Strategize for Success: Elevate Your Organization's Strategy and Goals

Welcome back to creating your strategy stack. In Part 2, we dive into establishing your organization's strategy and goals. If you missed Part 1, we covered the “why” behind creating a strategy stack, with a focus on the Mission, North Star, and Vision.

Looking ahead, Part 3 brings together the Product specific Vision, Roadmap and Goals.

To kick us off, here is the map for today.

What’s in a Strategy?

A great business strategy doesn’t just tell you how to make an impact (or win). It also showcases why your organization is uniquely positioned to do so. When done correctly, the strategy is rewarding and ensures the organization moves forward together, as one.

As is the case for all parts of the strategy stack, the organization’s strategy should be easy to recall. If' it’s confusing, long, or complicated, the likelihood of remembering it - and consequently putting it into motion - is slim to none. Instead a solid strategy identifies a small number of focus areas that, if you navigate successfully, will bring the organization closer to achieving its vision.

There are often four components that come together to define an organization’s strategy.

1. Customers: Who is your ideal customer? Often referred to as “ideal customer profile” or ICP for short. Your organization and its products exist to serve your ICP. If you’re murky on your customers and what make them tick, your products - and consequently your organization - are likely to miss target as you don’t know who you are selling to or who you are building your products for; leaving your company failing to realize your Mission → North Star → Vision.

2. Business: What type of business are you are? Are you a for profit or non profit? Are you appealing to premium buyers, low end of the market or somewhere in between? Remember your ICP and the characteristics that make them unique.

3. Competitors: I’ve never believed it when a founder told me they did not have any competitors. It simply means you didn’t look hard enough or were favoring the ostrich stance of putting your head in the sand. We’d all love to believe our ideas are unique, but the world is a big place and there is brilliance everywhere. Instead get to know your competition as they’re going after your ICP too. Identify their strengths, weaknesses, opportunities and threats (SWOT). Use this insight to differentiate your organization from others in the space.

4. Macro: Refers to the macro environment which encompasses the current state of technology, culture, economics, politics, and your industry. All of these factors impact your ICP. As a result, they impact your organization as well. For example, AI is everywhere today. What impact will AI have on your industry and the behaviors of your ICPs? Even though the macro environment conditions may change, the strength in your strategy is being able to navigate the ups & downs.

While I cannot share the strategies given their confidential nature, the approaches were similar where I have worked.

• The strategy identified 3 to 5 concrete investment (or focus) areas which, if advanced effectively, bring the organization closer to reaching its Vision and North Star.

  • One investment (or focus) area aligned to the business as it stands today.

  • A second one represented a high priority customer need.

  • A third called out a new offering.

• I also recommend an investment (or focus) area acknowledging the employees, for example tied to the company culture and internal improvements.

• Alongside the investment (or focus) areas, a narrative helps to summarize the “why” behind the selections. Using clear, simple, and concise language enables employees to easily recall the reasoning.

Questions and Answers:

• Can you have multiple ICPs? Companies are typically formed to meet the needs of one ICP. The ICP is your priority 0 - e.g. the most important audience for your organization. There may be secondary or tertiary audiences you serve via some products all in the name of benefitting your ICP.

• Do the points above apply to both B2B and B2C? Yes. You still need to know who you are targeting, why you are targeting them, how you are unique, and what you have to offer vs. the competition.

• Are there templates which can help an organization define its strategy? Yes. Here is a detailed template for developing your business strategy. Lenny’s community newsletter also shared a link to a template.

• What about the situation where everything is important and urgent? As Adam Fishman says, ”When… everything is the number one priority then you have a strategy problem.” If you find yourself in this spot, work with leadership to identify priorities and align resources to the agreed priorities.

• Is strategy the same thing as planning? To put it simply, strategy involves outlining why you’re going to win against competitors while planning involves figuring out what you’re going to do. Strategy is a lot harder since it involves much more ambiguity and things that are out of our control, but it has the potential to make a much bigger impact (link).

• Does the strategy change over time? Yes. I recommend revisiting your organization’s strategy on an annual basis. At that time, you address changes in customers, business, competitors, and macro factors. Note: If one of the four components experiences a drastic shift before a year, acknowledge the change and review your strategy to see if adjustments should be made.

• Does a strategy help to indicate what an organization won’t do? Yes, that’s equally important (some will say more so) than what you will do. A clear strategy outlines what an organization will - and consequently will not - do.

Looking for further insight into how to develop your company strategy

GitLab shares their process, though not their current strategy. Other companies offer views into their strategy through official documents such as annual reports, strategic plans, or blog posts.

1. Google (Alphabet)

2. Microsoft

3. Amazon (letter to shareholders)

Adam Fishman also writes about the approach taken at Patreon and Imperfect Foods.

How do you feel when you’ve scored a gooooaaal?

Whenever Arsenal made it to the Champions League, I always loved it when the commentators screamed out “goal” in such a way that it seemed to stretch on for minutes. A similar feeling occurs when a company achieves one of its goals.

Goals are driven by the organization’s strategic priorities. Achieving a goal should bring the organization closer to achieving its Vision. Here are principles I recommend keeping in mind when establishing your company’s goals.

• Anchor on the top 5 to 7 goals: With too many goals, it means everything is a priority … which is the same thing as nothing being a priority. Instead identify the top 5 to 7 goals and make them memorable and clearly indicative of priorities.

• Align the goals to reflect how they ladder up to the Mission → Vision → Strategy: Goals should be distinct and not derived from another goal.

• Goals should be outcomes, measuring the impact of a company's activities. Outputs, on the other hand, are short-term actions (steps) that a company takes to achieve its goals. Outputs should not be goals in their own right.

• Repeat, repeat, repeat your goals: Start every company All Hands sharing progress, learnings and challenges against the company’s goals. Keep them top of mind and remain transparent on the progress and celebrate achievement.

• It’s ok to have goals in yellow or red: This means the company is stretching itself appropriately. If all goals are constantly green, it’s likely the goals were too easy to obtain and are not pushing the organization. It could also indicate a lack of psychological safety and a fear of sharing the actual status.

When and how do you define company goals?

• Define goals on an annual basis: For example, if your company’s year starts in January, your annual planning (including goal definition) often begins in October or early November.

• Index on quality goals and outcomes over quantity: As noted in the principles above, keep to a small number of clear and easy to remember goals. Consider a combination of input (behavior changes) and outcomes (moving x to y).

• Being SMART works for companies too: Even though SMART is often associated with individual goal setting, the same approach works for establishing organizational goals too:

  • Specific: Well-defined goals increase the likelihood of accomplishment as the objectives are clear and understood.

  • Measurable: This is where KEY RESULTS come in as they indicate progress towards a goal. KEY RESULTS help you know if and when the goal will be reached.

  • Audacious yet Achievable: Craft bold aspirations that stretch your company's capabilities while remaining attainable within the realm of your current resources and expertise

  • Relevant: Align your company’s goals with the overall Mission → Vision → Strategy of your business.

  • Time-based: Goals should be reached within a year or sooner to provide a sense of urgency and the opportunity to ensure the goal is Measurable and Achievable.

Bring together your company strategy and goals onto one page for ease of review.

Thoughts on Goals vs Objectives

The terms goals and objectives are often used interchangeably. Goals, as shared above, are organizational targets - what the organization wants to achieve (the end result) and are measurable in nature. For example, goals can be related to achieving a certain market share or revenue level, or they might be about delivering value to customers or employees. They’re also celebrated by a shout out of gooooaaal [I couldn’t resist].

Objectives are at a finer granularity. They are more specific, steps taken to reach a goal. For organizations that use the OKR (Objectives and Key Results) framework, objectives are the targets set to achieve the goals.

At the organizations where I have worked, we have found goals to be sufficient. Adding in Objectives (or Initiatives) created an extra level of complexity that led to confusion and unnecessary process. I appreciate that is not the case for all organizations. As with everything in product management, it’s both art and science to identify what approach is right for your organization.

Difference between Key Results and KPIs

Chris Butler has a great saying “OKRs are just dreams without grounded key results”. I apply the same thinking with key results supporting goals.

Key results represent organizational outcomes and enable you to measure progress towards your goals. See the references to x%, # new accounts, and other numbers in the Company Strategy and Goals on a page above. These are your key results. On the other hand, KPIs track the incremental progress (or performance) teams make towards a goal and the supporting key result.

Other differences include:

• Key results should not be easy to achieve. They should be a push, a striving to do and be more. KPIs, given the incremental nature, are more realistic.

• Key results align to goals and are reviewed on an annual basis, thus they are longer term. KPIs are looked at more frequently, ranging from daily, weekly, or monthly, depending on the metric.

• Key results are your best guess, they are what you hope to happen. Thus they are assumptions grounded in your strategy. KPIs are tactical and realistic, yet if your team achieves their KPIs, they bring you towards your key result.

Example:

• Objective: Increase brand awareness.

• Key Result: Achieve 1 million website visitors in the next quarter.

• KPI: Daily website traffic, social media mentions, brand search volume.

Key Learnings and looking ahead to the finale (aka Part 3)

Key learning #1… Even though your dog might look totally cute in a hat, it doesn’t mean they agree with your choice of attire.

On a more serious note, here are the key takeaways from today’s post.

1. Four Components of Organization's Strategy:

   1. Customers: Identifying the ideal customer profile (ICP) is crucial for aligning products and services with customer needs.

   2. Business: Defining the type of business, whether for profit or non-profit, and understanding the unique characteristics of the target audience.

   3. Competitors: Acknowledging the presence of competitors, understanding their strengths and weaknesses, and using this insight to differentiate the organization.

   4. Macro: Considering the macro environment, including technology, culture, economics, politics, and industry trends, and understanding how these factors impact the ideal customer profile and the organization.

2. Annual Strategy Review:

   1. It is recommended to revisit and potentially adjust the organization's strategy on an annual basis.

   2. This review should address changes in customers, business, competitors, and macro factors.

3. Establishing Company Goals:

   1. Top 5 to 7 Goals: Focus on a small number of clear and memorable goals to avoid diluting priorities.

   2. Alignment with Mission, Vision, and Strategy: Ensure that goals are distinct, measurable, and directly contribute to the organization's mission, vision, and strategy.

   3. Repeat and Transparency: Regularly communicate and repeat goals to keep them top of mind, and be transparent about progress, learnings, and challenges.

Up next in our final installment of the strategy stack series, we will focus on the Product portion of the strategy stack. This is where each Product team defines their Mission, Vision and Goals.

See you soon!