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We need to talk about strategy frameworks.
The foundation for how a company "thinks".
The word “strategy” gets thrown around a lot but a strategy is just a set of choices for where and how we spend our time. A strategy framework is the tool we use to make these choices. There are a lot of strategy frameworks out there. They all generally work the same way. No strategy framework is superior but the one we choose will anchor the team around a shared way of thinking and will therefore have big implications for our culture. So, instead of adopting a framework because we heard it worked at another company, we should be intentional and choose one that reflects how we want our team to think. More on this in a future post, but a big part of a Founder & CEO’s job is teaching the team how to think (note: not what to think).
The two strategy frameworks I’ve found most effective are OKRs and Playing to Win. The OKR framework was invented by John Doerr and was applied famously at Google. Playing to Win was invented by A.G. Lafley and Roger Martin and applied at P&G. The frameworks, you’ll see, do the same job but they approach it wildly differently and create very different thinking cultures.
Playing To Win
The Playing To Win framework asks 4 questions that we answer in relation to each other.
Q1. What does winning look like? First we must define long-term success through a winning statement. Winning statements must be objective and clearly demonstrate “winning”.
Q2. Where are we going to play? If our company is competing against other companies, we need to define where on the field we’re going to play to achieve our winning statement. An ideal area of play is a dimension of our market where we have an advantage.
Q3. How do we win? Once we determine where we will play, we must determine the tactics we’ll use to win for each of those areas.
Q4. How will we measure success? Finally, once we have our winning statement, the areas we’re going to play, and the set of tactics for each area, we need to determine how we will measure and monitor our progress towards success via measures and goals.
The first step in applying Playing to Win is to apply it at the highest level, to the company. A company’s mission statement is a company’s winning statement. The areas of play are our unique approach to the components of our Equation. How we win are the tactics we’ll use to drive the inputs of those components and our measurements are baselines and corresponding aspirational goals of those inputs. Once we do this exercise (ask these questions) at the company level, we repeat it for each of the areas, then we repeat it for each of the tactics, cascading it until we get to a level of granularity where goals are ownable.
Playing to Win cultivates highly strategic thinking because it forces us to consider what differentiates us from our competitors and to come up with an approach to building our products in a way that only we can. It’s a great framework for creative leaders who aim to inspire and motivate their teams through shared critical thinking.
OKR” stands for “Objectives and Key Results.” The Objective is what we intend to achieve. The Key Results map how we’ll achieve our Objective and measure our progress. John Doerr describes great Objectives as “significant, concrete, action-oriented and inspirational” (sounds a lot like a winning statement!). He describes good Key Results as, “specific, time-bound, aggressive, measurable and verifiable” (sounds a lot like Qs 3&4 of PtW!). Since the idea of OKRs can be fuzzy, here’s an example:
Sample Objective: Increase readership of embot.blog by the end of Q2
Sample Key Result 1: Increase the number of blog subscribers (from 115 to 200 by Q2)
Sample Key Result 2: Increase frequency of posts (from 1x/week to 2x per week by Q2)
Sample Key Result 3: Increase the number of social channels for posts (from 1 to 3 by Q3)
Sample Key Result 4: Increase the number of retweets per post (from avg of 1 retweet/post to avg of 3 retweets/post by Q3)
The first step in applying OKRs is to apply it at the highest level, to the company. A company’s mission statement is its primary Objective. The KRs that drive that objective are derived from the components of our Equation. Those KRs become Objectives and we continue to cascade the framework, until we get to a level of granularity where KRs are ownable, mapping to our Equation.
The OKR framework cultivates a culture of execution and forces us to think critically about what our most important inputs are and what levers we have to move them. It’s a great framework for leaders with computer brains who aim to rally and motivate their teams around results.
Choosing a framework, whether it’s OKRs, Playing to Win, or one of the other dozens that are out there, is more about what kind of leader you are, and how you want your team to think than it is about the result of the framework. The most successful companies all use different frameworks and apply them in different ways. Find the one that works best for you and what you’re building, or combine a few of them to make something unique.