Learning, and doing, strategy
Strategic thinking is a skill that can be taught
Every month I join a group of New York tech operators to talk shop. The members of this group, mostly COOs at fast-growing companies, pride themselves on their ability to connect daily details to the bigger picture. But one constant refrain in our meetings is that there just aren’t enough people in our organizations who “know how to think strategically.” About a year ago, a member of the group responded to this refrain with a question: “Have any of you been able to teach strategic thinking successfully?” Crickets.
What became clear as we discussed further, and what my time at Squarespace reinforced, was that learning to think strategically is a matter of practice. This is true not just for individuals, but for organizations too.
Organizations that learn to think strategically are those that treat it as a constant practice. That’s because strategy is not just a plan to win — it’s a process. Making strategy and executing strategy are two sides of the same coin. You don’t have a strategy. You do strategy.
The trick is to build a management system for strategic discussion. Building a legible system fosters better decision-making. Just as important, it forces new leaders to practice strategy. Having to stand and deliver a plan for your team that fits into the company strategy is the best way to get better at thinking strategically.
In short:
Strategic decision-making should be designed as a continuous process.
Introducing others into the strategy process is the best way to teach strategic thinking.
What is Strategy?
When defining strategy, it never hurts to start with Michael Porter:
“Competitive strategy is about being different, which means deliberately choosing a set of activities to deliver a unique mix of value. A firm must choose different activities or perform activities differently.”
Once formed, a strategy is the lens through which you should weigh trade-offs and make tough choices. The emphasis should be on the consistency of your approach and its difference from others’.
In practice, this definition feels a bit incomplete. Though strategy influences each tough choice, it is also informed by all the tough choices made before it. As people across an organization make decisions, they are subtly influencing the strategy itself. They’re reinterpreting the strategy, discovering its nuances, and voting on which parts of the strategy work and which do not. Strategy is a dynamic process.
This means that strategy is both the lens through which tough choices are made and the process by which those choices are internalized by the organization. This is especially true in a young organization pursuing an emergent strategy, which evolves quickly based on what’s learned on the ground.
Execs should inject strategic thinking into the planning process
Organizations that do strategy well need to master both parts of the strategy loop. They need to be good at communicating their strategy out so that people can use it to make hard decisions. And they need to be good at collecting what these decisions are to clarify where it needs reinforcing or inform how it should evolve.
In building a healthy strategic process, you have to start somewhere. Usually that “somewhere” is Objectives and Key Results (OKRs) or Quarterly Business Reviews (QBRs). These serve as a formal process for giving feedback on tough choices. Company leaders can review choices and then ask, “Did a given team make the right choice, and how does the choice align with our strategy?”
Squarespace introduced QBRs in 2017 when the company was more than 600 people. Before QBRs, each department did goal-setting and road-mapping largely on their own. Some groups or teams used OKRs as the structure for their goal-setting, others did not. Most important, there was no clearinghouse process for alignment, and though everyone agreed on the multi-year story of where the company was headed, we didn’t all agree on who was responsible for what, when. Individual departments would pursue a plan — one that was plausibly related to the multi-year success of the company — without realizing their department’s plan diverged from everyone else’s. QBRs were meant to highlight these areas of misalignment looking forward, and to impose some measure of accountability looking backward.
Getting good at QBRs took a couple of years. Nicole Anasenes, our COO at the time, initiated and drove the process forward. This was a Herculean task, and she deserves a tremendous amount of credit for the impact it had. After a couple of years, the benefits became very clear while the cost of doing QBRs fell. Practice made us better.
QBRs starkly exposed the need for a much more clearly articulated company strategy. It put pressure on the exec team to refine our plan and communicate it more broadly. In essence, we were building the bottom up loop without a formal top down strategy loop. Articulating the strategy clearly took months of work, and proceeded in parallel to the QBRs. (We’ll return to this in a bit.)
When I described our 18-month evolution to the group of New York operators, I saw many nods of recognition. Here’s how it played out, in simplified form:
First: Dissonance
Each department head was given 30 to 90 minutes to present on the quarter that closed and the quarter to come. Department heads often brought a few of their deputies, both to give them some exposure to leadership and to help answer questions about key projects in more detail.
Tactical misalignment appeared immediately. One department would say, “We plan to have system X implemented by the end of this quarter.” Another department, which was critical for the implementation of system X, would say, “What’s that? We haven’t heard of it and haven’t planned for it.” Eek.
The early QBRs also exposed incompatible interpretations of what our strategy meant. One department would say, “Because we keep hearing international growth is so important, we’ve deprioritized work in areas A, B, and C to prioritize international projects X, Y, and Z.” The exec team would respond, “But you’re over-interpreting us! International growth is important, but so too is the business we already have. You need to be able to balance both.” Without a clear framework for how to balance components of the strategy (top down) and without a track record of publicly debated tough choices from the past (bottom up), department heads and managers struggled to interpret strategy on their own.
This dissonance was unsettling. As an executive team, we looked at each other and admitted, “We thought we were all on the same page, but obviously we aren’t.” As individual department leaders, we had to temper the confidence with which we were making and communicating decisions. Word also got out to the larger organization. Though each QBR contained fewer than 25 people, folks further afield in the organization heard about the dissonance. An element of doubt crept into daily work.
Then: Bloat
The response to this uncertainty was predictable: QBRs began to bloat. More people came, since they saw QBRs as the only venue to root out potential misalignment. Teams presented their work in more detail, because they wanted to be sure they weren’t doing anything off base. And department leaders felt pressure from below them to represent the full scope of their work in order to provide assurances to their team that the work was understood and valued.
Discussions became less valuable because there were too many rabbit holes to fall into. Prep became onerous because more people felt obligated to give more detail. The tenor of the conversation drifted from “What’s important and what are we doing to achieve it?” to “Here’s everything we’re doing, any objections?”
Discussion also became less forthright. Because the group was now bigger, with more junior participants who weren’t as comfortable around the exec team and vice versa, we pulled punches. The most important conversations happened after QBRs, outside the room, and then were relayed back to affected teams by their department head. It became hard for non-exec participants to understand the feedback they got and to apply it themselves.
As the presentations sprawled, we had to set aside two full days for the QBRs — more than twelve hours of meetings in total. It was not fun.
Finally: Standardization and focus
After a handful of QBR cycles, each slightly more onerous than the one before it, we clearly needed to impose more constraints. Here’s what we did:
Shortened almost all QBRs to 30 minutes
Consolidated QBRs to a single day, with a debrief meeting for the exec team at the end
Reduced the invite list to department heads only (with a couple exceptions)
Asked leaders to plan for 15 minutes of material and 15 minutes of discussion
Bam! Those constraints did the trick. Without the time to cover everything, leaders were forced to highlight only the most important topics. Minute for minute, the presentations were much richer — no more rabbit holes. (Well, fewer rabbit holes at least.) The overlap between departments’ presentations increased too. We were able to get different angles on the same few priorities. Because of these denser connections, the discussion at the end was meatier.
The trade off to shorter presentations and smaller groups was that execs needed to do the work to bring their departments along. We each refined pre-QBR processes for reviewing the past quarter and planning for the next one, and debriefed with our deputies once the QBRs were over to ensure alignment. These within-department conversations felt safer than QBRs with 30 people (including the entire exec team) and made room for coaching. We often made more exhaustive presentations to share with the whole department to establish shared context and help folks ladder their projects into the bigger story.
It took at least 18 months to get to this steady state. Here’s what we learned:
Keep presentations short to force focus on only the most important issues
Keep the group small to build trust and minimize politics
Replicate the process within your own department to teach thinking strategically
Once built, the management system demands a well-articulated strategy
One reasonable objection to all this QBR talk is this: Quarterly planning is not strategy.
Indeed. QBRs made the need for a well articulated strategy abundantly clear. We were building out the bottom up portion of the strategy loop (the “what” and “how” ) without a top down loop (the “why”). Without that structure in place, directors and managers across the organization struggled to ladder their plans into the broader strategy. They experienced daily misalignment with other teams, but didn’t have a shared framework to resolve goals.
As an exec team, we knew we had to fix this. We committed to the company in an All Hands that we would return in two months with a well-articulated strategy document. Nicole and Mary Good, our Chief People Officer, organized a two day offsite for us to build out the strategy. We focused on where we wanted to be in three years — far enough out to be ambitious without being untethered to reality.
We started from Patrick Lencioni’s The Advantage, and modified some of his ideas to fit the unique communication needs at Squarespace. We also took some inspiration from Asana’s “pyramid of clarity,” though we deviated in subtle but substantial ways. After two days of discussion and workshopping, we landed on a single page summary of where the company was headed over the next three years. It looked something like this:
(How we settled on our five priorities deserves a separate post. This post is focused on process.)
We returned to the office to stress test it with the leadership tier below us. We got feedback on what was clear and what wasn’t, what rang true and what didn’t. After a series of revisions, we finally shared a 10-slide deck with the whole company at an All Hands meeting. We sent the deck around for everyone’s reference and reuse. The language and diagrams then appeared at the start of every All Hands. We repeated ourselves until we were hoarse.
The five priorities became the frame for every QBR thereafter. Each department framed its priorities and metrics under one of the five priorities. If something didn’t fit among the five, it probably wasn’t worth doing. This structure helped teams spot outlier work that should be debated, and also bare spots where they weren’t contributing to a company priority. (There’s nothing wrong with that finding per se, but it was good to prompt a conversation about it.) The five priorities simplified the process of assessing the strategic rationale of our work. Every strategic conversation became easier.
Managers can establish norms that teach individuals how to do strategy
This two-looped system for strategy and execution is the ideal environment for developing strategic thinking. Most organizations, especially younger ones, don’t have it. That’s okay — every week presents opportunities to model and practice strategic thinking.
As a manager, that means telling direct reports that you expect them to exercise their own strategic judgment. I particularly like how Chris Sanborn, President at The Class, communicated it to his team:
Present the problem or opportunity
Show you studied the potential solutions
Make a recommendation
Ask for validation
This one-on-one coaching will create lots of opportunities to develop strategic thinking. For even the most junior employees, it’s the kind of practice that will prepare them for the broader strategic conversations around them.