1. Understand how strategy changes from startup to scale-up

Strategy should be a primary differentiating factor between a startup and a scale-up. In a startup we hardly distinguish strategy as separate from other activities. But in a scale-up, the strategy should be the key driver for growth.

Startup strategy is iterating on the founder vision until the team finds product-market-fit. Scale-up strategy is preparing for competitive battle. Being ready to win in the chosen arenas of war.

Strategy Startup Scale-up
Type Vision Battle preparation
Desired outcome Product-market-fit Product-market-dominance
Essential elements Product, Market Core competences, core purpose, core customer, brand promise, BHAG
Changes Can pivot any time Quarterly iteration
Link with execution Indistinguishable Input to quarterly priority-setting
Debating forum Brain of the founder “Strategic Thinking Council”
Source of truth Founder thoughts and feedback One-Page-Strategic-Plan

2. Separate strategic thinking from execution planning

When a venture moves from the startup phase to the scale-up phase, it is vital to give strategy its own place:

  1. Document the source of truth into a One-Page-Strategic-Plan
  2. Separate strategic thinking activities from execution planning activities
  3. Commit to the strategy for at least one quarter at a time, so that you can set stable execution priorities.
  4. Start debating strategy with the founder in a “Strategic Thinking Council”

3. Set up a separate Strategy Council

Jim Collins (Good to Great) recommends setting up a “Council” for strategic thinking. This has to be a separate team from the executive team, with a separate meeting. Though some executives should be members of both.

The Executive team contains the 7–9 top leaders of major functions and business units. They represent all major cross-functional resources that must deliver on quarterly priorities. The Executive team has collective decision authority.

The Strategic Thinking Council contains 4–6 executives. They are comfortable debating long-term strategic choices. The Strategic Thinking Council has no direct decision authority. It advises the CEO and the Executive Team. They share both the consensus positions they reach and major differences of perspective.

4. Reflect strategic urgency in the right meeting rhythm

The Strategic Thinking Council should meet more often if it is urgent to update the strategy.

I detect this urgency for clients with the Gazelles double strategy question:

“Can you state your firm’s strategy in simple terms? And is it leading to sustainable growth?”

If the team scores less than 6/10 on sustainable growth, I recommend to start weekly or biweekly meetings. Companies already enjoying sustainable growth can get by with a monthly rhythm.

5. Limit the agenda for each meeting to one pre-defined question

I recommend my clients focus every meeting on one deep dive. Beginning Councils should start with one question of Jim Collins’ hedgehog concept:

  • What are you passionate about (Core Purpose)
  • What can you be the best in the world at (Brand Promise)
  • What drives your economic engine (Profit per X)

Every meeting should show much progress on the discussion on one of these. For a next meeting, the Council can then choose to deepen the same answer even further or to tackle one of the two other questions.

Scale-up Ally clients can download a convenient bundle of the three relevant one-page tools here:

6. Be patient, a breakthrough is imminent

This cycle may go on for weeks, months or even more than a year. As Collins states, teams are done “when they just know it”. This is the moment when all three answers intersect. When the team feels with 100% certainty that this central position is the “sweet spot” for the organization’s strategy.

If the team hasn’t quite reached that point yet, it is important to remember that the open discussion is of value itself. Often, it will be in the course of “normal” work outside of the Council that the ultimate answer becomes clear.