OKRs didn’t work for strategic planning at the startup ShearShare, an app for salon and barbershop booth rentals. Neither did KPIs, or simply using Excel to chart company goals.
“It just seemed like every time we tried to make that shift, there was like a hurdle that we were getting over, and I think it was just mental,” said Courtney Caldwell, co-founder and COO of ShearShare.
Then Courtney and her co-founder husband Tye Caldwell heard about the Rockefeller approach to strategic planning, and everything clicked. Based on the book, Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm, companies that use this approach to strategic planning focus on three principles for success developed by business magnate John D. Rockefeller: priorities, data and rhythm. These are then used to create a one-page strategic plan.
What Is Strategic Planning?
“This immediately resonated with the entire team,” Courtney Caldwell said. “Our leadership team loved it, so it was easier for them to push the message down to the frontlines of the organization, and it’s something that has stuck with us.”
ShearShare’s leadership team gets together quarterly for a two-day retreat to set the company’s priorities and create the one-page strategic plan for the upcoming quarter. The plan outlines financial targets, along with key initiatives and priorities they call their “big rocks.”
The leadership team then brings back the plan back to the department leaders who discuss it with their direct reports and come up with quarterly team goals that are presented back to company leadership for final approval.
“It’s not something that comes down from just the executive team or from the founders,” Courtney said. “It is first the individual being able to see where the leadership for ShearShare has set the terms for this next quarter, for the next 90 days, and then they say, ‘Okay, cool, then these are the things that I’m going to commit to doing,’ giving themselves a couple of stretch goals as well.”
Strategic planning can take a variety of forms, and different companies will require different approaches for success. Here tech leaders share their advice on evaluating a company’s strategic planning processes.
What Are Examples of Strategic Planning Approaches?
Before founding Uplift Labs, an AI-driven performance technology company, Sukemasa Kabayama worked at large international companies, including LEGO, Apple and Tesla, who all approached strategic planning in different ways.
“Each company has a different measurement system, so depending on what you’re being measured against, that helps inform the type of strategies,” Kabayama said.
Glossary of Strategic Planning Acronyms
- OKR - objectives and key results. A goal setting framework for tracking outcomes based on specific measurements of progress.
- KPI - key performance indicator. A performance metric around the success of an objective over time.
- QBR - quarterly business review. A meeting where stakeholders discuss business performance for the previous quarter.
For example, at LEGO, Kabayama said his work would be measured by quarterly results, and ultimately an annual result, with monthly check-ins. At Apple, it looked like weekly check-ins and measurements based on quarterly results for the publicly traded company.
Being a founder of a startup has required Kabayama to approach strategic planning with more flexibility to adapt to the challenges that come with running a new company, but he and his co-founders, along with the company’s advisory board, focus strategic planning on a mix of short-term and medium- or long-term goals.
“If you don’t have your North Star, and you don’t have some semblance of strategy … how do you know where you’re going? How do you measure where you should be?” Kabayama said.
Digital product consultancy Dialexa works with clients to approach strategic planning from a product thinking mindset, versus project thinking. Product thinking requires aligning on a vision for the product and strategizing, testing and researching what company initiatives will promote the success of the product, said Jonathan Williams, partner and Chicago market head at Dialexa.
“The measures of success of a project are usually just time and budget. If you do it on time and within budget, the project was successful,” Williams said. “What’s different with product thinking, however, is you’re looking at this as a living, breathing entity almost. There’s no stop or start.”
“I think it’s a mistake to just do big bang strategic planning.”
Quarterly business reviews can be a helpful strategic planning tool with this approach, Williams said. QBRs allow a company to track how it’s performing toward strategic goals and evaluate market conditions.
“I think it’s a mistake to just do big bang strategic planning,” Williams said. “You should have those aspirational strategic plans, and then as you build that thing out, you’re breaking it down by year. You’re breaking those years down by quarters, and in each quarter, you’re having a tactical plan.”
Other popular strategic planning methods include using OKRs and KPIs. The OKR model was popularized by Google and Intel and involves identifying quarterly objectives (essentially outcomes) for the business and key results, which are specific measures of progress toward those objectives. The KRs are then broken down into to-dos that will help achieve those results.
KPIs, key performance indicators, are used to measure progress toward strategic objectives. KPIs should be measurable with data and have a targeted result within a certain time period. This can be anything from monthly website traffic to growth in revenue or the employee churn rate.
How to Measure Outcomes of Strategic Planning
The team at Realworld, an app focused on simplifying adulthood tasks, doesn’t get too bogged down with putting in place a bunch of processes around strategic planning. Work changes too frequently as an early-stage startup, and quarterly plans can feel restricting if the company needs to pivot quickly, said Genevieve Bellaire, CEO and founder of Realworld.
“I think the biggest thing that I’ve realized is that, as a startup, it’s very hard to plan years in advance,” Bellaire said. “You can have the end goal in mind of this is what we want to do as a company, and here’s what the product looks like and our business model and how we grow and build our organization. But you learn so much every step of the way that the three months, six months, nine months, changes dramatically over time.”
The team does think about broad strategic planning about every six months and uses Notion to track its objectives, but there aren’t a lot of formal KPI or OKR processes at the company. Success is measured by looking at the team’s accomplishments and numbers, Bellaire said. Are the metrics for the app where they want them to be? Are projects being completed successfully? Is the app working as desired?
Courtney Caldwell said one measure of success for ShearShare is how well the individual team members can communicate about the company’s current objectives and articulate how their work fits into them. The company leaders also evaluate what “blockers” are preventing progress on quarterly goals and what can be done to address them.
“It just ties back into everyone being able to take a look at their one page strategic plan and see themselves in it because towards the end of that plan, it shows your individual accountability methods,” she said. “How are you and your day-to-day goals tying back to the big rocks in the organization?”
“Unless there is accountability tied to that strategic planning and good check and balance, that exercise goes nowhere.”
With product thinking in mind, Williams said measures of success for strategic planning will revolve less around time and budget and more around measuring outcomes like revenue, headcount growth and new market entrants.
As the CEO and founder of DigitalWill.com and CircleIt, a generational platform helping people create customizable cards and personalized digital memories for their loved ones, Art Shaikh spends 80 percent of his time thinking about strategic plans at least three months out.
“If I don’t know what are the things I need to deliver for the next quarter, and the next six months, we could run out of money,” Shaikh said. “We look at the data. Data does not lie.”
Working for large tech companies in the past, Shaikh said strategic planning looked more like having three-, five- and 10-year goals presented during quarterly meetings. “That culture can become very suffocating because you’re just pushing PowerPoint documents out. It’s just about, ‘How can I look good in that meeting?’ What happens after that?” Shaikh said. “Unless there is accountability tied to that strategic planning and good check and balance, that exercise goes nowhere.”
With running startups, the companies’ focuses might change every three months to be positioned for the next round of funding or stage of the company, Shaikh said. Every month, Shaikh is also in touch with his advisory board to evaluate where metrics are on- or off-track and what pivots need to be made.
“Without strategy, you’re rudderless, so having that strategic rudder gets you to your final destination,” Kabayama said.
What Makes a Strategic Plan Successful?
With a 10-person team, everyone is involved with strategic planning at Realworld, providing their input on decisions before leadership signs off on direction. “We’re a very transparent organization, and my leadership style has very much been, get buy-in from everybody else and servant-oriented leadership,” Bellaire said.
The company will have working sessions to think about strategic planning and get feedback from staff members based upon their functions within the business, Bellaire said.
At Uplift Labs, large strategic shifts are communicated in real-time to everybody, Kabayama said. “I think it’s also important to have them be able to digest it a little bit but also to be transparent and ask questions,” he said.
“You need to have buy-in from the entire organization, but you need leadership to make it safe for people to be transparent and honest.”
Even for large companies, Williams encourages organizations to think about how frontline, customer-facing employees can help improve processes and strategize about the future success of the organization.
“You need to have buy-in from the entire organization, but you need leadership to make it safe for people to be transparent and honest,” Williams said. “You need to put in place practices and tools that are ultimately going to empower the folks that are closest to the customers and closest to them to be able to make decisions that advance the organization towards its larger goals.”
Bellaire encourages founders to tap into the expertise of board members or founder friends for an outside perspective on challenges or strategizing. Kabayama and Shaikh echo the importance of having a dependable advisory board too.
“I can’t stress the importance of having a very strong advisory board or people you just trust that you can go to when you shouldn’t think that you know all the answers,” Kabayama said.
Courtney Caldwell emphasized that organizations need a core set of beliefs and values to ground strategic planning — and be sure to recruit staff that can fill any weaknesses or gaps needed to achieve the company’s vision, she said.
“We tried so many different things, and you can get frustrated if the OKRs don’t work and the KPIs don’t work, but figure out what works for your individual team,” she said.