The world of strategy is full of canvases that help bring order to the various components of a company’s operating model, the most famous of them all being Alex Osterwalder’s Business Model Canvas. Have you ever used it?
If you have encountered it at least once in your life you will have realized how useful it is in representing a snapshot of the company the moment it is filled out… But you will have realized how just as quickly it is forgotten in some folder on the hard disk or on the wall until the next workshop…
The reason this happens is that these types of representations do not take into account 3 dimensions that any strategy must have in order to be actionable. I have identified them in 3 simple words that all happen to begin with T:
- Theory
- Time
- Target
Let’s look at them in detail.
Theory
Any strategy must have its foundation firmly rooted in a Theory of Growth-that is, a set of general principles, concepts, and effects-that allows for the description, interpretation, and classification of how value is created.
A Theory is also critical for anticipating the likelihood that future outcomes will materialize based on what it has proven to work in the past.
It seems such a trivial concept, and yet if you asked your colleagues today, “What should we do more of to grow?” Most likely they would answer you with completely different versions disconnected from each other, as if they all worked in different companies.
For salespeople you would need to increase marketing, for marketing you would need to increase budgets, for executives you would need to increase sales… What is certain is that the problem is never in one’s team!
This happens when there is no shared and understood Theory on which everyone can align their mental model of how the business works with the real one.
How can you expect that a team that does not know how their engine works can repair it and even increase its performance?
If you are reading Make Progress with OKRs you will have already encountered the Strategy Focus Onepager (SFO), which takes literally the concept of being “on the same page” when it comes to strategy.
In the screenshot I attach below you can see how there is a specific area in which to describe and disambiguate this information that is the connecting point between strategy and execution, between theory and practice!
You can see the theory as a representation of what is called the persistent model, that is, the most stable part of your business on which to link the next growth strategies. From this model, KPIs are extracted, that is, all the indicators of the health of each department and consequently of the business itself.
The more energy invested in this step, the less it will take to set effective goals.
Time
The second T concerns the dimension of time. It is not only important to know what to do-and consequently what not to do-but when to do it.
Making time visible helps teams prioritize activities in the right sequence and “synchronize,” a term I prefer over “alignment” because it indicates the fact that you have to get to your destination at the same time.
In SFO, the strategy is constructed by intercepting four time horizons with specific effects:
- 5 years – long term (why)
- 3 years – medium term, impact on business model and market (where)
- 1 year – short term, impact on innovation and business as usual (what)
- Next four months – execution tactics (how)
Time is a critical variable in any strategy. Eric Schmidt, Former CEO of Google, often talks about a concept that every leader should strongly consider: that of time compression.
If you could have infinite time you could do anything right. Your strategy would be exact, your products would be perfect, they would have no bugs, and your marketing campaign would be correct, plus your team would also be able to acquire the right skills… The problem is that we are experiencing time compression, and many of the technologies we are developing are compressing it even further. Think about how quickly you can get answers from AI … or bring new solutions to market.
This concept has much deeper consequences in society, science and politics. But wanting to stay within our perimeter, what is important to highlight is that when time accelerates, an equally rapid ability to react is required.
The SFO is also the fastest, most agile and least expensive document to update frequently that will help you be sure to systematically intercept priorities with timing worthy of a pit team. One of our clients told us that “this alone is worth the price of the ticket!”
In the book you will find the link to download this and all the other tools.
Target
You cannot know a priori whether a decision is right or wrong, but you can know whether or not it is the right size. SFO will help you make sure that they always are by relating the targets you aspire to-described in the right-hand part (yellow column)-to the decisions-described in the left-hand part.
In three to five years, if your ambitions are achieved, the organization will be completely different from what it is today. It will probably have to be able to handle volumes double or triple, or an order of magnitude higher, otherwise it will mean that the strategy itself is not working. If that happens then marketing, distribution, sales, and much of your operations will also be significantly different.
It means preparing for the future, which, as we saw in the previous paragraph, will approach at ever-increasing speeds.
Some companies are in the fortunate position of overinvesting relative to the competition. Others must play a smarter game, working ahead to scale their systems.
In any case, talking with numbers removes any ambiguity from communicating strategy. Listen to how the music changes if I were to tell you that in three years the company has a goal of going from 30 to 300 customers–how would team management change?
All it takes to increase performance by 10 percent is to work a little harder. But probably in this scenario the investment of time and resources invested in the strategy would not pay off in the slightest. To achieve a 10× increase in performance is otherwise.
Judging from this LinkedIn post of mine that went viral, many seem to agree with this. How about you?
Q2 has just begun,
there is no better time to work on strategy.
ALWAYS MAKE PROGRESS ⤴
-Antonio
