There is a lot of great work on strategic planning and leadership and it turns out to be a favorite topic for me. Much of the literature is written about great companies for companies who want to be great. And much of it centers around the aspects of leadership that motivate large groups of people to accomplish extraordinary tasks.
For some years now I've struggled to connect these inspirational thinkers with the needs of the entrepreneur and the small company. How do you discuss company culture when the company is only two people? What good is leadership in a company of one? How can you have a strategic vision at a time when you don't even know what products you are going to sell? On top of it all, there's a million things to learn and to think about during the startup period and perhaps entrepreneurs don't need a million and one.
We have recently enhanced our process with an activity we call Strategy Day which is a 1/2 day strategic planning session aimed at entrepreneurs. If there was ever a place to introduce strategic vision to entrepreneurs, this was it. After a dozen or so Strategy Days under the belt I have really been impressed with how entrepreneurs respond to a discussion of strategic vision at such an early stage in their business. Here is an overview of the process.
Strategic Vision sets out to answer four basic questions:
- What do we believe?
- Why do we exist?
- What do we do?
- So What?
What do we believe?
Every entrepreneur brings a belief system and a set of core values to the game. These values will no doubt have an influence on how the company forms and conducts business. This will happen either directly or indirectly as key decisions are made each day. It's a good idea to acknowledge this and articulate those key values so you can refer future employees to them. Core Values will guide the company in troubled times and provide a "moral compass". A list of three to six key values is ideal.
Why Do We Exist?
A Finance professor once explained that society has a limited set of resources and ultimately, society rewards those who provide value with resources they aquire from those who don't provide value. In the efficient markets of capitalism, the market makes these decisions on behalf of society. It's important for a new company to decide how to communicate their value to the market and to remind themselves of this on a regular basis. A Statement of Purpose is a simple one or two sentences that describes the essential reason why society should allocate it's limited resources to the company.
What Do We Do?
I really like the way Jim Collins provided a framework to answer this question in his fine book, Good To Great. The Hedgehog Concept is where Passion and Unique Core Competency come together in a way that makes Money. If you are really good at something that you really love and it can make a lot of money, that's a Hedgehog Concept. So when you decide what it is your company does, test it to see if it qualifies as a Hedgehog Concept.
Again Jim Collins helps us out with a concept called the Big Hairy Audacious Goal or BHAG. A BHAG is a huge goal so compelling that it captures the imagination and aligns effort. Yet, it is achievable so people can believe they will get there. It exemplifies the idea that profound insight lies in simplicity. The message is so clear that people get it right away. One of the best BHAG's ever was when President Kennedy declared in 1963 that before the end of the decade, the United States will land a man on the moon and return him safely to Earth. Having a BHAG is much more ingaging than a boring old mission statement. Does your company have a BHAG?
When you summarize all these statements and concepts into one document, you have one very powerful tool to inspire, focus, guide and challenge you company on its way to greatness.