Strategy for software Dummies – part 1
The title for this series of posts is inspired by the extensive series of instructional/reference books, which serve as non-intimidating guides for readers new to the various topics covered, or for readers who needs a solid brush up. The title doesn’t imply that software CEO’s are Dummies; only that there is a need for a new type of “strategy framework” that produces more than words and which can be completed in a very short time.
The series of posts is also inspired by a recent article [McKinsey Quarterly, (2011, 1): pp. 30-39.] by Professor Richard P. Rumelt (UCLA) with the title “The perils of bad strategy”. If you haven’t read it, you must. It is only nine pages, but there is so much wisdom in those few pages.
Strategy? – oh no, not again!
We work exclusively with Independent Software Vendors who have global ambitions. One of the first questions we ask a software CEO is obviously: “What is your strategy?” Looking tired in the eyes we get all sorts of answers. Only rarely do we get an answer where we can respond: “Wow, you certainly got it sorted out.”
The majority of software CEO’s do not want to discuss strategy. They want to win customers, grow revenue and make a profit. The dilemma is that without a clear strategy you cannot grow beyond your local neighborhood. (see Do we really need a strategy?) Well, don’t we all tire when we hear consultants suggest that you need to revisit our strategy? However, when you talk to the members of your management team, key staff members and your customers you get a picture of a group of intelligent and dedicated people pulling and pushing in all directions.
The perils of bad strategy
According to Richard P. Rumelt there is an awful lot of bad strategy out there. Since the introduction of the standard strategic template framework of “Vision – Mission – Values – Objectives – Strategy” most companies have had a go at filling in the forms and printing some nice posters for the offices. However most of the so-called strategies are just fluff – empty words.
“Strategy involves focus and, therefore, choice. And choice means setting aside some goals in favor of others. When this hard work is not done, weak strategy is the result. Scan through template-style planning documents and you will find pious statements of the obvious presented as if they were decisive insights.”
With the Internet you have instant access to Strategy Templates, Mission Statements and Vision Statements from numerous other companies. Thus 100-people companies get inspired by SAP, Oracle, Microsoft and Apple.
Most Independent Software vendors are small companies. The majority are employing between 50 and 1.000 people. Spending time and money figuring out what and where you are going to be in 25 years makes no sense. The ambition of ruling the world is great and needed, but getting some muscle over the next 3-5 years is what really matters. Growing faster than the competitors, maintaining positive cash-flow and steadily increasing your ability to invest more and more are the financial objectives you must achieve.
How do you do that?
It only takes two weeks
There is a way to define a strategy framework within two calendar weeks and with a minimum of effort. This framework will leave your management team completely aligned and you will have a much clearer picture of where you currently are, where you’re heading, why and what it will take to get there.
Too good to be true?
Well, read this series of blog posts and judge for yourself. It is a 80/20 concept. The concept will take you 80% of the way to a clear and concise strategy framework in just 20% of the time a traditional strategy process will require. What you need the last 20% for is for you to decide, but I can [slider title=”assure”] I cannot guarantee that your list of things to do after the two weeks will not be long and tough. If you realize that you are not where you thought you were, that you are not heading in the direction you though you were heading and that your team doesn’t have what it takes to get you where you must go – then you have a lot of work to do. However, I assume you appreciate such “information” sooner rather than later. [/slider] you that it will not consume 80% of the standard “strategy development” time.
Other posts is this series:
If you want a head start on the subject I recommend you to read “The magical 10 minutes”
Post #2: Introducing ValuePerform – a lean approach for strategy analysis and alignment
Post #3: The 6 sources for financial growth
Post #4: Why do management teams disagree?
Post #5: Getting the priorities in place
Post #6: The Customer Value Proposition
Post #7: The Customer Value Proposition TODAY
Post #8: The Customer Value Proposition in the FUTURE
Post #9: The Market Situation
Post #10: ValuePerform and the 15 Management Areas
Post #11: What is important and what is not?
Post #12: How are we performing?
Post #13: Identifying the important and the urgent issues
Post #14: The Action Plan
Post #15: Why does misalignment occur?
Post #16: The price of management misalignment
Post #17: Avoiding invisible or suppressed misalignment
Post#18: The cost/benefit ratio of ensuring alignment