Introduction
Why do companies find “Vision” and “Strategy” so difficult to define and execute? The terms aren’t vague. They certainly mean different things to different people, despite being clearly defined as a business imperative for decades, and despite there being numerous planning frameworks to drive the definition of a vision, and the strategies to achieve the vision.
As an example, we have a co-worker who came to us from a tech start-up – she tells the story of her last company’s “CEO vision” which was more cultural guiding principles, like “be nice to each other.” They had nothing to do with the future direction of the company, which is perhaps why, not coincidentally, the company is now out of business.
The Current Situation
Many companies have a Vision Statement that is aspirational or inspirational, intended to show customers and employees what they are broadly trying to achieve. However, there are also internal vision statements that define specific and bold goals that the company, or organizations within the company, are trying to achieve. For the purposes of this blog post, I’m going to focus on internal, transformative Visions and Strategies for technology product and services companies. OIC focuses most of our work in this sector, but many of the observations also apply more broadly. Across decades of cumulative consulting in strategy, operations, software delivery, cyber security, and process reengineering, our team has seen very few companies with a well-defined, well-communicated, and executable strategy. This includes everything from global technology giants, to start-ups (both boot-strapped and Venture/Private Equity funded). Here is what we often see:
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There is a Vision, but it’s in the Founder/CEO’s head, and has not been documented or communicated throughout the organization
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There is a Vision, the leadership team is aware of some of the elements, but they don’t agree on the strategies to drive its execution, and don’t take the time to drive alignment across the leadership team
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There is no defined Vision, just a set of goals, usually financial, for the current fiscal year
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The Board of Directors doesn’t understand company operations or the market in detail, so allows more generic Vision statements, again often around financials for the current fiscal year
So why do we care?
The pace of change in the tech sector is accelerating. Smaller cloud-native players can be relevant and gain traction much more quickly than even five years ago with only a differentiated product and a budget for analysts. So, if you do not have an aligned leadership team, all understanding the vision in the same way, a few things will happen.
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You will waste time and energy on constantly managing who does what, and to what end. None of which gets the product or service to market faster.
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You will lack business agility and forfeit the important advantage of being able to quickly react to changing market dynamics.
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And, perhaps of equal importance, you will have lower employee satisfaction (and maybe higher attrition) because your team doesn’t understand where the company is trying to go, and what their role is in achieving the vision.
Why is it so hard to get this right?
Strategy is a learned skill and a way of thinking, and it’s difficult for many people. Few people in tech company executive suites have seen a strategy exercise executed well, revisited regularly, and adjusted appropriately as customer needs and the competitive market shift. In larger companies, often “strategy people” are not close enough to the business to offer anything but theoretical suggestions.
People are busy, especially with the very high lay-off rates in the tech sector, and they prioritize run-the-business activities over strategic transformation initiatives.
Too many leaders attack the exercise from the vantage point of what they own organizationally, rather than what the Vision for the future of the company could be.
Developed by Andy Groves of Intel and later popularized by John Doer in his work at Google, Objectives and Key Results (OKRs) are all the rage for tracking goals and objectives. However, they need to be implemented properly. Too often they consume massive organizational energy, which sometimes helps teams align, but often are forgotten as soon as HR is done driving the exercise. I have nothing against OKRs per se, but they should not be a substitute for team leadership, and they should not take 3-4 months out of a 12-month planning cycle, which is very common.
So how much planning is enough to get the leaders of each organization, and their teams, marching in the same direction, with the same vision for the company (or an individual organization)?
Depending on the complexity of the organization, it should take a month or less to do the following:
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Define the Vision for the future
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Define the Strategic Shifts needed to achieve the Vision
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By "Strategic Shifts" we mean that we are defining and explicitly acknowledging that we are making bold changes to how key parts of the business or existing strategy will be done in the future, in order to achieve the Vision.
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Define the elements of each Strategic Shift into an actionable Execution Plan that everyone on the leadership team agrees to (which can be difficult with organizational politics and/or passive-aggressive leaders)
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Communicate and execute the plan, track it, and adjust as needed, similar to any other Agile initiative
Let’s take these one at a time.
Define the Vision for the future
Start by giving examples of what a good vision statement looks like. It must be, well, Visionary. Ideally, it is bold and aggressive. It must have a defined timeframe. And it must be achievable.
The days of five-plus year strategic plans are probably over; generally, your Vision should be achievable in three years or less. And we have all seen “generic” vision statements that don’t really mean much, like “be the best in our product category with delighted customers.” You can also have multiple internal Vision Statements across different functional areas (shifts in people dynamics or culture, financial attainment, competitive positioning, etc.).
Here are samples of some solid Vision Statements:
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Double our company revenue within the next three years.
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Reduce voluntary attrition by 10% within 12 months, going from 19% annual voluntary attrition to 9%.
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Accelerate the development roadmap for our new product release by six months, launching the new product by July 2024.
Define the Strategic Shifts needed to achieve the Vision
One thing that is very difficult for people at this step is to define the required Strategic Shifts independent of the current organizational structure and independent of what each leader owns.
If you can get the team to think at a higher level, regardless of what they are responsible for today, you not only get more intellectual capital in the decision process, but also more buy-in. And you might find that the Strategic Shifts result in changes to, or streamlining of, the organization design.
To define the Strategic Shifts required to “Double our company revenue within the next three years” you would most certainly include a close look at the portfolio and the sales and channel strategy, but could also include actions related to competitive positioning, analyst strategy, and entering new markets.
Strategic Shifts for “Reduce voluntary attrition by 10% within 12 months, going from 19% annual voluntary attrition to 9%” would likely include employee listening activities to understand WHY attrition is high, and then defining the levers to improve it. This might include actions related to compensation and benefits, clearer career paths, investment in team training, cultural elements, etc. Many companies no longer leverage an exit interview process, so this robust data is not available to adjust HR levers as issues emerge.
Strategic Shifts for “Accelerate the development roadmap for our new product release by six months, launching the new product by July 2024” would likely involve adding development talent, accelerating planned marketing activities, and adjusting the current analyst strategy and communications. There could also be a competitive “take-out plan” where sales campaigns and incentives are aligned to tackle the market share of a specific competitor, which could start right away.
Define the elements of each Strategic Shift into an actionable Execution Plan that everyone on the leadership team agrees on.
Now for each Strategic Shift, develop a clear action plan. Depending on the size and expertise of your leadership team, and potential politics involved, this can be done as a group exercise, or broken into sub-groups to work out the detailed plan. We often include key people from the level or two below the leadership team, who know the problem areas, and will likely be very involved in the execution of the Action Plans. And although the detailed exercise is iterative until everyone agrees, it can still be done rapidly.
Here is an example of what the Action Plan for this Vision Statement might look like:
Vision Statement: Double our company revenue within the next three years.
Strategic Shifts Required: 1) Accelerate Roadmap Timing, 2) Expand Channel Strategy, 3) Improve Sales Processes and Increase Team Size
Action Plan (which would include owners, not listed below):
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Launch new and more competitive version of the product within 12 months (accelerate currently defined roadmap)
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Add one product manager within two months
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Add five senior off-shore developers within two months
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Invest in robust marketing plan in preparation for launch
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Develop two new focused channel partner relationships and develop strong joint value proposition and GTM, within 12 months
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Sales
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Improve Sales on-boarding process to accelerate time-to-first-sale by three months (from currently ~six months)
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Accelerate Sales and Customer Feedback loops to Product; imbed in Customer Success process
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Hire eight new sales representatives with experience in our domain within six months
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Revise sales plans to reward early in FY sales and improve acceleration bonuses, within two months
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Communicate and execute the plan, track it, and adjust as needed.
An appropriate level of detail should be communicated throughout the company, so people feel part of the journey. Obviously, this will vary depending on whether the company is publicly traded and whether competitive levers are critical to the plan.
Having a cadence of progress reviews is essential. It not only informs whether you are on track to achieve your Vision Statement(s), but also trains your leadership team on business agility in decision-making. As market dynamics adjust, your plan should adjust as well. Encourage your team to talk about what has worked and what hasn’t, and be realistic about what resourcing, or other investment, is needed to be successful.
We generally try to check progress on the Action Plans at least monthly, and revisit the Vision Statements at least quarterly. It is a good practice to include the current Vision Statements in any employee onboarding, and keep a running history of shifts in the Vision, which can be exceedingly helpful as key leaders exit and new leaders join. Over time, your team will learn to operate with both speed and agility, which will help you maintain a competitive edge and foster a culture of transparency and success that will be attractive to the best candidates.
In Closing
OIC has repeatedly seen the extensive value of a well-defined Vision and Strategy to a company’s success. Your team will be happier and more engaged when they understand the journey and their role in it. And most importantly, your leadership team will be more agile in their operations and decision-making, no longer wasting valuable time on constant realignment on strategic direction, allowing you to accelerate achievement of your Vision.