Why Converting Goals into a Strategy is a Red Herring
Updated: Apr 12, 2019
Building a Strategic Framework for Scaling Success
It's likely that if you’re in an early-stage startup, your first year entailed the grind of adopting a tactical, goal-oriented mindset that helped produce incredible results. Those to-do lists, two-week sprints, and working best with what you already have so you can run lean was likely the modus operandi. And that intense grind is part of the excitement of working in the startup world.
What comes after that first year is growth, as the company starts adding headcount, subtracting headcount, experimenting for product market fit, and making headway overall. With growth opportunities comes new challenges, and with new challenges comes an elevated approach that requires much more than a series of vanity metrics, goals or dreams. This growth period is the most critical time for establishing a success framework built on strategic thinking and planning.
Strategy and planning allows for space to frame a goal, and groundwork to achieve that goal in a way that is realistic and measurable. It also allows the opportunity for the best idea or plan to rise to the top so that existing or potential stakeholders—such as investors, the product team, sales and talent—can align with the plan and help attain the results you are aiming for. Overall, strategy and tactics are a yin and yang relationship that can help propel you from that scrappy, new start-up grind to your next phase—without losing that competitive edge.
Start With The Concept
Strategy and planning as an intertwined duo is one of the most misunderstood and misapplied business mechanisms I have seen startups try and implement. There are a few reasons why this is the case, and the biggest has to do with the actual concept. As this HBR.org article written by Freek Vermeulen explains: “A real strategy involves a clear set of choices that define what the firm is going to do and what it’s not going to do”.
Not understanding the concept of strategy and planning has a trickle-down effect that impacts the chain of events associated with it. The reality is: Understanding and implementing a strategy is a skillset that needs to be nurtured. In fact, it’s very rare that I have met a brilliant tactician who can excel at both tactics and strategy. This is especially important to note, because running with a tactical, to-do list mindset may cause you to hire more like-minded talent, and that could potentially exacerbate existing problems rather than solve them.
Goals Are Not A Strategy
The benefit of developing a strategic framework is that it indicates to investors, customers, team members and other stakeholders that you are taking your startup seriously—and so should they.
What are some signs that a strategy was either poorly implemented or misunderstood on your team?
Not hitting KPI’s: The KPI is essentially how you plan on reaching the intended target of the KPI, which should align to an overarching strategy. If you haven't done a strategy, a KPI may continually fall short and may not be as effective as intended.
Productivity metrics showing false positives: This means doing busy work that looks like it’s producing results, but it’s actually going nowhere meaningful (i.e. vanity metrics). Burndown rates and click-throughs are good metrics, but what are they really solving? Yes, small wins are great, but are these being leveraged toward something bigger?
Bad hires or high turnover: If every new hire, from contractors to full time, just never seem to work out they “don’t understand the vision”, there’s likely a larger issue at hand. It’s one thing to address the symptoms, but it’s another to address the causation in order to determine the best way to move forward.
Lukewarm investor sentiment: If the goal is to raise money for angel or first-round investors, but pitching to quality investors is not going great—even though the numbers are good enough to get into the door—it’s time to rethink your strategy. Good investors want more than aspirations and goals. They want to see how exactly you will bring ROI from the three phases of people, product and process.
Retention or acquisition issues: If MRR has dropped after a big advertising blitz and you’re not proactive with how to handle the issue, it will ultimately make you less reactive.
If these examples look and sound like something you have been experiencing—you are not alone. Strategy and planning mechanisms are designed for accountability to the efforts made at any particular time. It also allows time to evaluate everything before committing to anything holistically, rather than in a silo.
Start Small, But Think Big
So what are some starter tips to start thinking differently about building a strategic framework? It takes a team to make it happen, but the first steps should be to assemble a leadership team and set time aside to tackle a particular topic. Here are a few more tips to get you started:
Start small: Crawl before you walk. Try to not reinvent the whole company with a massive strategic rollout just yet.
Pick a target: Narrow in on something you want to try and develop a strategy. From there, work backward.
Set your goals: Use something like SMART to develop your KPI that aligns to the strategy. Answer the questions: What does a good hire look like? What does the company need to do in order to get the best and retain them? Are your 3 P’s (people, product, process) aligned for this?
Execute and iterate: Implement and and let it play out. Get feedback from the team and refine.
Define success: As you implement these strategies and start to understand what works and what doesn’t, you will likely not hit all of your goals, and that’s OK.
Developing a clear and concise strategy that communicates where you want to go and how it will get done is not easy. Don’t over complicate it with tons of idea meetings if you can't actually act on the strategy. On the contrary, don’t fall into analysis paralysis where you do nothing because you’re overthinking it.
The bottom line? While you may be building amazing technology, it’s people that drive everything forward—from culture to investors. These are the stakeholders that rely on communication, leadership and plans to bring the vision to life. Through key collaboration, you can control what is most important in order to be successful, and align strategic thinking with the appropriate tactics to make it happen.