switch tactics as the stitches change to make certain patterns, etc. Soon pattens start to emerge without doing anything other than following the plan. You have to have and follow a plan of attack before taking up knitting a sweater or you wind up with tangled yarn.
The best strategies can normally be articulated in a single PPT slide. The best companies live and breath their strategies. The best teams focus on the goals at hand, have the right measures to tell them if they are on track or not, and also have some decisions already made if things do not go well. Setting a corporate strategy is important — but only useful if set in the right way.
Any comments would be appreciated.