Do you understand your company’s external ecosystem?

What is the purpose of this article?

Help founders, the C-Suite, board of directors, investors, and others understand your company’s external ecosystem.

You can download a PDF of this article from: Do you understand your company’s external ecosystem

What are the critical learnings in this article?

  • Not understanding your company’s external ecosystem can doom your company.
  • An ecosystem is broader and more complex than your company’s stakeholders.

What is an ecosystem?

A business ecosystem is the network of organizations—including suppliers, distributors, customers, competitors, government agencies, board of directors, C-Suite, employees, and so on—involved in the delivery of a specific product or service through both competition and cooperation. The idea is that each entity in the ecosystem affects and is affected by the others, creating a constantly evolving relationship in which each entity must be flexible and adaptable in order to survive as in a biological ecosystem.1

A stakeholder is a party that has an interest in a company and can either directly affect or be affected by the business. 2

An ecosystem is broader than your company’s stakeholders, interact with each other, and may indirectly affect or be affected by your company.  Ecosystem members may be competing, may emerge in the future, or disappear in the future. The members may not even be aware of your company.

Who are some of the potential members of your company’s external ecosystem?

Cash paying customers, users, suppliers, distributers, established companies, competitors, legislators, regulators, NGO (non-governmental organizations), not-for-profits, technology researchers and academic institutions, communities ranging from local to global, industry consortia, governments at national and local level (including legislators and regulators), entrepreneurs or startups, etc.

Why do you need to understand your external ecosystem?

Imagine if you don’t understand:

  • Why your customers buy from you rather than other companies? How your customers perceive your competitive value proposition?
  • How potential employees perceive the value of joining your company?
  • How current and potential investors perceive your company, relative to other investment opportunities?
  • And so on.

Lack of understanding can doom your company.

What are the three types of interaction with your company?

  • One-on-one people interaction e.g. individual email, phone or video call, in person face-to-face.
  • One-on-one software interactions e.g. chat bot, using the software components of your solution, browsing your website.
  • Indirect interaction e.g. mass emails, reading about your company on social media.

Ecosystem members can impact your company, even if there is no interaction.

  • Some members may have no interaction with your company? E.g. NGOs (Non-Governmental Organization) which drive changes to laws and regulations impacting your industry and your company.
  • Another example is researchers developing and rolling out new technology. E.g. ChatGBT signed up over 1 million users in five days. Netflix took 3.5 years, Twitter took 2 years, Facebook took 10 months, Spotify took 5 months, and Instagram took 2.5 months.

What do you need to understand about your external ecosystem?

All these questions need to customized for your specific situation.

The following are questions regarding members who interact with your company

  • Who are the members of your external ecosystem?
  • How many members are there, of each type?
  • Which members interact one-on-one with people in your company?
  • Which members have one-on-one software interactions?
  • Which members have interactions?
  • What are the members problems, needs, and issues?
  • What are the members perceptions regarding your company, its leadership, employees, and the specific points of interaction?

To complete your picture of your external ecosystem, you also need to identify and understand:

  • Who are the members who can impact your company but don’t interact with your company?
  • How do all these external members interact with each other?

What is the current challenge most large companies face regarding their external ecosystem?

PWC’s 26th annual global CEO survey showed that few companies were collaborating with ecosystem members to generate business value or address social issues. 1

  • With established companies or competitors: 26% to create business value, 13% to impact social issues
  • With industry consortia: 20% to create business value, 16% to impact social issues
  • With entrepreneurs or start-ups: 20% to create business value, 10% to impact social issues.
  • With governments at the national or local level: 19% to create business value; 18% to impact social issues
  • With academic institutions: 16% to create business value, 12% to impact social issues
  • With non-governmental organizations: 10% to create business value, 14% to impact social issues.

What are your next steps?

Recognize that understanding your external ecosystem members will be an iterative, evolving, and ongoing process. This understanding is part of what drives your company’s short and long-term plans and execution. The first few steps include:

  • List your current external ecosystem members.
  • For each one, customize the questions above and answer them. If you don’t have fact based answers, then document your assumptions.
  • Identity the potential short-term impacts on your company.
  • Look 5-10 years into the future and create scenario of ecosystem members and answers or assumptions to the questions above.
  • Identify the potential long-term impacts on your company.


1 Adapted from Investopedia 2021 Jan 20

2 Adapted from Investopedia 2023 Jan 09

3 PWC’s 26th annual Global CEO Survey, Page 18

 What further reading should you do?

Do you understand your customers? V2

What is the difference between strategy and tactics? V2

What is the purpose of this article?

  • Enable founders, C-Suite, Board of Directors, and investors to discuss and asses the company’s strategy and tactics.

You can download a PDF of this article from: What is the difference between strategy and tactics V2

 What are the critical learnings in this article?

  • Long-term success requires both the right strategy and successful execution of the right tactics.
  • Everyone in the company must understand the company’s strategy and focus their energy on achieving the strategy.

 What is strategy?

What will the company’s future success look like to the members of the company’s ecosystem?

  • How will customers perceive success? For example, “In five years time, we will be seen as the world’s best online search company.” is much different from “In five years time, we will be the world’s biggest search company.”
  • Your strategy will define assumptions as to who your target customers are, their ecosystem, and why the customers will be dealing with you rather than your competition. And of course, your competition will also change.  I’ve seen too many company failures resulting from strategies that basically say “This is what we are going to do.  This is the vision and mission of the company. We hope the customers will buy from us.  Hope is our strategy.”.
  • Strategy describes the company’s position in the customer’s ecosystem.
  • How will the other members of your company’s ecosystem perceive the future success of the company? Ecosystem members include: customers, employees, competitors, partners, and investors.

What are tactics?

  • What do you have to do to achieve future success? What are the types of people you need to build that future? (i.e. board directors, CEO, advisory board, C-Suite, management, and staff) If you are in a rapidly changing environment, you need people who can learn quickly and change quickly – knowing what worked 20 years ago may not be helpful in solving future challenges.
  • How will you enable every single person in the company from entry level staff through to the board of directors to understand how they are achieving the company’s strategy. There is a story that when President Kennedy visited a NASA facility in 1962, he asked a janitor with a broom what the janitor was doing. The janitor supposedly said “Mr. President, I’m helping put a man on the moon.”
  • The tactics will depend on the person’s role in the company e.g. The CEO may do acquisitions and divestitures, at all levels there may be processes, technology and talent changes, and the janitors have the tools to create and maintain cleaner work environment.

What are two illustrations of the difference between strategy and tactics?

#1 Hannibal 218-204 BC

  • Hannibal crossed the Alps (Romans thought this was not possible).
  • Hannibal won massive victories in Italy in 18 months – 70,000 Romans died in battle of Cannae; ¼ of Roman adult males killed.
  • Hannibal never lost a battle in Italy during the next 14 years
  • Roman Consul Fabius avoided battle with Hannibal but did not win the war.
  • Roman General Scipio did NOT fight Hannibal in Italy, because Scipio knew he’d lose. Scipio conquered Hannibal’s financial and logistical bases in Spain and then attacked Carthage, resulting in Hannibal being recalled from Italy.
  • Hannibal never attacked the city of Rome. Rome never surrendered or gave up. Hannibal lost the war.
  • Scipio never fought Hannibal it Italy, and won the war.

The key to strategy is being clear on what long-term success actually looks like. Then you need to successfully execute the right tactics. Hannibal and Scipio had different strategies i.e. different definitions of what long-term success looked like.

#2 Tiger Woods – 2006 British Open

  • Tiger Woods’ competitors teed off, using drivers to hit balls over the bunkers.
  • Tiger Woods typically used a four or five iron.
  • His long-term vision of success was getting the ball in the hole.
  • He then determined the best place to putt from to get the ball in the hole
  • Working backwards from the best place to put from; he then used four or five iron to position for eventual success. Tiger Woods, like Scipio, was focused on long-term success.

The key to strategy is being clear on what long-term success actually looks like. Then you need to successfully execute the right tactics.

Doesn’t good execution beat strategy?

  • I’ve often heard people say that good execution beats strategy. Being able to run faster, and last longer, than the competitors in your race, is of no value if you are running away from the finish line.
  • Your challenge is to have a better strategy than the competition and to successfully execute the right tactics.

Do you need an Office of Strategic Initiatives?

  • Do not create an Office of Strategic Initiatives, with EVPs, VP, Directors, etc. of Strategic Initiatives.
  • Why not?
  • Every single person in your company must be focused on executing the tactics to achieve the strategy of your company.
  • Every single person in your company needs to understand the relationship between what they do every day and your company’s strategy.
  • When ever I come across an organization with people whose titles include “Strategic Initiatives”, I make two observations: a) I wonder how those leaders and employees who are not working on strategic initiatives feel and are motivated b) I wonder why the company does not eliminate all the people, processes, and technology that are not focused on achieving the company’s strategy.

What are your next steps?

Phase One

  • Individually survey each board director and C-Suite member.
  • Ask them what the strategy of the company is and what are they doing to achieve the strategy of the company.
  • Identify the metrics regarding the strategy.
  • Document the metrics for each member of the board of directors and the C-Suite.
  • Analyze the results to determine: common understanding of the strategy and alignment of individual leader efforts with the overall strategy.
  • What are the learnings of the analysis?
  • What needs to change? Some of the changes may require replacing people.

Further phases

  • Extend the Phase One process throughout your company.

 What further reading should you do?

Is your company planning to fail?

What are the three types of talent successful companies require?

What is the purpose of this article?

To enable founders, investors, the board of directors, and the C-suite to discuss what type of talent is needed to create and maintain world-leading companies.  I recognize that many companies do not strive to be a world leader or leader in their own country.

You can download a PDF of this article from: What are the three types of talent successful companies require

How do you read this article?

This article uses the analogy of athletes that strive to win at the Olympics.  They seek to be the best in the world.

What are the three types of talent associated with global winners?

  • The team members. These are the people who actually have win the race. They must beat the competition in order to stand on the podium.
  • The trainers. They use a structured process to improve specific aspects of each team members skills e.g. using videos of the team members show what specific changes need to be made. The trainers are deep experts in specific skills.
  • The coaches. They focus on the members minds and mental state. For example, if an athlete cannot visualize in their mind what it looks like as they cross the finish line, they likely will never win. “People cannot do things they cannot imagine”1.  The athletes must also cope with frequent failure. Few win every single competition.

What are the characteristics of the journey to become a global champion?

  • There are fundamental differences between the team, the trainers, and the coaches. g. great coaches are rarely great athletes and great athletes are rarely great coaches.
  • It takes time to become a global champion.
  • People must have the ability to transform themselves, to learn, unlearn, and constantly improve.
  • No one stays a global champion forever.
  • The coaches and trainers change over time. Global champions are supported by trainers and coaches that are also the best in the world.
  • People need to have the potential to reach the next level. People don’t immediately jump to become global champions.
  • Not everyone will become a global champion. It is very competitive. Not everyone has the potential.
  • Very tiny changes in results differentiate global champions from 4th It could be a few hundredths of a second for an athlete.
  • Trying very hard, by itself, is not enough to become a global champion.
  • Luck also plays a role e.g. a leading coach becomes available; a competitor suffers an injury.

What are the three types of talent in your company?

  • The team is comprised of all of the company’s full and part-time employees. This includes everyone from the board of directors to front line staff.  The company is constantly developing the talent of its employees.
  • The trainers include external experts. (e.g. lawyers, accountants, consultants who are industry and functional experts), educational organizations, etc.
  • The coaches go by many names e.g. coach, strategic advisor, mentor.

What are the implications for you and your company?

  • In today’s virtual global economy, you may be competing against global champions, even if you’re in a local market. E.g. Nigeria’s largest ride sharing company is Bolt, based in Estonia, with a valuation of $4.3 billion.
  • It’s hard to become a global champion if your talent (team, trainers, and coaches) is not among the best in the world.
  • Talent around the world is constantly improving. The talent that was successful 20 years ago loses to today’s talent.
  • Growing the value of your company requires growing the value of your talent.

What are your next steps?

  • What is your company’s value creation plan: for the next 1-3 years; for the next 4-6 years?
  • What are the three types of talent you will need in the future?
  • What changes in talent are needed?
  • What is your ongoing process for acquiring, retaining, developing, and exiting your team talent?
  • What is your ongoing process for assessing and changing your training and coaching talent?


1 Peter Jensen (Olympic coach), Igniting the third factor, Toronto, Performance Coaching Inc., 2008, page 105

How can the shareholders agreement focus everyone on value? V2

What is the purpose of this article?

This article discusses how a shareholders agreement in a private company could help focus everyone on value creation and extraction.

I am not providing legal advice. Please consult a lawyer if you need legal advice on creating, reviewing, or updating a shareholders agreement or other legal governance documents.

You can download a PDF of this article from: How can the shareholders agreement focus everyone on value V2

What are two types of shareholders agreements

#1 USA (Unanimous Shareholder Agreement)

“The written agreement among all of the shareholders of the corporation can wholly or partly restrict the powers of the directors to manage, or supervise the management of the business and the affairs of the corporation”1

#2 Voting trust or pooling agreement

“Some shareholders of a corporation may choose to enter into voting arrangements such as voting trusts, pooling agreements or shareholder agreements under which they agree to vote their shares in a consistent manner.  Voting arrangement of this sort….do not have the effect of reducing the powers and liabilities of directors”1

What are some potential shareholder expectations regarding their investment?

  • limiting some decisions to only the shareholders e.g. hiring, termination, and compensation of the CEO; sale or wind down of the company; terms and conditions of future financing.
  • requiring shareholder approval of various documents: e.g. Board of directors mandate, board committee mandates, company policies, strategic plan, budget.
  • defining the process used by the shareholders to make the above decisions and approvals.
  • defining what information needs to be reported to shareholders at what time and in what format.
  • constraining the business e.g. limit geographical operations, which products and services may or may not be provided, pricing.
  • defining the process and constraints for shareholders to sell their equity.
  • defining the dispute resolution process. This process could result in a forced sale of shareholder equity.
  • describing the ways specific shareholders extract value from the company e.g. dividends; products and services; future sale of shareholder equity.
  • describing how shareholders will support the company e.g. introductions; financing guarantees.

The shareholders may have other expectations as well e.g. the purpose of the company

Some or all of the above expectations might be included in the USA.

How might the USA impact on value creation and value extraction?

I assume the company has a value creation plan and the shareholders have a value extraction plan.  The plans can be directed and constrained by shareholder expectations which are in the USA.

What are the risks of not documenting the shareholder expectations?

The short-term risk is a series of immediate disputes, which could harm both value creation and extraction.  For example, what if the shareholders don’t understand and agree that some shareholder will extract value through low-priced products and services while other shareholders extract value through dividends arising from high priced services to customers. How will management create and execute strategies when they are attempting to limit profits and grow profits at the exact same time?

The long-term risk is that shareholder expectations could change, especially when shareholders are companies.  The companies’ strategies for their investment could change and new executives representing the companies could have different expectations.

What are your next steps?

  • Shareholders should discuss and document their expectations regarding value creation and value extraction. Agreement and consensus are not always required.
  • The challenge is to figure out how to reconcile conflicting expectations. (e.g. one founding shareholder might want to stay with the company for the rest of her life.  Another founding shareholder might want to exit and sell her equity in 5 years for maximum value). This expectation setting process is carried out without lawyers and there is no legal document as an outcome.
  • Then lawyers review the shareholder expectations document. The lawyers point out potential issues and risks, which may result in further shareholder negotiations regarding expectations.  The shareholders decide among the legal options.
  • I assume that the USA will be one of the selected options. The lawyers must craft this.  The process of creating the legal USA may well results in more issues, requiring a negotiated update to the shareholder expectations document.
  • The lawyers will have to craft a dispute resolution process into the USA which is able to deal with future changes of shareholder expectations. Potential outcomes of dispute resolutions include: sale of the company, existing shareholders buying out some other shareholders.
  • The shareholder expectations document needs to reviewed on a regular basis and must be reviewed every time there is a potential new shareholder or change to an existing shareholder.


1 Barry Reiter, Bennett Jones LLP, Directors Duties in Canada, 5th edition, Page 95

Further reading

How can founders and investors create a shareholders agreement?

How profitable is angel investing? V2

What is the purpose of this article?

  • Share with you some fact-based profitability analysis from the U.S. angel community. I am not aware of similar detailed fact-based based analysis of the Canadian angel community.
  • Enable you to think about whether or not you want to make money as an angel investor and what you might have to do to make money.

You can download a PDF of this article from: How profitable is Angel Investing V2

There are three ways to look at angel investing profitability data.

  • As an overall asset class, considering a large number of angel investors.
  • As an individual angel group or angel fund.
  • The profitability of an individual angel investor, such as yourself.

You have the potential to make money as an angel investor if:

  • You or your co-investors have deep market knowledge of each portfolio company’s customers and market.
  • You devote significant time to due diligence.
  • You remain involved with the company post-initial financing.
  • You have the financial resources to create a diversified portfolio of at least 25 companies and to make follow-on investments.
  • You can wait 10 years to achieve a significant financial return.

How profitable has angel investing been in the period leading up to 2007?1

This study examined the results from of 1,137 exits ((acquisition, IPO, or company closure) from 539 angel investors in angel associations over a 20-year period, with most of the exits occurring after 2004. The average return was 27% (excluding out of pocket costs and assuming zero value for the investors’ time).

Due diligence had a large impact on investor capital returns.

  • Angels who spend less than 20 hours have an average return of 1.1X capital.
  • Angels who spend more than 20 hours have an average return of 5.9 X capital.
  • Angels who spend more than 40 hours have an average return of 7.1 X capital.

Investor knowledge of the portfolio company’s industry had a large impact on capital returns.

  • Investors with at least 14 years of relevant industry experience had double the capital returns of investors who did not have relevant industry experience.

Ongoing involvement with the portfolio company (e.g. coaching and mentoring, being the lead investor, serving on the advisory board or board of directors) has a large impact on investor returns.

  • Angels who interacted with the company twice a month achieved a 3.7X return.
  • Angels who interacted twice a year received a 1.3X return.
  • Interacting more than twice a month does not improve returns. The quality and type of interaction was more important than frequency.
  • 52% of all exits were at a loss.
  • 7% of the exits returned more than 10 times the money invested, and accounted for 75% of the total returns.
  • 39% of the investors had portfolios that lost money.
  • The top 10% of investors earned 50% of the returns.
  • 45% of the startups had no revenue when they received the angel investment.

How profitable has angel investing been in the period leading up to 2020? 2

The data scientists at AngelList analyzed 10,665 investor portfolios. The analysis showed that the realized and unrealized IRR for all of the investments is 15%. The 2007 study above only examined realized IRR.

The median IRR return for investors is heavily driven by the number of companies in their portfolio.

  • 50 company portfolios had a median IRR of about 10%; 11% of these investors lost money.
  • 20 company portfolios had a median IRR of about 7% ; 16% of these investors lost money.
  • 10 company portfolios had a median IRR of about 6% 32% of these investors lost money.
  • 1-5 company portfolios had a median IRR 0%.

What has been the performance of some individual angel funds in the U.S. in 2020?

The ACA (Angel Capital Association) Investor Insights report for 2020 shares insights from some large, long established U.S. angel groups.  My article does not name those groups.  You should refer to the report if you wish the names of the groups. The report is available to members of the ACA.

Angel group A analyzed 159 outcomes (exits and shutdowns) since 1997.

#1 A large portfolio is key to large returns

  • Equal sized investments in all the companies would have generated 4.8X return.
  • 3 of the 159 exits generated 74% of the total return.
  • Monte Carlo simulation showed that only 26% of investors with 5 company portfolios would have obtained 4.8X return
  • Even with a portfolio of 50 companies, there was only a 37% chance of achieving 4.8X return.

#2 Large returns require investors being able to wait 10 years.

  • It takes 4.5 years for investors to get their initial investment back. There are lots of failures in the first few years.
  • It takes 10 years to achieve 4.8X return. After 10 years, there is a very modest increase in returns.

Angel group B analyzed the return of their 27 members over 20 years.

  • A large portfolio is key to large returns. Investors with 25 company portfolios had 4.5 times the IRR return of investors with 1-4 company portfolios.

 Your next steps

  • Review your overall investment thesis e.g. what asset classes will you be investing in, why, and what expected returns (this includes volatility, and time to achieve returns)
  • Determine is angel investing would be a charitable activity or an asset class that is helping you achieve your overall investment thesis. Many angel investors are not interested in financial return, and their angel investments are not part of their financial return focused investment portfolio.
  • Define your angel investment thesis.
  • Determine if you have the skills, knowledge, and finances to create your own diversified portfolio or if you will invest with fund managers or if you will join a group of angel investors.
  • If you are investing with a fund manager you must do due diligence. It is key to analyze their cash returns over 10 years. I have come across many funds that include unrealized returns.  Unrealized returns are not cash in the bank. You will also have to assess their talent and processes.  If the funds returns are driven by only one exit, you have to determine if their overall results have been driven by luck or by knowledge, skills, experience, and processes.
  • If the fund manager is just starting their fund or has only been in operation for a few years, then you need to do more detailed due diligence, just as you would for any other startup. If you don’t have deep relevant experience in the fund industry, then you need some with that experience to work with you. Your due diligence focus will be on talent assessment and the fund’s investment thesis.
  • If you decide to invest via an angel investor group, you need to do due diligence. You need to asses whether the processes and talent will help you build and manage a profitable long-term portfolio. It is key to analyze the groups metrics and cash returns. One large U.S. angel group tracks 83 (yes 83) metrics for every investment made by a member. Some U.S. angel groups have detailed metrics regarding their members. If the group’s return is driven by one large exit, then you have to determine if their overall results have been driven by luck. Assess which members have deep relevant industry experience aligned with your angel investment thesis. Assess the angel group processes. If you don’t already have deep relevant angel investing experience, then you need help from those who have that experience.


1 Robert E. Wiltbank, PhD Willamette University, Warren Boeker, University of Washington, “Returns to Angel Investors in Groups, November 2007”

2 “How portfolio size affects early-stage venture returns”, Nigel Koh and Abfraham Othman, AngelList,

Further reading

Are you an angel investor or a gambler?

What is strategy and strategic planning? V2

What is the purpose of this article?

Enable founders, board directors, the C-Suite, and advisory board have a discussion about their company’s process for strategy and strategic planning.

You can download a PDF of this article from:  What is strategy and strategic planning V2

How do you define: strategy, strategic planning, and the strategic plan?

  • What is strategy? The facts, assumptions, and analysis of what successful future scenarios for the company could look like. A successful future means growth in value.  Value of the company and value for key members of the ecosystem.
  • What is strategic planning? The process to engage key members of the company’s current and future ecosystem members in order to discover a potentially implementable strategy.
  • What is the strategic plan? The strategic plan should be called the value creation plan. The strategic plan communicates the actions necessary to grow value and reach the successful future.

What are the questions the strategy must answer?

The facts, assumptions, and analysis of  what successful future scenarios for the company could look like. There are 7 sets of questions to this:

  • Who are the current and future members of the company’s ecosystem that are critical to the company’s success?
  • What is the vision for the future company?  How will the ecosystem perceive the company? Why will those critical ecosystem members enable the company’s success?  What metrics will those members use to assess value and success?
  • Who will be your future cash-paying customers? Why will they buy from your rather than the competition?  How are their problems and needs being better addressed by your solution than the competition? How are you enabling your cash-paying customers to achieve more value?  Why are customers buying from the competition rather than you? How many cash-paying customers will there be? What will be the market size. You may be in different markets with different customers. Customer needs will change and there will be new unmet needs. What will be the customers’ ecosystem? (e.g. Technology trends, demographics, politics, regulation, etc.)
  • What will customers perceive as the competitively differentiated value proposition? What will be the customer experience? How will customers perceive that your company meets their needs better than the competition?
  • Who will be your future competitors? What improved products and services will they be offering? Old competitors will likely disappear and new competitors emerge. (e.g. New ventures, entrants from adjacent markets). What will be the competitors’ ecosystem?
  • What are the characteristics of the future talent requirement? Board of Directors? Advisory Board? C-Suite? Coaches? Employees? Advisors and Consultants? Often skills and capabilities that brought the company to its current situation are not the skills and capabilities that are required for future success.
  • Is it clear what the future value of the company will be to key members of the ecosystem (e.g. shareholders, employees, and society) and how that value compares to the current situation?

Good analysis done by good leaders with good judgement often produces poor strategic decisions.1

A strategic decision is on of those relative rate major decisions that has a major business impact. E.g. bet-the-business investment; major M&A; major new product/service launch; business transformation’ etc. A McKinsey survey of 2,207 executives regarding the quality of their 1,048 strategic decisions revealed that:

  • Only 28% thought good strategic decisions were frequent;
  • 12% thought good strategic decisions were infrequent; and
  • 60% thought bad strategic decisions were as frequent as good strategic decisions.

What has the greatest impact on company performance? McKinsey found that it was the quality of the decision-making process. The % of company performance improvement due to:

  • Quality of the decision-making process: 53%
  • Industry/company characteristics: (e.g. consumer tastes, implementation resource capability) 39%
  • Quality and detail of analysis: 8%

The strategic decision-making process is much different from the normal day-to-day decision making.

What does the strategic planning process need to consider?

Strategic Planning: The process to engage key members of the company’s current and future ecosystem members in order to discover a potentially implementable strategy. Too often I’ve met companies where the consultants have said “We developed a great strategy but the company could not implement.” A strategy that cannot be implemented is not a great strategy. Strategic planning is a learning, and unlearning, process.

There are 8 sets of questions around strategic planning:

  • What is the purpose of your company?
  • Do you have the right talent involved in strategic planning? The decision makers must have a value growth mindset and capabilities in value creation.
  • What the process for answering the 6 strategy questions outlined above?
  • How will you get input from key members of your company’s ecosystem?
  • How will you get support form key members of your company’s ecosystem? E.g employees
  • What will be the indicators you are constantly monitoring to identify if immediate changes in your strategy plan are required due to changes in: customers, competitors, and the ecosystem. In today’s world, there is unlimited capital available to a competitor whose solution customers want to open up their wallet to.  Those competitors can rapidly grow in a few years and destroy your company.
  • Who is accountable for achieving the measurable results? g external customer metrics (How many potential customers have a problem/need for which they are willing and able to pay for your solution? How do the customers perceive they are getting more value from you than from the competition?) internal customer metrics (customer acquisition costs? customer lifetime profitability? By channel, partner, customer segment, and cohort?).
  • Does the strategic planning process result in the company’s value creation plan?

What are your next steps?

  • Document your current process for creating and maintaining your strategy and strategic plan.
  • Does your current process address the above questions and challenges?
  • What changes do you need to make to your process and the talent involved in the process. If talent cannot change themselves or be coachable, then replace the talent.
  • We live in turbulent and rapidly changing times. The strategy and strategic plan may need to change at any instant because facts and assumptions have changed, making decisions and plans obsolete. Every board meeting must begin with a discussion regarding the facts, assumptions, and analysis underlying the strategy and the strategic plan.  The CEO must have a similar discussion at the start of every meeting with her executive committee.


1 “The case for behavioural strategy”, McKinsey Quarterly 2010, Number 2

 Further reading

What is the purpose of your company?

How do you grow your company’s value?

Traditional strategic planning dooms companies to failure

“Does your board really add value to strategy?”, Professor Dieder Cossin and Estrelle Metayer, IMD Global Board Center

What is the difference between strategy and tactics?