A Growth Strategy Framework
There are countless organic growth (i.e., not based on acquisitions or M&A) strategy frameworks in the industry. Every advisory firm has one, every college MBA program has one, every strategy web site has one, etc. However, I have observed that most approaches are too theoretical or too complex. Most CyberSecurity startups are too fast and too busy for these legacy strategy approaches.
I have developed this framework to help CyberSecurity startups grow faster and more efficiently.
By following this simple approach, organizations can more easily structure, prioritize and deliver on their growth opportunities. It will allow the strategy team to accelerate problem identification and resolution, and also reach better decisions. This framework is flexible and balanced; generic and high-level enough to be instantiated and used in many situations, while also prescriptive and precise enough to be immediately actionable on specific problems.
This paper describes the big lines of my Growth Strategy Framework:
How to use this framework
There are six fundamental steps in this framework, as described in the diagram below. We will rapidly describe each of these steps, and we will spend a bit more time in Step 4 “Prioritize opportunities” and Step 5 “Develop the strategy”.
I cannot capture four decades of projects in a short blog. My goal is to show part of my methodology so it resonates with readers. Feel free to contact me for help, or if you have a sticky situation in your hands.
1. Frame the scope
“Why exactly are we doing this?”
Strategy initiatives always have an Executive Sponsor — usually the CEO, the Chief Strategy Officer, or a member of the Board. They were granted authority to launch this undertaking, for a particular reason. Why? Let’s use this as a starting point and guiding principle. Ask them:
- Who is the audience
- What is the goal
- What is the intention
- What is success
This will begin to scope and structure the effort. It will give indications on the required stakeholders and the composition of the strategy tiger team. Critical success factors and metrics will also emerge. Don’t overlook this step, answering these questions is critical.
2. Assemble the team
“Who absolutely needs to be part of this strategy tiger team?”
Growth is not the job of a single department or business unit. It is really the collective deliverable of all teams working together towards a common goal.
Keep this in mind as you build the strategy tiger team. You will need the set of people who can influence, help develop, own and eventually execute on the strategy. Include representatives of all the main functions that will likely be impacted by the strategy. Don’t restrict the tiger team to the organization’s management and the rockstars only — make sure to add people deeper in the organization. However, don’t overdo it, if the team is too large you will suffer from diminishing returns.
Remember the adage — If you want to go fast, go alone; if you want to go far, go together. Find the balance.
Use the strategy tiger team to pressure-test the answers defined in Step 1. In case of discrepancies, iterate between Step 1 and Step 2 until you reach alignment.
3. Identify Opportunities
There is usually no shortage of good ideas for growth opportunities from within the organization.
These ideas are born throughout the organization and brainstormed locally before becoming part of some “tribal knowledge”. The strategy tiger team needs to capture, collect and organize these ideas into categories.
At its core, growth can only be achieved in three ways — creating new opportunities, optimizing these, or expanding existing ones. In fact, there is often an iterative aspect to these three pillars.
- First, create new products and/or services to accelerate revenue growth
- Second, optimize these products/services to get more revenue faster
- Third, expand these products/services with upsell or cross sell opportunities into new pricing tiers, new buyers, or new markets. This expansion can in a way be considered as the creation of a new adjacent product/service, closing the loop.
This can be described in the following diagram.
4. Prioritize Opportunities
The identification of opportunities will always gather many ideas — too many to act on with the available resources.
Having to prioritize among many opportunities is a great problem to have. We can significantly improve the efficiency of this phase by structuring the selection process as a series of questions. Expect some answers to be easy to obtain, while others will require significant work.
The strategy team should privilege the work to be performed by members of the organization whenever possible. Answering these questions genuinely and with an open mind is critical. A good level of detail is important, however exhaustive answers are not required — in fact not desired — because of diminishing returns and the risk of “analysis paralysis”. Furthermore, the process of answering questions will not necessarily be a linear process. Answer some questions as best as possible, then continue on to other questions… even if that means coming back to those that have only a partial answer.
Often, adjacent and complementary insights will be generated while trying to answer these questions; add those in the framework and move on.
First pillar — Create
This is probably the most obvious and well-understood pillar for growth — create new product(s) or service(s), and generate a brand new revenue stream.
If the opportunities for growth are in the “Create” category, the prioritization exercise should, at a minimum, answer the fundamental questions described in the following diagram. There is much more detail behind each of these questions, but for this document I want to stay at a high level.
Second pillar — Optimize
The optimization pillar also represents a good way to accelerate revenue growth — while improving margins. In this phase, the product/service is launched and generally available (GA’ed). The customer journey is understood, and fundamental metrics on revenue and margins (e.g., cost of sales, time to revenue, close rates) are properly tracked.
It’s now time to learn what works and what doesn’t, and understand how to remove friction points.
Think outside the box — to optimize can also mean to decide to kill a suboptimal revenue stream. Is this product/service worth investing resources into? Would these resources be better spent elsewhere?
Third pillar — Expand
The expansion pillar looks at expanding current products/solutions as upsell and cross sell to the same buyer, offering higher pricing tiers or adjacent products. It also includes broader opportunities such as selling to new buyers, or selling into new markets. Some prioritization questions include:
5. Develop the strategy
The strategy team then needs to organize answers from Section 4 in a cohesive way. Patterns will naturally start forming among these answers, and a solution will emerge.
Make sure that you pay attention to the following Critical Success Factors.
Be a custodian of the strategy process
“How do you ensure that the organization agrees with your strategy”? is a question that I often get asked.
The answer is simple. It is not my strategy, by design it is the organization’s strategy. My goal is not to force my own strategy on the organization. My goal is to be a shepherd and a custodian of the strategy process. Of course, I always come prepared and with a strong point of view on what needs to happen. However my strong convictions are weakly held. This means that I’m always willing to change my opinion so as to give space for the overall organization to define and own their strategy.
Your approach must be strong but flexible. You don’t own all the answers.
Build consensus
“I don’t agree on everything, but I get why we need it and I’ll help” is an acceptable statement to hear during the strategy process.
To ensure successful delivery, a strategy needs consensus among stakeholders. Consensus doesn’t mean everybody agrees on everything all the time, because that would be impossible. Consensus is achieved when all stakeholders:
- Have had the opportunity to express their point of view
- Know that they were heard
- And understand why specific decisions were made in a certain way
Your strategy must corral as many people as possible within a common consensus. For those people who don’t agree with key decisions, you need to ensure that they “disagree and commit“.
An elegant simplicity
“Can you explain this again, I still don’t understand it” is a sign that your strategy is at risk.
A complex strategy will inevitably fail. There are too many people involved, and too many dependencies in the organizational systems to leave room for unnecessary complexities. It is up to the strategy tiger team to simplify the strategy so it can be understood, and embraced by everyone in the organization.
Keep your strategy simple. It could even appear simplistic to the smarter stakeholders, but it will ensure best chances of success across the whole organization.
SMART goals and RACI matrix
A strategy cannot just be an intellectual exercise leading to a set of pretty slides that go nowhere.
A good strategy must also be actionable, specifically mapped as a set of SMART goals. SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound.
Likewise, because the strategy needs to be executed across the whole organization, all stakeholders need to know and understand their specific roles and responsibilities. This is properly described in a RACI matrix, specifying who is Responsible, Accountable, Consulted, and Informed.
5. Execute the strategy
“Two thirds of the strategies fail because of lack of execution” is a sad statistic that I recall from my Gartner days.
This step is about execution. The strategy has been developed, goals have been properly set, and people know what they need to do. Build the steering committee as a subset of the tiger team, agree on the SMART goals, and define and track their KPIs.
Expect resistance to change, and adopt change management discipline.
Embrace change management
“That’s not how we do things here” is a sure sign that you’ll run into change management issues.
By definition, strategy execution means change. And change is the most difficult thing that we can ask anybody to undertake. Organizations and systems are even more change-adverse because of the compounding effects of all the people involved. Change is very expensive in resources and energy, and requires flexibility and neural plasticity. What seems like an easy pivot for someone can be a daunting transformation for someone else. In fact, “change management” is defined as its own discipline, at the intersection of human psychology and system behaviors. Best practices have emerged, for example special attention should be paid to expectation setting, early wins, proper communication, pursuit of low hanging fruits etc.
Your approach must adopt a “change management” mindset to facilitate successful execution across the whole organization.
Next steps
As seen in this document, strategy development is about helping the broader organization drive, own and deliver on their strategy. There needs to be maximum buy-in from all stakeholders in support of the overarching mission. All those involved need to know and understand what they are supposed to do, and commit to supporting the execution of this strategy.
If you need help, contact me.
