Every successful company needs a strategy to define how it will win in the marketplace.
But entrepreneurs, juggling many priorities, are sometimes inclined to dismiss strategy as a theoretical exercise and a distraction from selling their next customer or hiring their next employee.
So how do busy entrepreneurs set strategy in a way that remains practical and relevant to what their company is doing day to day? Our partners reflected on this question based on their experience with companies they’ve run and advised.
Mitch is an executive with 27 years of strategic, operational, and financial experience guiding development of middle-market domestic and international software companies. He has established 16 international operations in Latin America and Europe that achieved accelerated revenue growth based on proven key performance measurements.
"Successful entrepreneurs understand the buyer personas, customer needs and market segmentation they are targeting. They use their annual budget process to align the team around strategy. They utilize weekly staff meetings and one-on-one meetings with their managers and employees to ensure tactical plans are being developed and executed to achieve the strategy.”
Keith is a Newport partner in New England who has been president of operating divisions in four different Fortune 500 companies, in sales/marketing roles as well as other strategic leadership responsibilities.
“A best practice I've seen work very well is for entrepreneurs to set aside 15 minutes daily for what's called a "Strategic Time Out". It's booked on their calendar as a meeting, with no electronic or inter-personal interruptions allowed. After shutting out all distractions, the task is to think deeply for 15 minutes about how they have spent their time today, and whether all the tasks they have performed are truly worthy of their time. If not, action must be taken to ensure those non-essential tasks are delegated, done less often, or not done at all. Doing this consistently every day will free the entrepreneur from the "Tyranny of the Urgent" and allow them to identify and focus on activities that truly are the highest and best use of their time. A natural consequence will be a mindset-shift that results in identifying and concentrating on the two or three truly critical big issues they face, clearing the fog for strategic thinking to begin.”
Helen’s career has focused on developing and executing strategies for business development and growth for leading retail and consumer companies. She has worked with private equity for more than 25 years-- as CEO of seven PE-owned consumer and retail companies and as an operating partner to eight PE firms.
“Every CEO, whether of a start-up or Fortune 500 company, must keep many balls in the air. This is the nature of any business. For an entrepreneur with a start-up, strategy is concentrated on two issues: market size and capital. These are critical to both survival and growth. Without a growing market for the busy entrepreneur's products or services, there is no growth and no capital. Capital comes with the success of the market strategy.”
Kim Denney is an experienced Houston area leader with a record of solving top- level problems as an executive with broad responsibilities in the Chemical, Petrochemical, Energy, and Manufacturing industries.
“Business owners who take the time to reflect on what differentiates them in the marketplace, what isn't working (both internally and externally), and how to succinctly articulate their company’s direction are able to mold an internal culture and a cohesive face to the market. This is a critical requirement if a company is going to be both nimble and efficient in today's marketplace. Those who take an hour of “soak time” once a week for a few weeks to talk this over with their leadership team, consider alternatives and collect market data have come away with valuable insight. As a trusted advisor, I've found that helping leadership teams drive through this, even with the demands of the day-to- day business pulling at them, results in strong alignment, shared vision, and clarity of decision- making that saves time and effort in the long-run. The payback on this sort of exercise is tremendous.”
Ferey is a senior strategic investment professional with 25 years of experience spanning management consulting in 12 countries, investment banking and principal investing, as well as serving as CEO/President of high-technology ventures.
“The key is to have a framework that allows for strategy to remain dynamic rather than pre- set. This requires regular workshops revisiting assumptions and insights (two to four times a year).”
Fred has been successful both as an executive and an entrepreneur. Much of his career has been spent in different sectors of the healthcare industry.
“It's a challenge to get an entrepreneur to step back and discuss strategy. They typically are focused on a fairly narrow product/service offering, so broad strategic thinking (portfolio strategy) is less relevant than getting them focused on specific functional strategies (new markets, messaging, capital acquisition, and (depending where they are in their life) succession or exit planning strategies.”
Lynn Lednicky is an experienced leader with a track record of success in the energy industry. As President and Founder of Lednicky Enterprises, he has provided expert advice to the energy, utility, and infrastructure sectors. His engagements have included M&A support, operational and financial restructuring, renewable energy, project development and financing and advising on production and use of natural gas as a domestic transportation fuel.
“Many entrepreneurs set aside time to focus on strategy. Most recognize the need for doing this, but the execution is spotty. The problem is less failing to see the value of strategy than failing to perform the practical act of focusing on strategy development. Some entrepreneurs tackle this challenge through the use of outside peer networks that provide contact with other entrepreneurs with the same problems and challenges (e.g., Vistage, entrepreneur forums or networking groups). These networks reinforce the importance of strategy and can provide a push to move out of the day-to- day and put energy into strategy development.”
.jpg?width=150&name=otto_billie-46_200x200_(2).jpg "Billie Otto")
Billie is a Newport partner in the Pacific Northwest who has been Executive VP and CIO of TrueBlue Inc. (NYSE: TBI) the largest industrial staffing firm in the U.S.
“Making the strategy exercise worthwhile can be as simple as identifying what is keeping leaders up at night. If what they are doing isn't working, likely there is lack of clarity and alignment so devoting time to strategy will actually make things easier. Bringing strategy to life involves being very clear about a relatively small set of decisions. Writing down these conscious decisions forces some clarification and sharing them with others creates another layer of clarity. Leaders who persist to this point find critical gaps in what they thought was understood and what actually was. Aligning a team around a shared vision (strategy) drives purposeful actions that will efficiently surface flaws in assumptions and lead to quicker course corrections along the way.”
Kevin Poole is a seasoned leader with diverse experience as both a senior advisor to CXOs of middle-market firms, and as an operating executive at a Fortune 500 company.
“Smart entrepreneurs will devise a strategy focused on the intersection of the products/services they offer and the customer segments that place the highest value on their offerings. By focusing on this specific set of potential customers, the entrepreneur can often capture higher margins during the all-important start-up phase that can be re-invested in driving company growth.”
Mark is a co-founder of Newport Board Group and its Chief Knowledge Officer.
“Successful entrepreneurs I know definitely have a strategy to be distinctive and to beat the competition. But they wear it lightly-- it's woven into the pattern of what they do every day, as opposed to being enshrined in a lengthy document or printed on signs that hang on their office wall. They find ways to make the strategy pertinent to decisions such as which new business prospects to prioritize or which trade show to attend. They emphasize that strategy is often about deciding what not to do.”
John has delivered top- and bottom-line results running a wide range of companies and dealing with challenges like acquisitions, lean manufacturing, supply chain optimization/low cost sourcing, new product development and brand and channel management.
“The entrepreneurs I know recognize the need to have a strategy statement to share with potential investors and stakeholders. Their challenge is to modify it, as appropriate, as market conditions change.”
Eran has diverse experience in executive management, venture capital, private equity and M&A, including turnaround, restructuring and special situations transactions.
“The entrepreneurs I know are handling this issue through holding an annual meeting with top management to discuss their strategy, while convening quarterly or semi-annual meetings to assess changes in the marketplace. In the tech market, there are more dynamics/shifts than in a traditional industry. For tech companies the key annual meeting is held offsite for a 2-4 day session. In addition, where an institutional investor is involved (e.g. a VC), the investor typically drives the session, often participates in it, and brings in people from their network who can contribute domain expertise in the company’s market.”
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