We have seen it countless times – the team that looks like it will win the championship at the start of the season but ends up failing to reach the finals or, worse yet, with the wooden spoon. But what if you could test out that team before the start of the season? Try a few different combinations? Make some trades based on what you learn? One of the most common criticisms of strategy is that ‘it all looks great on paper but will not succeed in execution’. As an advisor I have witnessed this from a few angles – developing a strategy with an organisation, helping to implement that strategy or even implementing a strategy developed by others. Regardless of how ‘good it looks on paper’, in all cases the success of the strategy is always leveled at the result of the implementation. In fact, as Roger Martin argues, without great execution you don’t really have a strategy at all.
There are many examples of strategies which have been implemented successfully with careful and calculated planning in all industries, and specifically in TMT. Look at Apple’s ‘I-Strategy‘ (IPod, IPad, IPhone, ITunes) which was (is) a vision executed to near perfection. This took multiple years with large programs of work to implement but probably started as a strategy document (email?) outlining Apple’s choice to venture into portable entertainment and content. For each example of an Apple there are myriad examples of failed implementations, ‘money sinks’ and attractive documents sitting on the CXO’s shelf.
A different way to look at strategy and its successful implementation is through the eyes of the start up – the lean start up. By this I mean the dorm room dwelling, idea-rich, resource-poor entrepreneurs who are fueled by passion and who access the skills and expertise of not-for-profits (NFPs), friends or even family. This is not a brand new concept however my experiences in both a lean start up and a corporate environment have uncovered some principles which if employed by more mature less agile organisations could change the game for their strategy implementations:
1) Don’t guess, test your choices in market: With often just a bit more than a hunch that a growing profitable market exists start-ups, particularly those that are digitally-based, use customer feedback to test the choices they make (where they play, how they win). A/B testing (this button or that button) on app or web functionality is very common in these organisations and similar approaches can be applied to a corporate or business unit strategy. Research you perform on the strategic plan will get you to a point but building a beta version of a new product in a new market and recieving live feedback, will confirm or even change the shape of your choice – in most cases for the better.
2) Speed to market can save money and improve the likelihood of a better, quick implementation result: Start-ups spend less time analysing and more time testing. They see a potential gap and seize the opportunity, learning as they go. Larger organisations can get bogged down in ‘analysis paralysis’ and indecision, which is as much about company cultural as it is about strategy execution. The point here though is that there is a trade off that is often overlooked – spend a year developing and analysing a choice or go to market in 10 weeks and learn from the result. Both options may cost the same but the latter will be better placed to succeed in implementation with the bare bones of the strategy (new product, business) in place.
3) Minimum Viable Product first, scale second and perfect the idea third: Speed to market means that ‘Minimum Viable Product‘ (the bare bones of the concept or business) is the goal. If a new product or a new business unit in a new market was your choice – design for the basic experience you want to create with your customer but use ‘sticky tape’ for the operating model. Once comfortable with testing and learning, look to drive scale and optimise around the concept. Few start ups have fully automated processes, a CRM, integration into core systems and an HR team in the MInimum Viable Product stage. This will enable you to fail fast and cheaply but also to identify the break points in the construct as your concept achieves scale.
4) Be prepared to fail fast and learn: Start-ups fail. In fact there is a founders dinner held in San Francisco where you cannot attend unless you have failed at least once. Strategic choices can also be ‘failures’ when they are poorly implemented or not implemented at all. Exiting a concept that you know will not work because you have tested it in market or with users is likely to be less expensive and better at informing the ‘right’ strategic decision than our analysis paralysis example. Key here is failing and learning – informs better decision making.
5) Encourage low cost, cross-functional collaboration: Larger corporations are usually not as resource constrained as a start up, however they are in many cases not as resourceful. Implementing a strategy can be made difficult with functional silos, company fiefdoms, wars on budgets and an inability to obtain the right skills to implement a strategy (part of the reason I have a job). Start ups use what they have at their disposal – they collaborate with NFPs, they use cloud-based tools like hangouts, google drive/docs and access the shared economy to support their business needs. Larger corporations can borrow this resourcefulness pulling together cross-functional expertise in collaborative, low-cost shared environments to breathe life into implementing their ‘minimum viable product’ choice.
6) Incentivise through ownership: With risk comes reward and this could not be more evident than in the world of start ups. For the ones that succeed like $19bn buyout of Whatsapp? or the ones that laugh at $3bn buyout offers like Snapchat, the rewards are huge but these companies start out as a founder putting up their savings to kick start an idea. One of the main reasons strategies fail in a corporate world is that people are often not incentivised on the success of implementation. Even if they are, in large corporations it is rarely to the extent that an employee would be forced to make the kinds of decisions a founder has to. If greater than half your salary was tied to implementation targets with upside on success, I imagine failure would be fast…but success would be sweet.
Is undertaking any of the above a ‘silver bullet’ of successful implementation? To be clear, there is no substitute for informed and iterative decision making about ‘where to play and how to win’ choices your company makes. However through the lens of a start-up, the more time and money spent on analysis paralysis or perfecting a concept before going to market and testing and learning – the more likely your strategy will just ‘look good on paper’.