Nearly all companies face the same question: How can we grow? The answer often boils down to whether their strategy is to say no or to say yes.
You’ve seen it before. A secretive strategic planning meeting where a small group of leaders spend a few hours or days birthing a strategy for the next five years. A new strategic plan, released with much fanfare and optimism, intended to drive the organization into a better, brighter, and bigger future.
What happens next? In the best of worlds, people absorb the strategy and change behavior to implement it—for a few months. The plan—often complex, elegant, and abstract—then fades into fuzzy memory as day-to-day demands push workers back to old, reliable behaviors and decisions. Strategy dies under the crush of work and the temptation of the habitual.
Is this because the growth strategies are bad? I say no, although there are plenty of ill-conceived strategies out there.
Leaders are tempted to develop complex strategies to deliver growth. The strategies are typically carefully considered, painstakingly crafted, analytically rigorous, and nearly impossible to implement. A strategy that appears (or, in reality, is) smart and effective to a small leadership team frequently is received by those required to execute the strategy as meaningless, out-of-touch, and irrelevant to day-to-day operations.
I contend that growth strategy can be boiled down to one simple test: Is our plan to stay intensely focused on our core capabilities and avoid distraction, or is our plan to aggressively pursue new opportunities to build new capabilities as they arise?
I’ve seen both work. Many strategy experts advocate a focus on core capabilities and offerings as a way to excel at few things. They opt to say no. The benefits of saying no include:
- More focused use of stretched resources
- Stronger ability to build a few exceptional capabilities upon which the firm can compete
- Stronger brand identity
I’ve also experienced a 10-year run of year-on-year growth at a firm that opted to say yes. Where some see a lack of strategy, others (me included) see a deliberate strategy of remaining open to and aggressively pursuing opportunities as they show themselves. I’d argue that this firm’s core capability was to quickly identify, screen, and pursue attractive new growth opportunities in an extremely resource-efficient manner.
Both approaches can work. Much depends on the company’s size, sector, and risk tolerance.
But one thing is absolutely clear: Anyone who tells you they know what will happen five years from now is lying. A strategy that is designed to say yes in an uncertain world has merit.