Founders often smirk when they hear people talk about strategy, strategic planning, or any other term prefaced with “strategy/strategic.” In a world that constantly shifts in the blink of an eye, strategy feels stale and static.
At the same time, it’s one of the most misused words being thrown around in the world of business these days. Folks use the word seemingly for everything—from their “social media strategy,” their “customer engagement strategy,” and “sales strategy” to, I kid you not, their “lunchtime employee food strategy.”
Make no mistake—a good and actual strategy is what sets a successful company apart from its competitors. Without a strategy, you are merely navigating the waters by feel, not knowing where you’re going, and following directions on a whim.
Michael Porter, the godfather of strategic thinking, defined strategy as how an organization, faced with competition, will achieve superior performance.
When you enter a new market, there is no competition (if it’s truly a new market) or little competition (if the market hasn’t caught up with your vision). But as you grow and build out your company—should you be successful—you can be sure that there will be plenty of others vying for the same prize.
Dealing with this situation as it occurs is a recipe for disaster. Thinking about this beforehand and developing a strategy ensures that you can act instead of reacting.
Strategic planning is essential to the sustainability of your company. Here are two valuable lessons to help guide founders in the early days of their startup.
1. Strategy is more about what you don’t do.
My first job out of school was selling Apple Macs for Europe’s largest Apple retailer. Through a series of lucky coincidences, I ended up working closely with the founder and CEO of the company—eventually leading to me building the first e-commerce store for this company (back in 1996).
The founder of that company was one of the most amazing, street-smart entrepreneurs I’ve ever met. And he taught me my first, and probably most important lesson about strategy.
Strategy is less about what you do, and much more about what you don’t do.
As an entrepreneur, you are faced with literally hundreds if not thousands of small decisions every week. Most of these decisions are tied to an opportunity. Multiply this out for the year and your decision space is close to infinite. Yet every choice you make counts and can be the one which makes or breaks your business.
The art and skill is to figure out which of those opportunities are the right ones and then follow through with focused execution. This involves saying no to 90% of everything you could do.
Become crystal clear about what it is you want to do and achieve. Figure out which actions support this plan. And then start saying no to everything else.
2. Strategy takes time.
When I launched my first startup—which in a lot of ways was also my first experience running something as complex as a company, juggling multiple stakeholders (customers, service providers, partners, investors, and employees) and staking out the strategic path for the company—I often pulled long, focused strategy sessions where I took a specific problem and didn’t stop until I thought I found the solution.
More often than not, those solutions turned out to be not that great, short-sighted, and in need of significant revisions to work.
Over the years I learned that strategy takes time. It requires mulling things over in your head, checking your assumptions, again and again, getting an as diverse as possible pool of insights.
Today I regularly deploy a technique which is similar to making bread—putting the ingredients together, kneading it, and then letting it rest for a while before returning to continue working on it. I often take as long as a week of not working at all on a strategy doc after I put down the first thoughts and elements. After returning to the document after that rest period, I typically find some elements missing and others either not developed enough or completely off. The one thing which I always find is that by allowing myself to step back from the problem, I consistently come up with better solutions.
Planning for superior performance
When founders think through and map out their option space, carefully assess the options, plan for potential moves from their competition, and then develop a clear and concise plan, they are ideally poised to achieve superior performance.
A good strategy will guide you to become the dominant company, and a key component of that strategy is outlining how you will deter or delay competition as the market grows.
Are you building what matters? Check out Singularity University Ventures to see if we can help you achieve greatness in your particular challenge space.