Ep 14 Making Hard Choices Between Strategies Amie Devero EXCERPT

It's the Jump Leap Long Term Podcast, Episode 14. You're in the middle of a strategic planning retreat. The ideas are flowing and many of them are of high quality. If only they could all be implemented at the same time. Unfortunately, there is a real world outside that's waiting, and a choice must be made between some great ideas. But how do you guide the group to the point where they can all get behind a single set of implementable ideas? Hmm. Tune in to this episode to hear from me and my special guest, Ami Devereaux, as we solve this wicked problem in strategic planning together. I'm Francis Wade, and welcome to the Jump Leap Long Term Podcast. And welcome back. As you can see, I am joined on the stage with our special guest, Ami Devereaux. And right before I introduce Ami, let me say a couple of things for those of you who may be listening into our podcast for the very first time and wondering what is going on, because this is a little bit different than others that I know about. So we're here to solve a problem. We're going to be tackling an issue that is, uh, thorny and naughty one that strategic planning folks, retreats, people who do strategic planning often struggle with, especially teams. And that's kind of the way our podcast works. We pick a problem, two of us go at it, hammer and tongs. And what we're looking for is some serendipity, some kind of insight, some kind of new, let's say a new breakthrough in thinking maybe. And if that happens, then I actually ring a bell to show that we've discovered something brand new. If we don't get there in time, I ring a buzzer.

I want to hear the bell.

I don't have the bell with me. It's actually— I have to put it in afterwards. Sorry, I can put it in post.

So much for, for keeping that third wall intact, right?

Um, and The buzzer comes at the end in case we don't actually accomplish anything of any value, which is unlikely because I've never had a buzzer happen before. And I happen to know this guest really well, as you'll see in a moment. So why do we take this particular approach? Well, um, we don't do interviews in this podcast. It's really all about trying to tear apart the problem, diagnose it, so that we can find a new kind of solution that no one has ever heard before. Einstein said, "If I had an hour to solve a problem, I'd spend 55 minutes thinking about the problem and 5 minutes thinking about solutions." So we're going to be talking about the problem, but also talking about the solution. But most of our conversation is about the nature of the problem, some of the things that we've tried to do to solve it, and why it persists, and so on and so forth. And then we'll get to solutions at the very end. So once again, right before I introduce Sami, let me tell you a brief story. About Derek. So Derek is facilitating his first retreat. He's an employee of a large company and was tapped to work with the executive team at an exclusive offsite. Things have been going well, too well, in fact. They spent a great deal of time brainstorming ideas for a new vision of the company. The fact that it's 20 years away means a lot of great things can be accomplished. However, he's nervously looking at the clock. Why? Well, time is running short in this particular offsite or retreat, and on the table there are at least 5 competing ideas, and they cannot all be implemented at the same time. 2 people like Option A, the CEO likes Option B, and the whole group seems to like Option C. And there are some people who are quiet, they just seem to be lost and they're not saying anything. The fact is, the company just doesn't have the bandwidth to do them all. Plus, a couple of them don't quite overlap with the others, so there's some exclusivity. Can't all be added up into one, one final answer and say, let's do them all. So his— that's why his mind is racing, and he actually didn't plan this next step in any detail. Naively, he imagined that the team would naturally agree on how to proceed. But he's starting to think he's overestimated how easy this might be to accomplish. He needs to follow a process that will work. So here, here to solve and discuss and tear apart this particular problem is Ami Devereaux. And she's the president of Beyond Better Strategy. She works with high-growth venture-funded startups, and she's the author of Powered by Principle. Using Core Values to Build World-Class Organizations. She's a former president of Ringo. And perhaps most importantly of all, she's a former partner of Framework Consulting, which is my company. So Ami is a longtime friend, longtime colleague, longtime many things. And Ami, welcome to the show.

Thank you for having me. I'm really looking forward to this, looking forward to seeing how this wicked problem gets de-wickedized.

We're here to de-wickedize it, whatever that means. Take out the evil out of it. So what do you think of Derek's situation? Let's start with the predicament he finds himself in.

Well, so can we take a step back and talk a little bit about what— like, when we talk about an idea, what do we mean? Do we mean an idea an idea for a vision, an idea— like, what is the kind of context in which these ideas exist? This is your anecdote, so—

Right. So more details on the story. Well, they're at the point where they have options on the table.

Options for what? Options of what?

Options for different visions for where the company should go. So they've done some brainstorming, and right, this is exactly— or, or listeners are probably wondering where these options come from. So at this point in the retreat, they've decided to create at least 3 options, and they have A, B, and C. And at some point before this moment, somebody proposed option A. And they had a discussion about it, and it seemed like it was a really great option. Someone else proposed an option B, and they had a discussion, and fruitful, and yeah, okay, let's, let's, let's, let's consider that one as well. And then they had an option C where they said, okay, same thing, you know, same process, I'm gonna look— also looks good. So now they're at the moment where some people still want to create more options because option creating is fun. And Derek is nervously sweating because it's time to now decide which option or which subset of options. And I just took off the fact that he cannot— or mentioned the fact that he cannot say A plus B plus C, right? Because there's some exclusivity between them. So he can't just, you know, say, why don't we just do them all, everybody sing kumbaya and go home. So there's some decision-making that the team has to engage in, but he hasn't started the decision-making yet. They're still in the warm glow of options A, B, and C.

And so whichever one of these they choose, what's at stake is actually the strategy because the strategy will be the pathway to achieve the choice, the actual thing they choose. So we could say they're choosing between like sort of end states or choosing between visions. And if we think about a typical company, it might be something like they're choosing between the vision of growing into a new vertical or acquiring a competitor or merging with, I don't know, a supplier or something. Sure, yeah. So they're becoming vertically integrated, they're growing by acquisition, or they're organically getting a new vertical. And each of those will dictate a completely different approach. So there's a lot at stake, right?

And there's some overlap, so you could take a bit of, bit of one and a bit of another. But right, there's a lot at stake because they're shaping the next 10, 15, 20, 30, whatever horizon may be, they're making some decisions that are going to change the game. So these aren't minor decisions that they're going to make. I think in this case, these are big decisions. These are big, hairy, audacious goals. And these are going to be, you know, like you said, those are— those 3 options that you mentioned are game-changing in the sense that you don't proceed in any of those three directions lightly.

And, and they— and whatever you decide, it's not so much whether they're light or heavy, but they will dictate completely different approaches. So even if they each dictate an innumerable number of approaches, those innumerable numbers will be distinctive. So it's like if you and I are planning a trip and we're in, you know, we're in Jamaica, and we're deciding whether to go to New York or Sydney, Australia, or Moscow, Paris, you know, Paris. Sure. So each one is a completely different direction, a completely different mode of transport likely, and period of time and so on.

Okay, hope you're enjoying this free excerpt from the Jump Leap Long Term Strategy Podcast. Interested in finding out more about getting a subscription to full episodes? Visit www.longtermstrategy.info. Right, so there's, there's, there's some— this is why he's nervous, because he, you know, he hadn't quite thought it through. And, you know, you kind of hope for the best in some of these things, and the hope, you know, in the best of worlds, you could say A plus B plus C, everybody's happy, let's go home. Which is—

well, you're not going—

there's actually a problem with that.

Actually, you don't get to go home either way. I mean, once you choose one, now you have to actually work on the strategy, right? Right.

But at least—

at least you can't even get going with that until this gets decided, right?

Right. The strategy can't even start until they make a decision because the decision comes first. I know there's teams, and you've probably been in retreats where people can, you know, people just say, well, can't we do a strategy for all of them?

I have not seen that. But usually what I see is people saying, can't we just come up with the numbers and not worry about what, you know, what those numbers describe exactly? Like, we want to be $10 million in, you know, annual revenue or something. But they haven't actually thought through like what that, you know, what would that company look like? What would that world look like in which we have $10 million in revenue? So what we're doing here is we're describing the world. This is the world that will exist when they have achieved their 20-year goal. And that world, once you've described the world, now you have, you know, Now, you have the constraints that are going to drive your creation of the strategy. That's okay. It's an enabling constraint as they would say in the product world.

Let's take what you said just for a moment because some of the Dereks of the world won't solve the problem. They'll go to what you said and they'll say, well, numbers are just numbers, right? And we can decide how we're going to get there later. So they could just punt, like you, like you sort of hinted, put the decision, the hard decision, and go with an easier decision, which is, well, in all cases, how much money, how much revenue do we really want, you know? And then how many customers, and how many customers, and even, even actually, even customers would be a problem if—

well, in fact, it would be. I mean, because if you are only looking at lagging indicators you don't have the numerators that tell you how to back, how to even back into the numbers. So, you know, I'm thinking about, you know, this, and by the way, this is really common in the startup world because startups have this sort of underlying philosophy of just like grow at any cost. And strategy is for losers, not really strategy is for losers, but strategy beyond next week is for losers. And so, you know, they have— we have to be nimble, we have to be responsive. And yes, all of that is true. But you also need to know if you're going to Hong Kong or New York, you know, because how you make decisions in the moment changes. So I think if you do try to either punt and do it just with the numbers, then you end up with a very facile kind of the CPA's version of a strategy, which is not strategic. It's just mile markers.

Right. It doesn't actually have a story. It doesn't have a theory. Right. Good way of putting it. It doesn't have a story to tell. It's just numbers.

Strategy is a theory. It's a narrative about who we are and how we do it. And if you can't tell the story, the fact that you're earning $10 million in revenue is a kind of meaningless fact. Right. But the alternative is that you put them all together and cobble something, which then you eliminate all the enabling constraints.

Right, right, right. So, so, so one of the very big examples that I've written about lately is the Sustainable Development Goals, where they did exactly what we're saying one shouldn't do, which is to set goals and then leave the details for later. And the unfortunate fallout of that is that there are 17 Sustainable Development Goals in the world, has a capacity for maybe 1.5 at any given point in time.

Yeah, just in terms of resources and energy and focus and, and, and anything you can possibly think of that's of a limited nature.

But there are companies who will happily put a number to a vision statement and then say that's their strategy, right? Constantly. Yeah. And it's not a strategy. It's a goal. And they will happily go a year and 2 and 3 years actually working towards the goal without having a strategy, right?

I don't think it doesn't necessarily— it's not that it's not achievable that way. You could achieve it. But you're achieving it without developing a strategy. So, you're just essentially doing what you're already doing. Maybe you're doing it more or better with more people, or you're doing it more efficiently, or you added ChatGPT. But you're tweaking around the edges. You're not developing a strategy.

Or you could have an individual who, like a strong founder, right? And he or she just whatever he wakes up with this month or this week is the strategy.

Well, and that's, that's as I said, that is pretty typical in startups, you know, which is the strategy is driven by a combination of the founder's force of personality and intelligence and opportunities. So it's reactive, decisively reactive, which is better than being indecisively reactive. But it's still not a strategy, except insofar as you're making strategic choices, but not driven by an overarching kind of narrative.

No, I'm really interested because I don't have those kinds of clients. I'm lucky. I don't come into them, but you do.

It's not just—

How do you explain it?

Let me give you a different example. So, I have a client who is the head of digital for Fortune 50 manufacturing company, all right? And so he sits— he's not on the board, but he's like one tier below the C-suite. And as— because he runs all of the tech, not the manufacturing technology, but all of the digital technology that drives everything. So he's the one who makes decisions about the ERP system they use that feeds into the factories, that tells the machines what the— what to make. And he's the one who is thinking through like, how do we automate the systems that are going to convey— they have like 20 people who are the subject matter experts on the constraints of their manufacturing because there are something like a billion possibilities of how you put the things they manufacture together. So if you were one of their clients, you could go online and potentially there are a billion possible combinations you could come up with for an order. Okay, they can't manufacture all of those. Those are just the mathematical possibilities of components. So the problem is they have no way of knowing in an automated way what is possible. The people who know are these 20 people who are going to retire shortly. It's like, that's the kind of thing he has to manage, right? Like, how do you convey that knowledge into an ERP system, preferably using machine learning and AI? Again, nobody knows how to do that. However, so that's, that's just kind of a detour. In the meantime, the company is— the company has done well, but they have a competitor who is undercutting them. And because they sell into a wholesale market, so like imagine what they sold was, um, drywall. And so they don't sell drywall to people like you and me, they sell drywall to builders. Okay, right. And builders don't really care whether you have high-quality drywall, they care whether they can get the cheapest price because they're building giant subdivisions. Which means that even though this company kind of owns their space, there are competitors who are eating away at them And because they're undercutting them in price, also in quality, but nonetheless, they're, they're starting to make a little bit of headway. So one of the things they've considered is a strategy in which they go direct to consumers.

Oh, okay. Cut out the— I thought the middle person.

Not cut out, but at least expand into a consumer market. But the problem is, is that the product really is as unsexy as drywall. This is not a product that is like Instagram ready.

Okay. Okay.

So it's a super essential product, hence their heft and their global stature. And they're also trying to make the product more sort of sexy, not just sexy, but also more useful by adding technology to it. So like imagine that it was a window and the window has built-in AI and it could identify the— it's not a window, um, in the window decisions about, about opaque to be based on energy savings or whatever. So their product, they do have a feature like that, but it's not selling because the price point is very, very high. And since their marketplace is, you know, wholesale, it's— it doesn't capture the sexiness So now they have this strategic problem. The one way for them to definitely expand their market share is to have a different target market, which would be consumers.

You've reached the end of a complimentary clip from the Jump Leap Long-Term Strategy Podcast. To hear the full episode, go over to www.longtermstrategy.info. And grab a subscription or a free trial. See you there. And here's a clip from our next episode. You're someone who is already a long-term thinker working in perhaps a non-for-profit organization. Unlike many, you don't need to be convinced about the importance of long-term thinking. Somewhere in the past, perhaps your childhood or in your early career, you embedded the idea of long-term thinking in your character, and now balancing short and long-term planning, thinking, strategy, vision are a part of who you are. But this may be why you are now a bit confused, because others around you don't quite share all of this trait. They may believe in long-term visions, but they don't believe in long-term planning. As such, you feel a little like a fish out of water, always harping on the need for long-term planning and sometimes asking some inconvenient questions. You can't understand why others don't share your concern, and it's not that you are particularly ESG sustainable or anything like that. Nor do you come from an old school, you sense that the company would do better or make better decisions if it had more than the usual short-term plan to go with its long-term vision. But how do you convince others in the C-suite and the board to think with this additional lens if they already like the idea of a vision of a long-term nature? They might be asking, why do we need a strategic plan to go with it? It's just more work. And if you like the work we're doing, feel free to follow us at our website, strategyconf.fwconsulting.com, or like or leave a comment on one of the popular podcast apps such as Stitcher or iTunes. This is Francis Wade, and I'm signing out from the Jump Leap Long-Term Strategic Planning Podcast. See you later.