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Strategy Development: The Key Principles

by Lucas Goransky & Jack Boutchard, on Jul 6, 2021 12:26:42 PM

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There is no right or wrong way to build a company strategy. That was very clear at the 2021 Strategy Fest where we heard a range of different speakers bring their own perspectives, tools, and frameworks to the table that have worked for them in the past. Because business is so nuanced and multi-faceted, you’ve got to find your own way. You’ve got to build a strategy that’s going to be effective for your unique use case.

With that being said, there are some critical principles that are common across the board. These principles are foundational to the craft of creating a robust company strategy and if you ignore them, you’re likely to come unstuck when things don’t go the way you thought they were going to go.

Thibault Mesqui, a passionate leader in the FMCG space, used his time at the Strategy Fest to give us 5 principles that strategy is built on, and we wanted to share with you here. He was of the firm belief that we often overcomplicate this piece and that if you just stick to these simple principles, you won’t go wrong.

“Strategy shouldn’t be all the nitty-gritty details, about how to put someone on the moon. It should be your idea, your long-term vision, and a few building blocks to get there. That is what your strategy should look like.”

Thibault Mesqui

Have a Bold Long Term Vision

When you’re running a business day-to-day you are often forced into a very short-term mindset. You’re tackling issues that crop up, working with customers, making incremental improvements to operations, and doing anything that you can to push the company forward that day. You very rarely have the chance to actually step back and think about the long-term future of the organization.

That’s what strategy is all about, according to Thibault. Strategic decision-making is about getting out of the weeds and thinking about the bigger picture. In his mind, strategy should be the long-term anchor that a company uses to align their short-term decisions with. If your day-to-day operations are not building towards this long-term vision, then something is off and you need to change course.

Thinking long-term requires a different mindset as well. And it’s something that we’re not typically that good at. With such an uncertain world, it is very difficult to imagine what your company is going to look like in 5-10 years’ time. But Thibault’s point is that you have to come up with a vision of some sort is crucial so that everyone has somewhere to aim. Whether you actually manifest those results or not is irrelevant at this point. It’s more important to have a common goal and a common objective that everyone can rally behind so that you’re pulling in the same direction.

And while you’re at it, make it bold! Humans are storytelling creatures, and we all want to be a part of something special. We want to be part of a big dream. So, as strategists, we should be bold in our long-term vision. If we’re not imagining the way that our company is going to disrupt the status quo, then we’re selling our employees short. And we’re not giving enough of a carrot to encourage the right behavior.

The time for realism is in shorter-term planning. When it comes to our long-term vision, we want to give people something to strive for. Why should they work hard? Why should they put everything they have into their work? There needs to be a strong reason why they’re coming to work every day. The strategy needs to be bold.

When you combine these two factors: a bold strategy and a long-term mindset, you arrive at a vision that is compelling. This is your mission to work towards and it should inform everything else that you do on a shorter time scale. This doesn’t need to be super complex or overly detailed, it just needs to act as a north star towards which everyone can orient themselves. Then, as you go, you check yourself against that vision and use it as a guiding light.

Know Where You're Coming From

The next important principle when thinking about strategy is to never forget where you’re coming from. When we look forward it’s tempting to just ignore what’s happened in the past and move on with wanton abandon. But that means we leave all that wisdom, all those learnings, and all that grounding in the past.

Running a business is a rollercoaster journey. There are some incredible highs and some incredible lows, and it’s only when you can appreciate both that you can actually make sustainable progress. When you know where you came from, you have a deeper understanding of what it took to get to where you are, and that sets you up to grow even further from here.

Some of this value comes in the storytelling aspect. Business is hard, and with standards always changing, it’s very easy to get onto a hamster wheel of achievement, constantly grinding to hit that next milestone. Psychologically this can be exhausting and we often don’t stop to acknowledge just how far we’ve come. In the strategic context, it’s the perfect opportunity to reflect on where we’ve come from and take a moment to pat ourselves on the back for it. This positive reinforcement is a crucial part of motivating the next level of business success because we are reminding ourselves of the wins of the past.

This principle also allows us to stay true to the type of company we wanted to build in the first place. When things are small, it’s easy to maintain the company culture and ethos that you want because there are very few people to manage and the DNA of the founders is still all over every part of the organization. However, as you scale, it gets more and more difficult to maintain that same feeling. As new people join and your company gets bigger, the culture can start to morph into something that you didn’t plan for.

It requires strategists and decision-makers to set that straight when needed, and the only way you’ll even be aware of it is by consciously remembering where you came from. Understanding your roots and your original mission is a key part of holding yourself accountable to the type of company you’re trying to build.

This is not to say you can’t change things as you’ve learned lessons along the way, but all it does is encourage you to reflect on the journey you’ve been on so far, so it can inform your future plans and strategies.

Put in Place Your Tactics 

Now that you have your long-term vision in place, informed by where you’ve come from, you can now come to the more practical aspects of implementing a company strategy. Here’s where you can start to get more precise with the specific action steps that are going to move you towards that north star that you’re aiming at.

“See them as building blocks, so your strategy is a bridge between the point where you are today and the point where you want to go. To have that bridge hold your foundations, the pillars should be based on facts as much as possible. The more facts you have, the more solid the pillars would be, and the more solid your tactics would be.”

Thibault Mesqui

That one quote encapsulates Thibault’s entire philosophy. He strongly believes that we overcomplicate our strategy in most cases and if we just thought of things as building blocks, we’d have something that is much more robust. The facts that we identify both internally and based on our target audience should inform our tactics which are then combined into our strategy.

These tactics represent our long-term vision broken down into smaller, more manageable steps that can be executed on in a short time frame. And each of these blocks should be realistic because they need to be achievable within a few months. When you can narrow down the few building blocks that are really going to make a difference, you have a strategy that you can rely on, and one that’s easy to communicate to others.

It’s worth spending a bit more time talking about the facts that Thibault mentions. We’ve written before about the importance of customer knowledge and here is where that really comes to the forefront. We need to understand our customers in a holistic way if we are to put the right strategic tactics in place. Too often we rely on anecdotes, untested assumptions, and generic business frameworks to inform how we act in the short-term.

In today’s data-first world, we need to be using facts. We should be doing everything we can to collect data and test our assumptions so that our decisions are coming from a solid foundation. If we don’t, we risk deluding ourselves and going down the wrong path. Every single tactic should be based on solid facts wherever possible so that we have some confidence that it’s going to work in the marketplace. This is a discipline that can set your company apart because it requires a lot of effort to get it right. But it is extremely powerful when you take this idea seriously.

You’ll be amazed at how many of your assumptions about your customer, your market, and even your company, won’t hold up under a little scrutiny. It’s incumbent on you to push back on unsubstantiated assumptions and ask for the facts that lie underneath. It's only at that level that you can be assured that your strategic maneuvering is going to be effective.

Be Decisive 

When you stand at the whiteboard and think about the directions in which your company could go, the options are endless. This is what makes strategy such a joy and such a burden at the same time. With so many different ways that you could go, how confident can you be in any single one of them?

This is a very common feeling, as it turns out. With so many choices at our fingertips, it’s very easy to fall into analysis paralysis and we end up delaying our decisions until we have better information. We just need to do some more research. We need to test another concept. We need to read this book first. We need to consult some more people.

All of this is a trap because it gives us the illusion that we are going to arrive at a place where we have perfect information and we can then make the best decision possible from there. That simply doesn’t exist. The business world is too complex and uncertain for that.

What we have to do instead is push against that feeling and be decisive instead.

We Have to Make Choices

If you look at any of the great business leaders throughout time, they all shared a penchant for taking decisions and moving forward even if they weren’t 100% sure. This confidence and decisiveness comes from an acknowledgement of the fact that they’re never going to get to a 100% confidence level and every second that they waste in contemplation is time that is lost forever.

It’s a much better strategy to be decisive, make bold moves, and then learn from those. Because when you are out in the marketplace and you’re making decisions, you’re gathering information all the time. These real-world tests are going to give you the immediate feedback that you need in order to adjust your thinking and get onto the right path sooner.

This mindset of continual iteration is one that is bandied about a lot in startup circles, but in larger organizations, it doesn’t seem to feature as much. If you are able to incorporate this principle into your strategy, you’re going to find that your organization is more agile, more flexible, and set up for success.

Decisiveness wins. Make a decision, fail fast, and learn from it. That’s all there is to it.

Make Your Strategy Live and Breathe

The last principle that Thibault shared was in regard to communicating your strategy. Too often a company strategy lives only in the boardroom in which it was conceived, and in the resultant PowerPoint presentation. If your strategic process ends at the point where you’ve arrived at a strategic plan, then you’re not going to succeed.

Business strategy is an ever-evolving process and it doesn’t end just because you have arrived at a neat presentation pack for your investors. It should be a working document that informs the entire organization’s actions and if you’re not giving it that space to breathe, then you’re missing the point. A strategy needs to be more than just a few bullet points and a financial projection. It’s not a one-and-done thing. It needs to have legs that stretch into every team and it needs to be the north star that everyone is trudging towards.

The way you do this is by overcommunicating it. You want to be very deliberate with how you share your strategy internally, taking every opportunity you have to articulate why the company exists, what the long-term vision is, and how we are going to get there. Every time that a team is making a decision in their silo, they should be referencing the strategy to ensure that their thinking is aligned with the company-wide vision. It should be at the forefront of everyone’s mind.

When your strategy lives and breathes throughout your organization, then it really has a chance to impact how you do things. It's only then that it becomes the pillar you need to draw from. It should be the vault from which everything else emanates.

As such, your internal communications are vitally important here. It’s almost as important as the strategy itself. It should not be an afterthought, but rather a crucial piece of this whole puzzle. Because when you integrate your strategy into the rest of your organization, it gains a life of its own and compounds in value as it goes. A company that is all aligned on one strategic mission is a powerful company. But that only happens when everyone is on board.

Let it seep into every pore, every nook, and every cranny – and you’ll be amazed at how effective strategic alignment can be.

Recap

So, there you have it. Thibault’s principles for robust and effective strategy. We really enjoyed the simplicity of his philosophy because he reminded us that it’s not always about complex, multi-layered strategic frameworks. None of that matters if you don’t have the underlying pillars in place.

Instead of getting lost in the weeds, focus on these core principles and you’ll be in a great position to make your strategy work for you. Be bold, be decisive, and let your strategy breathe. And before you know it, that long-term vision of yours will be right on your doorstep.

Topics:Festival Recap

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