are we doing something stupid?

Any organization, from a government agency to a start-up, always has a certain set of principles and objectives that guide managers when making decisions and allocating resources. Sometimes it is formalized, and then there is a document with a title like “Strategy of the Horns and Hooves Society for 20XX-20XX”. Sometimes there is no written document, but there are instructions like “take a share from competitor X”, “increase profitability to X%”, “launch product X”, “enter market X”, or, for example, like my friend, the owner of a small company, “earn in X year to build a house to replace the one that burned down.” No matter how formalized these settings are, they can be called strategic tasks and priorities, since it is on the basis of them that de facto leaders will proceed when making decisions.

These tasks themselves can be good or bad, depending on the professional and personal qualities of the leadership, but they are always there, even if no one has ever formulated them. For example, “do as before” is also a strategy, which, however, is rarely recognized. Or there may be a mindset to “maintain leadership in old market segments” while the entire market shrinks or is taken over by a competitor with an entirely new product and/or business model. Such a strategy is likely to be foolish, as was the case with American automakers in the 1970s, who were rapidly losing market to Japanese companies but changing their products and methods of operation little. However, a bad strategy is also a strategy.

Any strategy is subject to aging. Since strategic goals are formulated at a certain moment, and are based on management’s ideas about the market and about their capabilities, these goals may cease to be relevant for one of two reasons:

  1. As time passes, it will become clear that the initial ideas about the market and / or yourself were not correct. For example, there was an idea that “we can double our development team in the next six months”, and after 3 months it became obvious that doubling would not work.

  2. As they work, managers and the team gain new knowledge about themselves or the environment, which significantly change the situation and therefore make some of the strategic settings incorrect. For example, the intention was “to get X sales by increasing the volume of deliveries to three existing customers – A, B and C”, and after a few months it became clear that A, B and C would not buy enough to get X. This means “get X sales ” you can only start working with other clients – not from among A, B and C.

Let’s assume that the strategy has lost its relevance. What bad will happen then? In general, we can say that time and resources (money, effort, attention) will be spent on things that will not contribute to achieving the desired results. This means that they will be wasted, and ultimately the organization will fail – from losing market share or profit to disappearing. The bad news is that people, by their nature, tend to “stick” to the established rules, and therefore they can miss the moment – and either do not catch on in time, or do not catch on at all.

How not to miss the moment and correct your actions in time? Below I propose a simple technique that, with due regularity, will allow you to “keep abreast of the strategy” and correct it in a timely manner.

Start by trying to formulate your strategic goals. If you’re the CEO or founder of a startup, chances are you don’t have a written strategy. But there may be promises and assurances to investors under which you raised money. Or some fuzzy thoughts about what is important for the company now. Try to formulate them and ensure that you and key leaders or members of your team understand what is at stake, and (preferably) more or less agree that it is with an eye to these tasks that work is being done. The ideal picture – your strategic objectives meet the SMART criteria – specific, measurable, achievable, relevant, time-based. For example, “get X sales of product A in market B in the last month of the year”, or “launch feature X, and thanks to it, bring the operating indicator of A to level B by the end of the month.” However, it is not scary if your goals or principles are not so clearly formulated. The main thing is:

  • they are formulated at least somehow;

  • key people in the company understand what is meant.

You often run into two problems:

  1. Some strategic goal is stated, but in fact nothing is being done to achieve it. This is especially true for tasks that are not directly related to the current business. For example, “launch a fundamentally different product” or “enter a completely new niche”.

  2. The opposite situation – management or employees understand that there is an unnamed real strategic task that actually affects the decisions made, but the most important decision makers (CEO, founders, shareholders, etc.) do not realize this or do not recognize that this is an important priority. For example, if it’s a very personal moment, like “wipe X’s nose by launching a better product than him.”

Both of these problems are not obstacles in and of themselves – by following the steps below, they can be identified and overcome. True, subject to an open, constructive and honest dialogue between the participants of the exercise. In order not to go too far aside, let’s assume that this dialogue is just that.

So, before you there is a list of strategic tasks. Next to you – a few people from the team or management of the project or company. They are employees of a high enough level to see the big picture and take part in discussions about how and where the company or project is going. And they all understand what is meant by each task.

The next step is to “take a history”, namely, to identify the main inputs received over the past weeks, months or years, based on which your strategic goals may become irrelevant. In the best case, you have completed the task, and it no longer affects the decisions you make. At worst, the strategic task continues to influence decisions, but given the new inputs, it pushes people to make bad, wrong decisions.

History taking is designed to answer three questions:

  1. What have we learned lately About Me (that is, about your company or organization) that might require us to change our strategic priorities?

  2. What have we learned lately about the environment an environment that might require us to change our strategic priorities?

  3. Which of our strategic objectives does this apply to?

I like to do this exercise like this:

  • Gather representatives of each important function on your team. For startups, these are usually representatives of the product, commerce, operations, development, marketing, analytics and, in a broad sense, the back office (HR, finance, admin, and so on).

  • Prepare a whiteboard (real or Miro; I prefer the latter) with three columns corresponding to the three questions above and lines – one for each function, plus one “other”.

  • Ask all the participants to work in silence for 10 minutes – take real or virtual stickers and “pour” on the board what comes to their mind first. Wherein:

    • Do not ask to be limited only by your function – you can enter thoughts into any lines.

    • Try to mark the authors of thoughts, for example, through stickers of different colors.

    • Do not worry that only 10 minutes are allocated for this exercise. Firstly, this is usually enough to collect 80-90% of important inputs. Secondly, the rest can be added later.

    • It’s okay if someone writes a new introduction in columns 1 or 2, but does not fill in column 3, that is, they will not say on the fly what it refers to.

    • It’s not scary if some notes are repeated.

  • After 10 minutes, go through all the lines of the resulting table. It usually takes from one and a half to several hours.

    • Read all notes and make sure everyone understands what the author meant. If necessary, write more clearly.

    • Where necessary, fill in column 3. That is, do not leave “unattached” inputs. If there is some new introductory, then there must be an action that it prompts.

    • Write any important thoughts in columns 1-3 that come up during the discussion.

After completing a few hours of work, you will have a fairly complete list of what your team has learned recently and what it affects.

The next step is to “refract” the new inputs to your strategic goals. This means answering the following questions:

  1. Based on what we have learned lately, how much has everything changed with respect to each strategic objective? For example, on a scale from 1 to 5, where 1 means “nothing has changed – as before, the strategic objective was correct, and now we need to continue to fulfill it”, and 5 means “with new inputs, the strategic objective requires a strong revision – or it must change or the way we do it must change.” The numbers from 1 to 5 I like to call “magnitude of change” – the degree of change.

  2. For the chosen strategic objective, what exactly might we want to change?

  3. If at the moment we don’t have all the information to decide to change the strategic objective or the way we carry it out, what do we need to do to decide on it? For example, something to count or find out.

  4. Who and when should do things from point 3?

  5. Who and when should decide to change the strategic objective in accordance with paragraph 2?

As a result, you will get a certain set of tasks. Some need to be done in order to continue moving towards the goals outlined earlier, but in a more reasonable way – one that takes into account your new understanding of the situation. Others will help to replace the previously outlined goals with others – those that, again, seem to be more correct in the light of new knowledge.

The process described above is a good tool for maintaining a link between strategic objectives and some vision of the future, in which the desire to come, and momentary affairs. I like to refer to this as a “strategic check-up,” after a regular medical check-up. In a way they are similar.

Depending on the organization and environment you are dealing with, it will be useful to conduct such checks at different frequencies. For a startup team that is just “groping” for its first real knowledge about the market and product, the rate of new information inflow will be very high – and therefore it will be useful to check every few months or even weeks. For a more stable business, a semi-annual or annual cycle may be suitable.

Similar Posts

Leave a Reply