Although “seat-of-the-pants management” can work for a start-up for only so long, it is not a sustainable and scalable approach to growing a business. This explains why many start-up founders who are addicted to this style of management either fail to grow their company, are themselves replaced, or invite other leaders to help them grow. Although we rarely hear of those that did not make it, recall such famous examples as when Microsoft’s Bill Gates on-boarded Steve Balmer, when Apple’s Steve Jobs was ousted by his own board, or when Google’s Sergey Brin and Larry Page welcomed Eric Schmidt as Chairman.
“When?”: That being said, the sooner the founder can think about his or her growing business strategically, rather than just tactically, the better. So that’s the short answer to the question “when?” The bigger and more impactful challenge relates to the “how?”
“How?”: For many companies, traditional strategic planning is either too expensive and/or practically ineffective – it can cost too much money, time, internal resources, etc. and with nothing more to show than thick binders with outdated information sitting on someone’s shelf. As a practical and cost-effective alternative, our clients have successfully applied what we call business “road maps.”
Traditional strategic planning: Having originated in academia, traditional strategic planning is a very logical process that was quickly adopted in the 1970’s by industry giants, like GE. Basically, it allowed a company to link its vision “at the top” to the action items to be executed by the units at the lowest levels:
- Goals & Objectives
- Policies and
- Action Items
Too expensive & ineffective: However, the process of traditional strategic planning is too expensive. Many managers get bogged down by producing large binders with a lot of information, which are read or absorbed by few colleagues. Typically, companies’ top-management are invited to a retreat to discuss and approve much of that detail. However, what was intended as the review of ‘goals and objectives’ ends up with pursuing ‘golf and objectives’. What’s worse, much of this effort gets diluted by the time it reaches the business units most in need. These units continue to struggle within the context of the company’s general alignment. Consequently, over the years, many companies are abandoning traditional strategic planning because it is simply too expensive and practically ineffective.
Practical alternative – Road Map: “Contrary to strategic planning, the road map is a relatively short document that gets constantly updated. The initial version is not a guide for the whole year. Once the initial investment is made, it’s a very dynamic document… Strategic or tactical elements can be included or changed every time there is a new and important piece of information. It goes through numerous updates at a frequency dictated by internal and external environmental change, including milestones accomplished, newly discovered additional challenges, and so on.” (Manage It Right!: Intrapreneurial Skills to Succeed in Any Organization, Chapter 10, Road Map)