Colin (00:01.25)

Hi and welcome to this week's episode of The Growth System, the podcast that looks at B2B growth through a systems thinking lens. I'm Colin Shakespeare.

Chris (00:09.984)

and Chris Bayless.

Colin (00:11.826)

And today we're going to be looking at the third dimension of our growth team operating system. Actually, the fourth episode in our series all about the dimensions of the growth team operating system. And as promised, this week we're going to go into strategy.

Now, in the context of the growth team operating system, guess strategy is really that sort of connective tissue really, the nexus between the deep structuring elements that we've been through already like purpose and values and that sort of rubber meets the road world like operations and everyday processes essentially the link between ideals and execution. But what I'd like to get you to do as I guess the architect of Growth Team Operating System Chris, it'd be great if you could just sort of define strategy in the context of the Growth Team Operating System for us.

Chris (01:06.657)

Yeah, of course. mean, we, we really describe strategy within the context of the OS as being the sort of the way that we work towards our purpose. So how we prioritize and identify the kind of critical factors and challenges that are, that are going to get us there towards that, that sort of purpose that we talked about a couple of episodes back.

But I think it's really worth double-ilining the fact that strategy is not just a plan. One of ways I really like, a description I really like, should I say, of strategy is that strategy is an exercise in working out what you don't do. And I think that's really telling because...

Strategy is really kind of typified, I think, by being a set of kind of interconnected choices, but ultimately, it's all about how we make the right choices that are going to define the trajectory of the organization towards our kind of long term vision, our kind of overarching purpose. And there's obviously loads in it, you know, where it's about kind of understanding the dynamics of the market, the competitive positioning, the internal capabilities that you've got the kind of, you know, the

the objectives that we've got that are going to kind of make us follow a unique path towards value for our customers. And strategy really is an exercise, as say, in kind of deliberate decision making and kind of recognizing that all of the choices that we make, you know, that every choice we make, I guess, eliminates another choice. And that's going to be okay, because that's ultimately how we forge a clear path. And...

You know, the book I really like, actually, I definitely, anyone who's interested in strategy, I would definitely recommend this one, which is Alex Smith's No Bullshit Strategy. Lovely little book. Yeah, super clear to the point, you know, plain English, as perhaps underlined by the title. but I think one of the concepts, one of sort of many, well, not that many, but certainly strong concepts that are in that book, is this sort of concept of unclustering.

Colin (02:59.874)

Yeah, me too.

Chris (03:19.193)

as being a kind of crucial part of the strategic process. I think that that really, certainly from his perspective, underlines the fact that strategy is, in a way, positioning that's probably overly reductive. is not, strategy is not necessarily an organisational level, at least just how we're going to get there. It's really those big bold moves of what is the world looking like in this kind of strategic context. So

so often, know, organisations in a category kind of all drift towards being similar to their competitors, you know, McDonald's and Burger King. Fundamentally, there isn't a difference between the two. But

you know, in our world in B2B, it happened so, much. I think particularly in the SaaS market, you you just such feature convergence, you've got kind of ICP convergence, and, they're all listening to kind of the same signals, and they all start to overlap each other. And that's problematic.

a sort of strategy level. I think going back to the what is strategy question, well, I think I really like this sort of definition of it being the way that you uncluster yourself from the competition to really create value for your target market.

Colin (04:35.982)

Do you think it's fair to say, sorry to interrupt Chris, that guess strategy kind of starts with the positioning and this unclustering piece that Alex Smith talks about. There's obviously more to it than just positioning, but I guess that's a good starting point.

Chris (04:38.903)

There you go.

Chris (04:54.091)

I think strategy starts with purpose to me. know, there's, it's the sort of, it's the, you know, that's the why, like, why are we doing this? What are we actually trying to achieve long-term? And strategy is, you know, is going to be our mechanism for getting there. So unclustering, you know, that part I think is really, really key. You know, if your purpose is to be a great airline,

that's not a very strong purpose but you know let's go with a simple example then you know there are lots of airlines out there and the airline space how are you going to be successful you know how are you going to be one that thrives rather than fails well you're going to be presenting a kind of

an irresistible value of some sort to a certain part of the market. You are not going to try and serve everybody. You're not going to try and be a private judge and a package holiday company at the same time. You're to have to pick a part of the market that you're going to excel in. And I think that's something that

that I see in our kind of B2B complex sales cycle world as being all too prevalent is trying to be too many things to too many people, having too broad a product offering, having too many ICPs that link to your product stack.

because it leads to a, you know, we sometimes talk about false multipliers on this podcast. Well, whatever the opposite of a false multiplier is, that's it. You know, it dilutes your ability to move towards anything with conviction because it chops up your resources in many different directions. It makes your messaging confusing. I think that, you know, there is a, perhaps a...

Chris (06:39.53)

sort of hand in glove relationship between purpose and the sort of strategic principle of unclustering. It's, know, who are we going to do what for by when in some ways?

Colin (06:50.754)

guess it's also about how are your customers going to find you. Like the classic example that Alex Smith uses is one of his clients, Moju, which I'm a customer of. I always drink their sort of ginger shots and turmeric shots and things like that. When Moju, this is another B2C example as they often use, but with Moju, it was originally positioned at

Chris (07:06.305)

Okay. Yeah, I remember the example.

Colin (07:16.398)

kind of as a juice, like physically on the shelf it was next to juice. Now nobody wants a tiny bottle of seven pound fresh juice, you know, a tiny bottle of fresh juice for seven pounds that kind of burns your mouth. So Moju wasn't doing so well. So it's physically positioned actually with the juices in the supermarket. But I think partly with the help of Alex Smith, repositioning as a...

essentially as a functional shot, essentially like a supplement, then actually represents really good value. And that's kind of how I found Moju and became one of these people who buys a tiny bottle of juice that burns your mouth for seven pounds. it's very well. And I think since then, the purpose of Moju has been reiterated to say, it's...

Chris (07:46.787)

Mm-hmm.

Colin (08:08.742)

the whole purpose of the company is to support people's daily nutrition and vitality. So effectively it is a supplement in the form of a juice, is obviously to a lot of people is probably a preferable way to have your simple. So they've kind of changed what the supplement market is at the same time. mean, it could also be a fresh juice rather than a capsule.

Chris (08:13.229)

and

Chris (08:29.837)

Yeah, absolutely. And I think there was there was another example wasn't there in in the book. It's such a nice book, isn't it? Because you so rarely you can kind of recall all this stuff to mind. But I think it was about one of the kind of low cost carriers in the US. Airlines Yeah, so they

Colin (08:46.688)

Southwest Airlines, yeah.

Chris (08:51.833)

they had been a sort of me too airline. I think there's a great stand there, which I don't know if I'm sure it probably is true that every major carrier in the US went bust in the nineties because they were all trying to fundamentally do the same thing to the same people. And Southwest kind of broke out of this by saying, one of the big, you know.

We talked about strategy being about the choices that you, you know, what you don't do. And they decided they were going to get rid of their entire business class cabin. They were going to get rid of their lounges. They were going to get rid of that entire seemingly attractive, high profit margin part of their business and actually just double down on being a low cost carrier, on being cheap and cheerful for our kind of European listeners, know, kind of going down perhaps the sort of easy jet route of

Colin (09:12.844)

what you don't do.

Chris (09:37.901)

you know, everything's extra, you know, cost attractive kind of pricing. And really doing that for the US market, which no one else was doing that. And then we became really, really successful doing that by selling stuff cheap and not having that kind of high margin business class customers. And obviously, in retrospect, it sounds so obvious, doesn't it? But you can imagine that in the Southwest Airlines boardroom, when they made that decision, you know, we're a struggling airline, let's get rid of our highest profit margin product. You know, that would have been a conversation, wouldn't it?

Colin (10:08.96)

Yeah, indeed. Yeah, the Southwest Airlines story is kind of a perfect example of strategy being about deciding what not to do. I guess as we go into the definition of strategy, we've kind of gone into that, not exactly trap, but that way of kind of explaining strategy at a sort of a very high level, think it's fair to say that strategy is something that's going on.

at multiple levels though, right? Whether it's company wide or within a specific department or function or even a team or within an individual in a specific seat within an organization. Could you give us like a sort of systems view on that?

Chris (10:52.28)

Yeah, absolutely. mean,

A word I'll use, I think we used it in the purpose episode, you know, we've used it a few times for his fractal, you know, strategy is a fractal or is fractal. You know, it happens at many levels. Like you say, it can be the big unclustering, you know, we're going to be a low cost airline strategy. But it also has to come to life effectively at a departmental level at a team level, and sometimes even at an individual level. And, and that

really is then recognizing strategy as part of the structure. And that's a really, really key point of our growth team operating system is that, you know, yet again, here's the here's the bingo word, you know, it has to be aligned. And you need to kind of take this fractal view of strategy across every layer of the organization, and ensure that the sort of strategic intent of the top stuff is permeating through every level. And

That's really quite difficult. Now, we've talked about purpose being fractal. You know, we talk about goals, we will certainly talk about goals being fractal and we have done before in the podcast. Considering strategy to be fractal and being measured by those goals, you know, that that's really the key thing, because you have to accept that

The strategic decision making will be decentralized to some degree, particularly in a larger organization, you have to give teams autonomy to kind of execute within a broader strategic framework.

Chris (12:28.213)

And that means that you really need to have strong feedback loops in all levels of the organization. again, that's a very much a kind of systems thinking characteristic of systems characteristic of kind of considering this perspective of feedback as being part of the system and, you know, and sort of strategy being part of the structure, because we know that, you know, we've talked a lot about kind of the concept of emergence in systems before right the way back to kind of episode one, I guess.

And that kind of emergence of value, that emergence of efficiency, that emergence of performance from the system really comes from the structure. And strategy is a structural component. It is an element within the system. It's an element within the operating system. And the means by which we integrate it and view it as a fractal is really key to optimizing system performance.

alignment is as always the key. And, you I guess you could use an example of this, kind of like when when the kind of fractal strategy goes wrong, because in complex systems, you know, as I say, we have to have that decentralization of decision making. And you can fall into the the sort of misalignment trap quite easily. You know, something that might be part of your

strategic makeup or certainly your positioning is perhaps something like client centricity. And when you sort of apply the fractal lens to the concept of client centricity, you realize that it can mean lots of different things to different people that might not all actually ladder up to your kind of organizational purpose. So, you know,

maybe if you were a software company, then write down a micro kind of, know, dev team level, they might interpret client centricity as having an agile dev cycle and, you know, inviting constant customer feedback into the process. You know, at a sort of, you know, mid level, perhaps one of your, I don't know, regional offices, you know, you're a US company or London office or whatever might consider that, you know, they want to

Chris (14:47.349)

it sort of consider that the client centricity means something like

structuring your kind of account based marketing relationships around co developing solutions with clients or, you being about trust and, actually what we might have meant up at the macro level is that, you know, client centricity is actually a brand promise that's going to be all about our kind of, you our narrative. And it's actually going to be a messaging thing. It's just actually, all we really meant was we're going to kind of talk about how we address clients through all of our marketing.

But it's been interpreted in a way that impacts the dev team. It's been interpreted in a way that impacts our go-to-market strategy for our enterprise clients. And it's all been interpreted in a slightly different way. So that alignment of strategy is really, really key. We need to be really clear about what we mean and what that should mean from a fractal perspective through every level or every kind of component in the org.

Colin (15:44.653)

Yeah, OK, so we're going to get an idea then of how and why it can go wrong. I guess it'd be useful to kind of define what good looks like, like what the essence of good strategy as we would have it is.

Chris (16:01.337)

Well, that's a big question, isn't it? And while I'm not sure I necessarily feel that well, that well-qualified can answer what the pure essence of good strategy is. Just roll that one out, please, Chris.

Colin (16:07.168)

on this spot here.

Colin (16:11.628)

Yeah, I'm not expecting close bits here, but they just...

Chris (16:16.153)

I think that, you know, connection to purpose is really, really key. That sort of co-development almost of kind of purpose and strategy than being actually totally interconnected, you know, elements of the organization. And, you know, if you've got a really compelling vision of the future,

then that is going to be far more effective at a strategic level than a revenue target or something dull like that, dull but worthy. If you've got a purpose of your organization is to change the world, then connecting strategy to purpose is going to be fairly easy. So I think the good strategy starts with strong purpose, with really, really key purpose that isn't just about making money.

because it then enables us to put in place some really strong strategic guardrails that really, as we talked about on the first episode about purpose, you create a deep structuring principle within the organization which drives self-organization. And it makes that sort of autonomous decision-making better. gets you away from that example I just gave about kind of client-centricity and fractals.

gives you the ability to strongly connect in the mind of your employees, if your team members, if your management team, you know, what good looks like. I was doing a little bit of research actually, in terms of some sort of like when strategy goes wrong. And one that came up, I think actually speaks to this is, is, you know, what happened to WeWork? And, you know, how they

Colin (18:06.468)

yeah.

Chris (18:10.571)

you know, position themselves to their investors, think predominantly as kind of being their strategy was all about tech, you know, it was about revolutionizing the kind of route, the method of consumption, I guess, within the kind of, you know, work, you know, office rental market, if you want to be, you know, perhaps less exciting sounding, they probably wrote in their pitch deck, but, but ultimately, you know,

They were an office rental business. You could rent some office for a little while or for a lot from them and they had buildings. But actually their whole value that they were creating for customers was being tech driven. It was about the method of consumption. But actually the strategy that the business

really employed, you that was their sort of visible strategy, but it wasn't the strategy they lived, it wasn't the strategy that came to life that purpose. Because actually, what they did was just borrowed shed loads of money and just massively overreached on expansion. So they actually took a really, really traditional expansion route in the kind of property market just

have loads more property, borrow as much money as humanly possible, and just spread that out. And it really wasn't aligned to their core purpose, their kind of their core value that they were, that created that point of differentiation in the first place. And of course, we all know what happened. Well, the valuation collapsed, the whole business fundamentally collapsed. And, you know,

What was interesting, I guess, about that is if they probably hadn't had that really strong purpose in the first place, they hadn't built that strong brand around the kind of method of consumption, they probably wouldn't be a WeWork right now. So whilst that particular CEO didn't get it, actually the purity of that kind of purpose.

Chris (19:59.531)

shone through and pretty much saved the business, I would think it made it worth saving. So I think that that kind of connection to purpose is certainly part of the essence of good strategy, just making sure that you follow it. And I think I think probably the other one to just, you know, rip off Alex Smith wholesale, because why not? It's, it's what you don't do that matters. It's the choices you don't make, you know, it's the kind of bold trade offs. It's the sort of

the things that you do that enable you to uncluster by letting go of some stuff to allow you to drift away from the competition and hopefully into a space where there's real value. There's a podcast I really like called, what's it called, Outwork with the Ready? And I don't think this is a them thing, but.

but they talk about this framework or where I first heard about it at least was this sort of concept of even over statements. If I don't know, it be an Apple thing, isn't everything an Apple thing? But it's about articulating choices explicitly as we prioritize long-term brand equity over short-term revenue. So that

that sort of concept of the even over statement is, you you know, we prioritise this even over this because what that does is something that most strategy and I'm sure we'll come on to this doesn't do within organisations, as it gives permission to let go of something, you know, strategy is almost unconsciously always additive.

because people are so afraid, I think, of letting go of things that create revenue in the short term or create revenue now. And I think that the even overstatement gives you that sort of permission at a higher level to stop doing stuff. And I think that, know, certainly I reflect the experience that we have out in the world with our customers, you know, what you don't do.

Chris (22:02.465)

almost fractally, through lots of levels of organization is the key to success because it frees up the space to do the things that do create success. So I would say that, you know, connection to purpose and what you don't do is probably right up there in terms of the essence of good strategy.

I think the other thing probably that comes to mind is just around coming back to that concept of strategy as positioning is sort of category dynamics. The category that you exist within has particular characteristics, it has expectations, has perception, good or bad, and

what you've got to do, I think, to be effective in strategy, going back to kind of the unclustering point is to understand the dynamics of the category to enable you to understand how you can move around within it and actually to also, I think, understand when you need to move out of it. And I think this is something that, you know, we've talked about a lot in our own organization over the last kind of year or so is, you know,

You can't, you can be a category shaper. You can make up a category. They used to say that that's what VC firms look like. The businesses that have the greatest chance of making a huge multiple are the ones that create a category. And that is invariably true. The iPod, the smartphone, the, I'm sure electric car maybe. That's been around since about 1907, but whatever.

Yeah, these are the sort of things that we that we kind of see. Dollar Shave Club, think it's one that always gets mentioned, isn't it? You know, no one knew they really needed to get their razor in the post. But here we go. That's a you know, that's coming on to be a unicorn, isn't it? So it, you know, yes, you can shape a category. But I think unless you've got

Chris (24:10.785)

you know, why Combinator behind you and untold, you know, hundreds of millions from a bunch of plucky American investors. Can you create a category? don't know. You would have to have something with such incredible product integrity that, that, you know, it couldn't help but be created. And I think that's a tough ask for most organizations. But what you can do is work out when your current category doesn't fit. And I think that comes back to your point on juice, you know, we understand the category dynamics are

Colin (24:36.194)

more juice though do you?

Chris (24:39.001)

actually that needs to be on offer and it needs to be smooth or it needs to have bits in or it needs to have multiple fruits and the value is defined by the number of milliliters in the bottle and then suddenly you come in with something that doesn't conform to the fundamentals of the category, then you're going to have a problem. actually you either need to accept the category dynamics or you need to get into a new category. And I think that's a big part of that unclustering and knowing what

not to follow. There we go. I gave it a go.

Colin (25:12.046)

Yeah, not a bad attempt at defining what good looks like. Obviously, out in the real world, we see strategies, let's say, maybe fall short of that definition of what good looks like. I think what's probably interesting for the episode here is just understanding a little bit about...

why strategies fail, I guess as a general point rather than going into a bunch of stories about specific strategies that failed. Although examples would be great too.

Chris (25:47.577)

Yeah.

Chris (25:51.607)

Well, I think in some ways it's quite lot easier because we observe this perhaps more readily than why they succeed. I think a big one is confusing planning with strategy. Lots of organizations think a strategy is what they already intended to do put into a timeline. And I think that

Yeah, that seems and there may be cries from the back of, I don't know it isn't, but I think if you really examine what most organizations call their strategy for the year, there aren't a lot of big strategic choices in it. There isn't a lot of unclustering. There isn't a lot of what we're not going to do. It is just either, you know, it's what we did last year in a timeline plus 10%. And that is a big problem.

I think, and that's why most organizations in my humble opinion don't get where they want to go is because they haven't worked out what they're not going to do to get them there. I think another thing which I sadly have observed all too many times is that strategy is kind of in many ways seen as a sort of becomes a static artifact.

So either they are things that get done once a year in a big show and everyone goes to an offsite and, you know, labors hundreds of hours over a PowerPoint presentation, which then gets, you know, signed off by the board and presented in all hands and then put in a drawer and never looked at again. You know, I think that that so often it's a big once a year, you know, set piece that doesn't evolve through the year that doesn't kind of.

get optimized, it doesn't respond and sense to the kind of signals in the market that happen after the point it's created. And therefore, it kind of leads to a situation where, you know, the team's invested so heavily in producing the artifact that the PowerPoint or collection of PowerPoints and budgets and whatever, that it becomes sacrosanct, it can't be changed, it took too much time and of course, then it becomes irrelevant. And

Chris (28:09.655)

I think that's a really, you know, that's a really common thing. And we've talked about it, I think, before in an episode earlier this year about the budget cycle.

Its strategy starts in November, budgets get submitted, they get argued about, they get signed off, they kick in in Europe, at least on the 1st of April. And then that's it, and the goals got set for the year and woe betide you if you don't hit the goal that someone thought was a good idea last November by the end of following two years following the end of March.

it's just a bit silly, it but it's a unfortunate operational reality. So I think that sort of static artifact point is a big thing. But for me, the big one, the the the the big, you know, 500 pound gorilla of strategy failure is a lack of integration with any kind of operating system. And of course, there's a degree of bias because we are talking about operating systems in this series. But there's a reason we're talking about operating systems in this series. And

So much of strategy gets developed in a vacuum from execution. So I talked about a lot of strategy being additive. Strategy becomes a document that has stuff that people will do in, and that stuff is always more. And it's always happened in a retreat somewhere where actually the people that are responsible for doing the doing actually aren't at the table.

And this sort of beautiful, well-meaning, well-articulated plan is never actually, was never actually possible to deliver because nobody gave people permission to stop doing something else. You know, they didn't.

Chris (30:03.349)

allocate the capability and the resources and they didn't change the operism to enable that execution to work differently from what was already happening. I think such a critical component of successful strategy is ensuring that the delivery capability is built into the strategic process. Because otherwise strategy just becomes a theoretical exercise. It becomes a exercise in stating what you would like to happen, not what can happen.

And I think that's something that is again, endemic in the process of strategy creation is that it's a theoretical exercise, which is then set in stone and was never actually possible. And then everyone spends the whole year scrabbling to try and, you know, do more to get somewhere near this thing that was set in the ends in failure. And that is...

It seems such an obvious thing not to do, it does seem to be a significant trend that we see out there. And it goes back to that what not to do. People don't decide, don't really give their team permission to not do something. So it all becomes additive and therefore it becomes somewhat artificial in its ability to be delivered.

Colin (31:23.246)

And then guess individuals are left with making tactical choices about where they apply the principles laid down in the strategy and where they don't because they simply because they have to essentially they've not been given permission to to cut other things out and they don't have any more hours in the day. And then that starts to kind of cause some atrophy of the strategic integrity, doesn't it? I guess this is why.

I say, guess, I kind of know this is why this point about lack of integration with the operating system being this of downfall of many a strategy. This is why the growth team operating system is in this kind of matrix like structure with all the dimensions of relate to each other because and we'll go into this later in the series, things like operations and resources are kind of baked into the operating system. So.

running growth team operating system, would be doing it properly, would be sort of impossible to miss that, I guess.

Chris (32:30.583)

Yes, indeed. And I think that that is just having that mechanism for alignment. That's the key thing. Good strategy is aligned to all of the dimensions in the operating system. And we could probably leave it there because that's kind of a key point. Let's not, but that is it.

Colin (32:52.727)

Yay yay

Exactly. And I guess if we do it the right way, we've created the... because you need to create conditions for being adaptable and agile and to actually be able to, I guess, cope with the reality that no plan survives contact with the enemy, right? So there needs to be some flexibility baked into the strategy as well. I suppose fundamentally, a static document can't do that.

Chris (33:24.631)

Yes, indeed. And yeah, I think those kind of principles really link again so much back to the, you know, to the operating system, to the kind of operational rhythm of the organization, because, you know, strategy cannot just be a document. It has to be a process. And that is so often missed. You know, you have to be able to revisit it and refine it continuously.

And that's not just annually, you know, think that's on a much more kind of frequent cycle. Because that way you're hearing the signals, you're hearing the feedback, you're kind of baking the execution into the strategy. And you also get that kind of speed of learning. You know, we've talked about kind of the learning organisation a little bit before on previous podcasts, but ultimately the more feedback you have baked into the system or the more or at least feedback loops you are listening to, perhaps more accurately.

the quicker you can optimize, the quicker ultimately you're going to succeed. So that speed of learning is really key. And ultimately, not creating something which is too fragile. If you create this rigid top-down...

prescriptive strategy and inverted commas, then A, what you've probably created is a plan, but also you haven't kind of left any room for controlled experiments. You haven't left room for innovation. haven't left room for the sort of...

breakthrough that comes from having learned something during the process. And that comes down to having a perspective of building in strategic guardrails rather than a micromanagement framework. actually the way that you bake in the ability to do that.

Chris (35:21.293)

I think it's a theme, I guess, we've talked about a couple of times without actually naming it, which is maybe about permission, know, permission to not do stuff, permission to innovate. You know, I think that it's another almost structuring principle is, you know, what you give people the authority to do. And we'll talk about authority on another episode as that's another dimension.

Colin (35:48.204)

Yeah, I know we're also going to have an episode where we go into talking about measurables. It might be interesting to say something here about how structure, sorry, structure. I think I did that in the last episode as well, said structure when I meant strategy right at the end, wasn't it? How strategy relates to measure, because ultimately it's all very well sort of nailing the strategy part, but how are we going to measure how close to that,

Chris (36:04.377)

you

Colin (36:18.094)

Too good we got.

Chris (36:18.521)

It's such a good question. mean, fundamentally, it deserves an episode in its own right, and it's going to get one. I guess very briefly, I'd maybe go back to our old mate, Goodhart, and his law. And I think you need to recognise that if you create a measure that becomes a target,

you haven't really got a very good measure of how the system is performing because people will gain the system to achieve the target. So the sort of concept of observed and unobserved metrics is quite a good one to bear in mind. You need to have...

framework of measurement, need to metrics. I'm not suggesting that you don't, but you also need to recognise that as soon as you set a metric, you know, people will do everything in their power to hit that metric, and that sounds like a good thing. And sometimes it is, but you need to also think about the broader impact of setting that metric.

into the sort of behavior of the organization. So I think it's kind of happening that systems thinking view of metrics that if something's become a metric, it's become a target by default, you know, people will orientate their activity towards it. And you need to make sure that that doesn't move the structure of your system away from that being impactful. So also thinking about kind of unobserved metrics. And, you know, maybe they're not just the things that are on your scorecard.

Colin (37:57.74)

Yeah, no, fair enough. To be honest, we should probably leave measurables there as we are going to quite deeply into that later in this series. I guess we've talked a lot about strategy in terms of a high level and as a big picture. But I guess there's some more, I'm not going to use this word again, structure to that as it and what I mean by that is

while we are looking at how do we fulfill our purpose as an organization and that might be like a 10 or 20 or a five year picture. But I guess there's more to strategy in that because we're thinking about kind of stops on or points on the route to getting there, sort of midterm aims and what we're going to do in the next three months, say.

Chris (38:47.501)

and

I'm really sorry Colin, but could we stop there? I need to just head out for a second. I'll be back in like one minute and then can we restart this section?

Colin (38:59.682)

Yeah, no worries.

Chris (40:20.697)

Sorry about that.

Colin (40:24.322)

No worries, just be an amusing little break for Dominique to edit for us. Thanks, Dominique.

Chris (40:24.456)

Chris (40:29.017)

Yes, thank you. Should we start on talking about the lead-in to planning versus execution?

Colin (40:38.394)

Yeah, okay. I will just, I'll just kind of three, two, one it and go in from there.

Colin (40:51.766)

So we've talked a lot about strategy, guess, in terms of the big picture long term, like how the organization is going to fulfill its purpose. And sometimes that can be a 20 year or a 10 year or five year picture. But guess there's more to strategy than that. We're not just talking about how we do that in the long term. We've also got to look at the

the one year picture or how we're going to do that over the next three months. This is where we start to cross over with things like planning.

Chris (41:31.545)

Yeah, indeed. think that, you know, maybe planning is, planning is really important, but actually kind of maybe it comes back a little bit to the point about measurement that really what we've got to do is create a kind of operational structure for kind of strategic delivery for execution. And, you know, it's something that

I think we're pretty good at in our, in our organization and maybe I can just reflect on perhaps on what we do a little bit. Because I think that it is about the long term starts now. And therefore, to get to our long term vision, we've got to understand what the immediate

sort of tasks are what the immediate goals are. And I think that the sort of 90 day planning cycle is one that I'm a big fan of. Because it enables us to keep short term targets, which mean that we can keep moving forward, but also build in kind of reflection and recalibration points.

I know that sounds like a funny thing, perhaps, we talk about purpose being stressed, something more sacrosanct and being our big long-term vision of the future. actually, having a 90-day planning cycle where you actually build in reflection time means that you give space to the weak signals.

you you can, give space for the feedback loops that you've baked into your delivery to surface because the world changes. You know, a lot of our, you know, a lot of our time is spent in the tech world. And whilst it's perhaps almost a, you know, a bit of a, I don't know, a joke.

Chris (43:32.953)

to say that tech changes constantly, it probably doesn't change as constantly as everyone thinks it does. But markets are dynamic, things change. What was possible last year, what wasn't possible last year might become possible this year, I think in the world of AI, that's increasingly true. So just staying on top of it and giving room for it to change, I think that comes back to kind of taking out the fragility. So I like a 90 day cycle, but equally having midterm aims,

out to the one to three years, you know, we have a one year aim and we have a three year aim and we change the three year aim every one year, you know, we keep pushing it out and it gives you keeps giving that ability of a kind of strategic recalibration. I think that's really, really important and long term vision. think lots of people talk about long term vision.

and argue about what long term should be. I hear a lot of people say that the 10 year vision is pointless. It's not kind of, the market, the world changes so much at the moment, they're having a 10 year vision is stupid. I don't tend to agree to be honest, but I do think there is a link to kind of organizational maturity. Like if you're a startup,

I'd argue that having a 10-year vision might be a bit much, but equally it depends on the org itself. If you've started your startup and your goal is to cure a particular kind of cancer, then actually maybe you are working to a 10-year plan. If you've just started a consultancy company, I would argue that probably having anything more than three years is a bit pointless.

But you do need to have a kind of long-term vision because that's your North Star. That creates the guardrail that keeps you moving in the right direction. Because if you bring things in too short term, then you start lacking strategic integrity. You start bouncing around. You start investing in consumer cameras when you're an enterprise networking company, as we've used that example a few times. So it's striking the right balance in terms of the strategic time horizons. And I think that

Chris (45:47.553)

another part of that kind of execution plan is really having that sort of prioritization framework. Maybe leveraging those even overstatements that I mentioned. I think when you've got that 90 day into one year, so you've got four 90 day planning cycles in one year and you get to your one year goal, having the three year goal and maybe having the longer term five, 10 year goal.

That really gives you a good sort of execution framework to then start anchoring things into. But baking in the prioritization framework so we're also then constantly re-evaluating what we're not going to do. I think that's a really healthy way to kind of start building out a stack. But equally, I think that we could do a whole episode on that. And perhaps it's not part of this series, but I think maybe we should sort of put that one on the whiteboard for the future.

Colin (46:43.276)

Yeah, it's something I was just thinking about as you were talking there as well. We're kind of getting in now as we think about operationalizing strategy towards the end of the episode, I guess. And obviously we will have one about operations, but we also have one of the dimensions is collaboration. And I wonder if that, I don't know how much we'll go into this, but thinking about that rhythm of collaboration. And I don't just mean in terms of like having meetings.

or just having a conversation with each other. you touched on the rhythm of how we do strategy reviews and how often, like in our case, we do this essentially quarterly and we get together and we assess the progress and identify new challenges. And quite often, well, maybe not quite often, but there are times we've quite radically recalibrated our priorities in there.

Chris (47:35.745)

Yeah.

Colin (47:37.658)

And something that I've found since we've been in that rhythm internally is that 90 days or that sort of, know, quarterly rhythm is really quite effective. Because I think that's roughly about how long it takes for, you know, old habits to creep back in or some sense of kind of strategic drift just to begin, you know, maybe one degree divergent from

from where you started. I think quarterly is a good kind of rhythm to go in there. Although I think maybe if you only talked about it quarterly, then the strategic drift would be more significant over that period,

Chris (48:20.761)

Yeah, I think so. I kind of like the idea of this sort of quarterly check ins as being considered about loops. This is a phrase you hear quite a lot in the walk design world. And I think it sort of recognizes that strategy is an ongoing conversation between all of the stakeholders. And if you see it as a loop, you see it as someone, thing that you're going to

you're gonna do a 90 day cycle, you're gonna go through the loop, you're then gonna evaluate at the end and you're gonna do another loop. It creates this kind of ability to, gives the, back to that word permission, again, it gives you permission to recalibrate, it's baked into the structure, it is not a failure to recalibrate, is actually a, it is a positive because it means that you're listening.

know that you're having that conversation, you're optimizing and it's kind of reframing. I think that's a big thing that a lot of companies kind of that contributes to kind of strategic fragility within organizations is that they see that strategic change within the year as being a failure. And of course, it just isn't, you know, if you have a

well-structured operating rhythm that has review baked into it, then really what you're doing is optimizing. It is smart to change. It's very unlikely that, particularly when we're thinking in a fractal way about strategy, it would be very unusual for nothing to have changed in the sort of...

I don't know, whatever it is, probably 15, 16 months, that is the kind of strategic cycle from initiation of planning to the end of the financial year. It would be weird, right? If nothing changed, but most organizations, I think, see it as a failure. And by kind of instilling that thought of the quarterly loop of the strategic ongoing conversation.

Chris (50:25.426)

I think you can really reframe what's actually going on within the org, and I think that's really important.

Colin (50:32.972)

Yeah, super interesting part of the topic as well. think just I'm going to spin us on to, guess, one last area I'd like to cover as we're probably going to run over time a bit. I guess pinning your hopes on a particular strategy is essentially making a bet, but it's a bet where there's quite a lot that you can control, essentially. And one area that we haven't really gone into is how do you

I guess, test your strategy other than just going out there and doing it. How do you kind of model what's likely to happen, I guess?

Chris (51:11.17)

Chris (51:17.041)

That's a really, a really great question. So I have two answers to this. One has my systems thinking hat well and truly on and on the other is perhaps more of a management role. So maybe let's start with the, you know, more of the kind of accessible version of answering that question, which is exercises like red teaming. I think that that is a really

Colin (51:37.262)

Thanks

Chris (51:46.837)

It's quite a fun thing to do, actually. I know we've done it on our, on one of our planning sessions fairly recently. And that is almost doing a sort of a structured exercise, which allows you to sort of stress test assumptions and kind of identify the potential blind spots in your strategy by doing almost like a role play exercise. And it, it's kind of a

guess it's an adversarial approach to strategic testing where you get your team to play a role of a competitor or a skeptical investor or a market disruptor, if there is such a thing, to go in and say, well, company A has got this strategy and we're company B. What are we going to do about that? What's our strategy going to be to react to that?

It's I think it I mean you probably know this better than me Colin. think I think red teaming is something to do with military

Colin (52:49.292)

a military thing. Yes, for example, if you look at the US Air Force or the US Navy Air Force do this as well, I think their red team exercises will involve US pilots literally flying Russian made MiG fighters using Russian tactics as well as they can, which they know pretty well as you can imagine.

exercises so they literally like they play the part of the baddies as they would have it essentially but you actually use the equipment and tactics of the other teams I think which is quite a kind of literal obvious way of interpreting this which is a little bit different to the b2b world where we're it's maybe not quite so such a case of taking your life in your hands perhaps a little easier to do than procuring some migs on the on the open market as well

Chris (53:37.859)

Yes.

Chris (53:42.041)

I think probably cheaper too. But it can be quite a fun exercise because it allows you to see a strategy from the opposite way. How are going to break it, not how are we going to deliver it? So I think that's quite a good way of doing it. I guess another way of doing that, or maybe the link to that is in the systems. And what's system dynamics? Well, we have this concept of system modeling and scenario planning.

It is maybe something we should talk about. don't know whether it'd be very interesting episode to anyone but me. you can build a, in fact, there's a guy out there called Kim Warren.

does some fairly interesting podcasts. He talks a lot in the System Dynamics Society, of which I'm a member. And he talks about this concept of having a digital twin of your organisation. I he calls it that. I might be having that wrong. Sorry, Kim, if you're listening and that's not what it's called.

Colin (54:40.686)

I like the idea that Kim Warren's listening to her show.

Chris (54:43.393)

Well, he should be, he? But I think that this idea of you can build a sort of causal loop diagram of your organization and kind of document all the feedback loops that should be in there and start running different scenarios. What happens if you suddenly sell twice as much as you did? What happens downstream? Does delivery fall over?

Do you keep ramping up your marketing budget? You can start building different scenarios and actually build a digital version of your org in a systems modeling tool and really start then testing lots of assumptions and building lots of scenarios. And that is a way you can do it. But to be in all honesty, it's probably a bit.

a bit over engineered and a bit difficult to implement for most organizations. But having that concept of scenario planning in your mind, you know, the sort of what if thought exercise, you know, what if this happened, what would happen? And building some scenarios that maybe aren't built into a sort of statistical model, but certainly are built into an exercise that maybe bridges the gap to red teaming is something that I'd certainly advocate for.

Colin (56:06.253)

Some pretty cool concepts in there as the answer to that question. Chris, think strategy is a huge discussion that kind of touches on so many areas. And that's probably why this episode is a little bit longer than some of the others that we've had. We should probably sort of move towards the finish line here. Just wondering if you any sort of key

takeaways if we could zoom back out a bit just on the subject of strategy within this context.

Chris (56:42.667)

Yeah, mean, trade-offs, I think is probably my key takeaway. Strategy, as we said a few times in the episode, is about what you're not going to do. It's about giving your team permission to not do things. Because if you're going to move in a particular direction, and ideally a particular direction that is away from your competition, you're going to have to give some stuff up.

you're going to have to strategically do something which is different and not just additive. You can't just do more of everything all the time. You have to stop doing some things. I think that allows you to uncouple and cluster and move away from the competition. you know...

You also have to give your team permission to not do the stuff. If you're to do something new, you have to tell them to not do something they're already doing. And that happens so infrequently in organizations. So, you know, the trade-offs, the what not to do, I think is the key to success.

Colin (57:46.028)

Yeah, I think when you're talking about that trade-offs, it's also, I guess strategy is kind of where ideals meet the harsh reality of capabilities and execution, There's that sort of tension between what's actually possible to do right now, operationally, and how you would like to do things. a strategy kind of emerges from there, If that's not too reductive a way of putting it.

Chris (58:10.113)

Yeah.

Yeah, absolutely. So I think if you can work out what not to do, you're doing well and you can give your team permission to go do that by also not doing some stuff they were already doing. I think that two other things come to mind, which is the connection to purpose. I think that's really, really key. If you've got a strong purpose, you probably can have strong strategy.

if you don't have a clearly defined purpose in organization, again, going back to episode one or dimension one, episode two in this series, then you need to go get one. And that's not about your CSR strategy. That's about that sort of vision of the future, that future state that you're working towards. And I think that kind of links to the third thing in my sort of takeaways, which is sort of feedback, learning, you know, the...

The more you can kind of create the guardrails and listen to the signals from the market and from the team, the faster you can learn, the faster you can optimize. So it's kind of leaving that space in there for innovation, that sort of space for optimization, the kind of the framework for listening to feedback to drive those things and to kind of propel you through towards that purpose and to get towards that purpose by deciding what you're not going to do. There we go. You know, that's in a nutshell, that's my takeaways.

Colin (59:33.71)

Not bad, not bad. like it, Chris. Put you on the spot there as well. Yeah, great. Well, listen, I think we are probably well and truly at the end of the episode now, Chris. I think we've run to an hour this time. For the audience, please don't forget to read and follow the podcast. As we always say, it really helps us to bring this content to a wider audience. And we'd really appreciate a moment of your time to tell us what you think.

both generally speaking and specifically, I'm curious to get some feedback on this particular episode and maybe to get the audience to do a bit of thinking about their own situations, like what are they currently doing that they should stop doing? Or what is the strategy process within your organization? Is it an annual event or is it an ongoing sort of constantly adapting process? And I guess something,

to think about for the listeners as well is how they can sort of create this space. This is back to one of your last points that you made there about creating that space for innovation within their strategic framework. I think when there's a tendency to look at strategy as a of twin of planning, then we start to get into rigid strategy and we start to lose that space for innovation, which is obviously kind of detrimental to the functioning of this system.

We're all in love to hear from anyone who's brave enough to put their head above the parapet and give me their thoughts on that. We'll be back next week, of course, but all I've got time left to do, in fact, probably don't even have time for that, is to say the growth system is brought to you by RevSpace. That's us, we're a growth systems consultancy. We connect B2B organizations with the future of growth. We offer consultancy, education.

even applied delivery services. As I say, that's all we've got time for this week. See you next week. Thanks. Bye bye.

Chris (01:01:40.291)

Thanks for listening.