The Best Strategy Framework
Strategy is hard, here’s a simple framework that makes it easier.
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Business strategy is hard. You have to contend with shifting markets, aggressive competitors and fickle customers. Amidst all of that turbulence, you need to create a plan that not only gets you through but makes sure you win!
It’s a bit like playing chess in a small sailboat in the middle of a hurricane.
As a result, most organizations struggle with strategy. Instead of creating real strategic plans, they cobble together a series of short-term plans and hope that everything works out. If you don’t plan too far in advance, you can’t be wrong! However, it also means you are almost always reacting to the world instead of being proactive.
This is true of so many organizations that a lot of people haven’t even been a part of a real strategy planning process. They might not have ever seen a solid, well built strategy! If you haven’t seen one, it’s hard to get started on building one yourself.
The good news is that the best strategy building framework I’ve ever used is also extremely simple and easy to adopt. I’ll walk you through it here, and it comes in 3 parts:
Part 1. Theory of the Future
The world happens to us much more than we happen to the world. Understanding how the world around you will affect both your business and your market is the place to start.
Think about the next 18 months, and then answer questions like:
What will change in the macro economy?
How will the needs of our customers change?
What changes will our competitors make?
You will end up with a long list of events and shifts that you expect to happen, and a timeline that maps out when you think they will land. You might be wrong, as predicting the future is hard! However, these working theories don’t need to be completely correct to be accurate.
What’s more important is that you’ll have an educated guess about the playing field you will face, which will inform what paths might work.
Part 2. Your Goals
I’m sure you already know how your business needs to grow and improve. Take these goals and turn them into 4-5 metric-driven goals for the next 12 months. Examples include:
Growing revenue by 200%
Reducing customer churn by 25%
Increasing active users from 2,500 to 5,000
In all cases, you need a specific metric and a goal for that metric (either an absolute value or a relative percentage). If you have more than 4-5 then you have too many, the hard part is choosing a few! That choice helps focus the strategy we will build next.
Part 3. The Strategy
A strategy is simply your plan to reach your goals through the minefield the future presents. With your theory of the future and your goals in hand, you’ve already done the hardest parts!
Take each goal and determine:
What do we need to change to reach this goal?
What changes in the market will make it harder? What changes might make it easier?
How can we mitigate the risks and lean into the advantages?
A great strategy will give you multiple paths to success. Because the future is uncertain, we need that kind of optionality to adjust to shifts in the market. This usually takes the form of bets (See Making Big Bets), and we want a portfolio of bets so that only a few of them need to pay off for us to win.
You can understand why having too many goals is a bad thing. With too many goals you have too many paths and don’t really have to choose one, because you can always jump to another. Fewer goals reduces our paths and creates focus.
You can also understand why your theory of the future is critical to a successful strategy! If you aren’t planning for the world around you to change, you will be stuck reacting to the world instead of making your own way. The better you predict, the better you can execute.
That’s the process! I love it because it’s so simple, and that allows you to repeat the process if your theory of the future ever proves incorrect. Whoops, a competitor makes an unexpected product announcement? Repeat the process and update the strategy. Ouch, the macro economic environment crashed? Repeat the process and update the strategy.
Having a lightweight process like this makes your strategy agile, which is a huge competitive advantage.
For more on Strategy and Planning, see: