
Of course no one just throws the whole proposal away. We hold on to our action lists and our objectives. It’s just that changing events and new circumstances lead us away from our original policies. As a result, we often focus on actions that lead us off-course, although they may feel right at the time. Tempting opportunities may not fit the plan, but they look easy or profitable and we follow them anyway. Why? Because we missed something critical from our strategy: alongside our long term targets, we also need a clear picture of other possibilities from which we should steer clear.
The worst best deal I ever saw
I know a software startup which fell badly into this trap. They had prototyped an excellent cloud-based product which effectively simplified some complex business functions. They worked out a sound strategy and raised enough investment to get their project under way. The problem, which finally defeated the team, did not look like a problem at all in the beginning. In fact, it appeared to the CEO as a great opportunity. He had planned for a tough start to the business: winning a number of small deals and gradually growing a customer base. However, within a few months, one early customer – a huge insurance company – was so impressed with the software that it signed a very large contract. The CEO was delighted. They could now fund their operations without asking for more investment, with a guaranteed customer for their planned new features. Within a few months, this one client provided a significant proportion of revenue. And, as good engaged customers do, the firm had feedback and feature requests and proposals of its own. Within the first year, the original roadmap for the software had been overhauled. The developers mostly worked on fixes or features for the one golden customer. Reviewing the team’s original plans, the CEO knew they were off-track, 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 heart of a strategy
What went wrong? The team missed out the one element which I believe is essential to a strategic plan. They did not know when to say no. Most of our strategic plans are built around what we intend to do. But I suggest 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, because they will lead you off-course. If your success relies on selling to major enterprises, don’t be distracted by some easy wins in the mid-market. Read more about strategy:- UBM CFO steps down during implementation of “events first” strategy
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The goals of non-goals
When you know how to say no, you are less likely to run into dangerously attractive offers that hide unexpected problems. With a good set of non-goals it also easier to evaluate your original strategy, because you will be following it more clearly and with more responsibility.Share this story