So you came up with an idea, got yourself some funding, developed a product, gained customer traction, found a market niche, and generated some revenue. Maybe even a lot of revenue. That’s great. You’ve gone farther than the vast majority of your peers.
The problem is, you can’t just keep putting one foot in front of the other forever. Sooner or later you’ll reach a point where that no longer works. You have to have an overarching vision or strategy for your company. If you don’t, you simply can’t make smart decisions to help you get there. You won’t be able to answer the questions that come up from time to time, such as: Where do we go from here? How do we grow? What’s the most effective way to scale? Will processes make us more effective or more bureaucratic? Should we focus or diversify? How do we know whether to stick with the plan or pivot?
In my experience, these are the seven steps to crafting a strategic plan:
Step 1: Define your team. If you have a leadership team, that’s the core team throughout the entire process. The CEO is still the boss, but you might want to have an impartial facilitator to keep things moving and keep folks from killing each other (this stuff can get pretty heated). Everyone stays focused at every meeting. Everyone commits to being all in.
Step 2: Be transparent. Everyone is completely open and brutally honest. Everything is on the table. There are no preconceived notions, sacred cows, pet projects, or personal agendas. You’re not there to play politics. You’re there for one reason only: to come up with the right overall vision and strategy for the company.
Step 3: Take stock. Someone should present an objective snapshot of how the company and its products stack up next to the competition within their respective markets. A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a very good idea. Consider interviewing or surveying key stakeholders (board directors, employees, customers) and present notable findings.
Step 4: Hash it out. Within that context, first a) brainstorm, then b) debate, and finally c) come to a consensus on the overall vision and strategy until you can’t stand to be in the same room anymIore. That may take several sessions depending on the specific process you choose to employ. You may need time in between meetings to explore various market opportunities and report back.
Step 5: Call someone’s BS if necessary. Whatever plan you come up with has to comply with the laws of physics and economics. You don’t live in Utopia, and nothing happens in the real world simply because you want it that way. That’s the reason for brutal honesty: so at least one person is there to call bullshit when he hears it.
Step 6: Get feedback. Once you have a proposed vision and strategy, it’s a good idea to try it out on those who will ultimately have to embrace and execute it to see if it makes sense for your situation. Bounce it off some key employees, outside consultants, or even trusted customers and partners to see what they think.
Step 7: Finalize and communicate. Consider the feedback, iterate if necessary, finalize, and communicate. Restructure to align current products, organization, and plans to the new vision and strategy. Everything must align. You can also put together an externalized and sanitized version, formulate it into a brand platform, and incorporate as needed into external marketing, communication, sales, and investor material.
You can scale this process up for a big company and down for a small one. But whatever you do, make sure you do it. If you don’t have an overall vision and strategy, it’s hard to make effective decisions and answer critical questions like how do we grow, should we diversify, and how do we know whether to stick with the plan or pivot?
Here is a very public example. Twitter filed its S-1 prospectus to the SEC on October 3, 2013, and went public about a month later. At that time, the company wrote, “We aim to become an indispensable daily companion to live human experiences.” It went on to provide a number of strategies for accomplishing that goal and growing its business, all of which hinged on substantially growing the number and engagement of its users.
Unfortunately, the growth rate and engagement of the company’s users has slowed dramatically and seems to be flattening out way short of its goals. And while its revenues are growing, expenses are growing almost proportionately. Meanwhile, its advertising market share continues to be very small relative to market leaders Google and Facebook. To make a long story short, at present, Twitter doesn’t appear to be on the right track. And since it’s a public company and a highly visible one, CEO Dick Costolo came under fire by analysts, pundits, and the media.
As a result, Costolo was on a bit of a roller-coaster ride, turning over the majority of his leadership team and coming up with various strategies du jour and new forms of metrics that might present the company in a more positive light, seemingly on the fly. Meanwhile, the stock has plummeted by roughly 50 percent since its post-IPO peak about a year ago. Finally, the embattled CEO was forced to step down. The point is, trying to come up with a company’s business strategy in real time under the excruciatingly bright lights of the public markets is brutal, to say the least. Moreover, that sort of flip-flopping around on top-line strategy can be tumultuous for a company. It can be distracting for the leadership team, demotivating for employees, and particularly hard on decision making.
Not that any of this is easy. But no matter how big or small your company is, having a reasonably coherent overall vision and strategy is the best way to find the right answers and make good decisions.