Startups constantly face a lot of opportunities that could make or break them. Being a good leader at a startup means you need to consistently choose the right opportunity, over and over again. If you don't, and your competitors do, that could mean the difference between a billion dollar exit, or having to shut down and start over. There are examples of this everywhere:
- Netflix's shift from DVD rentals to streaming (and Blockbuster's downfall)
- Instagram's pivot from a check-in app to photo sharing
- Don't even get me started on Yahoo vs Google...
In hindsight, these decision were obvious. But nothing is obvious in the moment, especially when you have many equally other enticing opportunities. So why do some leadership teams consistently make the right decisions, while others don't?
The issue: misalignment and information silos
Every executive/leader in a startup as different sets of information. Examples:
- CEO: Market trends, investor feedback, etc...
- CRO: Sales pipeline, market penetration, etc...
- CTO: Engineering velocity, technical debt, feature trade-offs, etc...
The problem is that this info is siloed within each leader, causing every leader to operate effectively in their own domain, but not as a cohesive unit. This leads to lack of alignment and conviction, both of which are crucial for making the best strategic decisions.
The leadership team must have a way of disseminating information to each other. This allows the company to make the best strategic decision, and as an added bonus, also helps each leader operate more effectively in their own domain.
A proven solution: Leadership Offsites
The proven way to do this is through leadership offsites. This is where the leaders of a startup/company get together for a few days, put down their day-to-day work, and focus on sharing information with each other, with the goal of aligning on how the company should move forward.
There are other uses for leadership offsites (such as team building, departmental alignment, etc...), but strategic alignment is by far the best use of this time.
Revamping the leadership offsite format
If the goal is to make the best strategic decision possible for the company (usually meaning the most revenue growth), then this is the format I recommend:
1. Pre-offsite: the CEO sets success metrics
Long before the offsite happens, the CEO needs to decide what strategic success would look like, this helps the leadership team think towards a common goal, here are some examples:
- Growing 30% YoY over the next 3 years
- Expanding into 3 new markets in the next year
- Positioning the company for a $1B IPO in 2 years
These are usually quantitative, so they're easier to measure.
2. Pre-offsite: each leader drafts a strategic plan
With success defined, each leader now puts on their CEO hat, and creates a plan for how they would achieve the success metric. The reason why each leader does this individually is because it forces them to use the information they uniquely have.
Every leader will come up with a different strategic plan, and most will not be the best, but that's point! The goal during the offsite is to pick apart each plan, and ask learn about why each leader made the decisions they did. In doing so, you'll learn about what information they have, and don't have.
3. Offsite: pick everything apart!
Each leader presents their strategic plan, and its the job of the rest of the leaders to pick everything apart! Poke holes in their logic, ask for more information, and sharing what information you have that they're missing!
This part is usually messy, and can get heated! But that's how you know it's working. Alignment is hard work, and not always pretty.
You should be hearing things like:
- "Your number here is wrong, I have data that says otherwise"
- "If we build X, we won't be able to build Y, but your plan includes both?"
- "Your plan is entirely dependant on X, but I have info on why X won't work!"
Once all the information silos are destroyed, the leadership team can now come together, and form a strategy together, using all the information they have.
In this process, you also discover all the information you didn't know you didn't know! Now you have more information to gather for the next offsite.
Your goal at the end of the offsite should be:
- Leave with a cohesive strategy that everyone is aligned on and committed to (at least for the next quarter)
- Have a list of further information that needs to be gathered, for the next offsite
Rinse and repeat
The key is to do these offsites regularly (every quarter if possible), so you're constantly aligning and re-aligning as new information comes in. This is how you make the best strategic decisions, and the closest thing to a crystal ball you can get (short of insider trading).