How adopting a start-up mentality can drive your strategy, especially in uncertain times.
by Ashish Toshniwal and Kelly Kwak
Uncertainty is the new status quo. The global community, individuals and companies alike, are wading through uncharted waters with very little historical context to rely on. Thus far, we’ve seen the devastating impacts of grinding the economy to a halt — the stock market feels like a roller coaster ride, oil prices have been volatile, and companies across the spectrum are scrambling to stay afloat and evolve in the time of COVID.
Add to that a series of powerful worldwide protests against racism, police brutality and white supremacy, rightfully causing brands and individuals alike to reflect on their privilege, and how to build a better world.
Now, more than ever, companies are being challenged to test their abilities to pivot and action quickly.
There is a fundamental reason behind the startup culture shunning
corporate culture in favor of learn-fast thinking.
Startups need to pivot quickly to compete. They don’t have the luxury of spending time mired in “analysis paralysis.” Time is literally
the difference between growth and being open for business the next quarter.
These scrappy players pick a direction, test, learn and iterate. Agile,
experimentation-based methodology has proven effective many times, and many returns over. Think Netflix, Basecamp, Credit Karma (a former YML client), and Amazon, to name a few.
The key questions are: does the learn-fast strategy always work? And does it change the face of strategy across industries and business scales?
Out with the old
We’ve all been there. Your company unveils its new strategy that’s going to position the company for unbelievable success and growth. It’s delivered with much fanfare in the form of a ‘vision statement’ or three strategic pillars or maybe even an inspirational video. The strategy team pats themselves on the back for getting executive and board level approval after arduous months of research and work. Everyone gears up for the subsequent months of cross functional planning to hammer out the perfect roadmap.
Before you know it, you’ve just lost six months researching and planning for your three year strategy — now a 2.5 year strategy. Poof.
At this point it’s possible your strategy has gone stale, or the motivation to push forward is gone. Who has the stamina to align the rest of the organization to execute? “The strategy-to-execution gap is an enduring problem with no easy solution” writes Nathan Wiita and Orla Leonard for Harvard Business Review.
That’s not to say, scrap having a strategy altogether.
As the Japanese proverb goes, ‘Vision without action is a daydream. Action without vision is a nightmare.’ Having a vision and strategic focus is invaluable. But the process of finding that focus is evolving.
Gone are the days of strategists conducting months of studies to unveil an untested, unproven strategy that is hard to bring to life. Case in point: GE Digital.
GE started its digital transformation journey in 2011. By 2015, it had invested billions, hired thousands and established GE Digital. However, the bloated strategy was pulled apart by too many competing agendas and execution subsequently suffered. GE suffered punishing drops in stock price which led to the subsequent exit of CEO Jeff Immelt. GE announced, late 2018, that it would be selling parts of GE Digital to ServiceMax.
In the new world of COVID, where entire industries — dining, travel, entertainment — have had to make massive business model pivots in order to survive - restaurants as an example - this pace of strategy development feels like a luxury and a relic of the past.
As a strategist or leader, ask yourself if you feel your organization is stuck. Do you consistently hear the feedback, “we lack a strategy,” “I don’t understand our strategy,” “why isn’t our strategy working?”
Has your organization poured millions in investment towards a [insert buzz word like “digital”] transformation and have yet to realize significant returns? The good news is, you’re in good company - 70% of transformations fail.
The bad news is, you don’t want to be part of that 70%. To succeed, strategy and strategists need to be fluid. This is the new, potentially uncomfortable, world.
A strategy is a direction and not a blueprint.
In the old world of strategy, your strategists are captains and strategies are the cruise ships. The ship is built to anticipate and plow through turbulent weather with the captain tracking weather patterns from miles away to make day-to-day decisions.
In the new world, strategists are sailors and strategies are sailboats. The sailor anticipates changing winds and reacts in the face of minute to minute sailing conditions to steer the ship on its intended course.
The role of the strategist in making day-to-day, week-to-week, actionable decisions is a crucial ingredient to success. As strategists we need to move from being research-obsessed to results-focused; silo-ed to operationally imbedded; waterfall to agile.
Months of market and customer research cannot give you the same insights as in-market product testing. The key is finding the right balance of research and in-market testing to ensure you’re consistently on the right course.
Uber’s chief of product, Manik Gupta, wrote to employees, “We will focus on fewer projects with more direct business impact.” Uber deliberately relies less on user research for tactical features and instead relies more on experimentation.
Experimentation is the backbone of strategy
Starting any project with validating a new concept is the bread and butter of traditional strategy and also how strategists earn the taunt of “analysis paralysis.” However, focusing on experimentation means recognizing specific considerations to strategy.
- You’re formulating your problem statement and hypotheses using past data, however, you’re validating your problem statement, hypotheses, customer need and demand through experimentation tactics such as qualitative and quantitative studies ranging from shop alongs, surveys and individual interviews to diaries (“Painted door” experiments).
- View this phase as a way to ensure you’re clearly articulating objectives that make sense. Use this as a gut check vs. hunt for empirical evidence.
- If you already know your customer, shorten the cycle of customer research by focusing net new research activities on answering key unanswered questions. Find the shortest path to do this with tactics like painted door experiments.
- As a rule of thumb try to find ways to complete these activities in 4 - 6 weeks. If you go over 4 - 6 weeks, ask yourself if you’re mired in analysis paralysis.
- Lastly, but most importantly, try to get in front of your customer. Do some field research with a prototype in hand to truly get useful feedback.
Optimizing existing experiences offer strategists an opportunity to marry strategy with execution. If you’re not focused here, PIVOT. Here's how:
- Strategy isn’t a once and done exercise. It’s infused in execution and should live into maintenance and optimization.
- Your strategy must be informed by further experimentation that helps you consistently grow and improve your experience.
- Optimizing existing experiences is where strategists should focus: it’s the intersection, the place to marry strategy with execution.
- If you’re not there, PIVOT.
- Get cozy with your analytics and business intelligence team, and build out your experimentation capabilities. Employing a robust optimization program that enables and actions upon A/B and multivariate testing insights is the key to consistent improvement.
Agile strategy in action
YML recently brought this strategy to life recently with TaxAct, America’s #2 online tax filing service. Our challenge was simple: steal market share from the leader. TaxAct needed to impact their conversion rate without affecting revenue; driving better conversion rates for an average of 300k visitors every single day during the 2019 tax season.
The real challenge, though, was that tax season is only three months long. We needed to extract as much value as possible in that short timeframe.
Our strategy incorporated improved brand design, but more importantly a range of experimentation and iteration. Lessons from product analytics were embedded into the new experience by setting up personalization to target audience segments based on characteristics, seasonality and device dimensions.
YML meticulously designed a roadmap for A/B testing across the tax season both from the client side, as well as server-side experiments ranging from UI (copy, the order of the modules), to price and tier changes.
For context, most iterative experiments like this occur over many months or even years, reviewing performance and making the appropriate changes based on the data. But YML didn’t have that kind of time. Our strategy integrated fresh versions of the website to users every four hours, for three weeks straight.
YML drove up conversions by 22% and achieved unprecedented levels of performance. This in comparison to the previous year was a 400% increase.
Strategy informed by experimentation requires meticulousness, organization, and a constant eye on the objectives. Substantial growth potential can be unlocked by systematically learning and acting upon a strategy - meeting it head on and charting your course.
About the Authors
Kelly Kwak is the Director of Strategy at YML. Shehas over 10 years of experience building impactful strategies for clients ranging from mid-cap to Fortune 50 companies. Her experience ranges from pure business strategy to digital product strategy. Having had both consulting and agency experience, she is able to understand the real needs of her clients and develop solutions that matter. She has worked on consumer-facing products at startups like Kabbage and Fortune 50 companies like Lowe's.
Ashish Toshniwal is the CEO and co-founder of YML. An expert in mobile strategy, product design, and technology. Ashish has been featured on CNBC, ABC News, Forbes, and Adweek as a leader in technology, and has his very own TED talk about finding purpose in your work. He has led YML to be recognized by The Wall Street Journal as “One of the most innovative companies in Silicon Valley.”