All across the country, in large and small companies, public organisations and private firms, strategic planning keeps executives awake at night. Hours are spent in meetings, setting objectives and reviewing budgets and resources. Finally, the completed management strategy is presented with optimism and confidence. And then… too often, the plan isn’t followed.
Case study of the worst best deal
An example of this is a software start-up that had prototyped an excellent Cloud-based product that simplified complex business functions. A sound strategy was developed and enough investment was raised to get the project under way.
The problem that defeated them hadn’t been seen as a potential problem. In fact, it had appeared to be a terrific opportunity. The CEO had planned for a tough start to the business: winning a number of small deals and gradually growing their customer base. However, within a few months, one early customer—a huge insurance company—was so impressed with the software that they signed a very large contract. The CEO was delighted: with a guaranteed customer for their planned new features they could fund their operation without asking for more investment.
Within a few months, the client provided a significant proportion of their revenue. As good and engaged customers do, they had feedback and feature requests and proposals of their own. Within the first year, the original roadmap for the software had been overhauled and the developers mostly worked on fixes or features for the one golden customer.
The original plan
The CEO knew they had deviated away from the original management strategy and they needed more investment to pay for new development for the original planned Cloud service, while also supporting their influential client. But as one potential backer said, “We invest in software vendors, not in service providers.”
The answer? They found another large customer and so their story continued. While other start-ups were growing rapidly on the cloud and finding attractive exits, our friends had no IPO in sight and lost their best staff to more exciting opportunities. They settled down to be a supplier to a few large companies. I expect they will soon be acquired cheaply by one of those large customers and become just another part of the corporate IT environment.
The heart of a strategy
What went wrong? Simply this: they missed out the one element that’s essential to a strategic management plan. They did not know when to say ‘no’.
Most of strategic plans are built around what we intend to do. However, you also need a useful definition of what you are not going to do.
If your strategy is to attract thousands of customers to a moderately priced subscription service, be clear that you will not sign up a single major customer, as they will lead you off-course. If your success relies on selling to major enterprises, don’t be distracted by easy wins in the mid-market.
In every plan, from a single-feature specification to a multi-year corporate strategy, insist on at least one simple paragraph describing ‘non-goals’. Like any other element of your proposal, non-goals require research, work and negotiation. Once you have crafted this clear map of where you will not go, the journey becomes much easier.
The goals of non-goals
When you know how to say no, you’re less likely to run into attractive offers that hide unexpected problems. With a good set of non-goals it’s easier to evaluate your original management strategy, because you’ll follow it more clearly and with more responsibility.
Of course, things go wrong in any project. Non-goals not only give you greater accountability, they also enable you to speak to mistakes and strategic errors with more authority and integrity. In contrast, when you drift away from your original strategy, the reasons why, the missteps along the way, and the consequences, are all much more confused.
In short, learn to say ‘no’ when creating your strategic plans.
