In my last posting I was talking about that useful phrase, ‘The map is not the territory’ and how it applies to getting a business up and running, particularly during the fundraising phases. It’s one thing to have a plan on paper (or spreadsheet) and quite another thing when it comes to how that plan matches reality. And yet we must have a plan, or a better word is Strategy. If there is a true strategy for a business, then it adds huge strength to the offering. It turns somethings vague into something concrete. But as the strategy specialist Jeroen de Flander says, “You cannot be everything to everyone. If you decide to go north, you cannot go south at the same time.” If that sounds simplistic, believe me, I’ve seen very many businesses trying to go north and south at the same time, with less than optimal results.
So to succeed, a business must have a plan, like a builder must have a plan before commencing work on a house. The builder doesn’t have a ‘hopeful’ plan that leaves out the details! Rather the plan is comprehensive and very accurate. The two most important parts of the plan for a business are that it must have a unique place that it has decided to occupy, and a target audience that it has decided to address. In other words, niche / niche. Without these things there is little possibility of success, especially during the early stages of fundraising. We have to know ourselves, and know our audience.
Now it’s quite possible that a startup has done some strategic thinking about these matters, but there often isn’t a ‘holy book’ of strategy which can be referred to by everyone involved in the enterprise. The chances are that a lot of the strategy is actually locked away in the heads of the founder and the core team. They sorta know what they want to achieve, but have they conveyed it to the rest of their own company, let alone the market? That’s the first test of a great strategy – that it can be understood by the lower-down employees and suppliers of an enterprise. And this is not an abstract idea, because those people really must ‘get the message’ about the goals of the company.
This is why throughout history military leaders have talked to their troops before a battle, letting them know where and when the attack will take place, and what the objectives are. If everyone understands the strategy, then success is more likely, and certainly motivation is higher.
Now that I’m speaking of military analogies, (or for that matter sporting parallels) of course it’s worth mentioning tactics too, because sometimes brilliant strategies get upset by the opposition, or the weather, or many other factors. Then the organization must flex and adapt to circumstances, while attempting to remain true to the overall strategy. In other words, don’t go north at the same time as going south! A strategy document reminds everyone which way is ‘north’. If the direction is changed by circumstances, then as long as we still know where ‘true north’ is, we can temporarily act tactically to deal with the existing realities.
I often challenge entrepreneurs I meet about their strategy. Do they even have one? “Of course!” they will reply, but then too frequently struggle to speak about it with any clarity. The strategy of a company must be clear throughout the whole organization. OK, so the IT guy might not need to understand it in the same depth as the Founder, but everyone involved in the business should be able to have a watercooler moment – or make an elevator pitch – that hits all the main points in making clear what the strategy is.
This isn’t just important because the company has to be internally aligned – there’s also an external audience of potential investors (and ultimately potential customers) who are all waiting to hear what the strategy is. As I’ve said before, and will continue to say, the product or service can be absolutely genius, but it won’t mean a thing if there’s no strategy to take it to market.
So how well-developed is your strategy, and how well can you pitch it? Then ask the same question to anyone in your organization. If – as I suspect – the answer is that there isn’t a well-developed strategy document that everyone understands and buys into, then it really is time to get seriously strategic.
Learn more about the importance of a solid strategic plan in the second edition of 6 Steps: