Strategy+Team=Success

I’m a big fan of Fred Wilson.
He’s a highly regarded NYC based venture capitalist who writes a fascinating blog on investing and technology.
This time of year, he’s spending his time in board meetings planning for the upcoming year.
When you are involved in a successful enterprise, board meetings are exciting. It’s fun to talk about growth and expanding market share. But when you are in struggling enterprise, board meetings can be very challenging and often stressful.
Wilson believes the keys to success are having a strategy and building a winning team. Here’s what he has to say:
“You have to get the strategy right and you have to have a team that can execute it without your day to day involvement. The CEOs that I work with that are struggling are usually running into issues with their team and/or their strategy. And the CEOs that I work with that are doing great generally have gotten the strategy set and have built a strong executive team underneath them.
This sounds so simple. But it is not.
Most of the companies I work with didn’t really start out with a strategy. They started out with an idea that turned into a great product that found a fit with a market. And they jumped on that and used it to build a company. Most of them wake up at some point and realize that a single product in a single market is not a strategy and they need to come up with a plan to get a lot bigger and build a sustainable and defensible business. I like to think that this is one place where a good investor group can help. If we are doing our job, we push our portfolio companies to work on their long term strategy and refine it to the point where it makes sense and is executable. But an investor group cannot give a company a strategy. It has to come from the founder/CEO and a small group of senior leaders. The smaller the group that is working on strategy, the better. Strategy is not something that can be done by committee.
The second thing, building an executive team that can execute the plan without day to day involvement of the CEO, is even harder. Most of the companies I work with go through a lot of hiring mistakes on the way to building this team. Some hire too junior. Some hire too senior. Some hire bad cultural fits. Some hire people that are nothing but cultural fit. And an investor or investor group can help with this but I believe that founders/CEOs need to learn how to do this themselves and make these mistakes. The best thing an investor group can do is to help a founder/CEO to understand when they have the wrong person in the job. Or help them understand that more quickly.
These are both areas where experience is huge. The CEOs I work with who have done the job multiple times get these two things right much more quickly. But even they can take a year or two to get these right. First time CEOs often take three or four years to get these things right. But sticking with founders who are first time CEOs through this process is usually worth it because they have a connection to the initial vision and mission that a hired CEO has a hard time replicating. There is not a good rule of thumb on this issue (who should run the company). Facts and circumstances on the ground will generally determine how that should go.

My final point on this is that once you have the strategy and team locked down, you should step back and let the machine do its thing. I like to say that CEOs should do only three things; recruit and retain the team, build and evolve the long term strategy and communicate it effectively and broadly in the organization and externally, and make sure the company doesn’t run out of money. When those are the only things you are doing, you are doing the job right. Very few CEOs get to focus on only these three things all of the time. Things break and you have to fix them. But when the machine is working and you can step back and watch it hum, it is a thing of beauty.”
Amen.
This blog likes to focus on cities and there is a real parallel between what Wilson is talking about and building a successful community. And there are some differences.
First, strategy can be substituted for a community vision and while for business Wilson recommends a small group be involved in crafting strategy, in a city it helps if you have as many stakeholders involved as possible. It’s the job of elected leadership to prioritize, hone and drive the vision and it’s the job of city staff to implement in a timely and efficient manner.
But cities get in trouble when there is no strategy, vision or plan. And they get in trouble when egotistical leaders decide to keep their own counsel and cut themselves off from input or debate.
They also get in trouble when they decide to micromanage and delve into the day to day operations of the city. If you find that you are doing this, you need to stop. If you find that you need to do this because your staff can’t or won’t execute, you need to get new staff. But elected officials need to stay in their policymaking box (which is plenty big) and allow staff to do their jobs. Ideally, you should try to create a culture of experimentation and innovation not fear.
If staff can feel confident enough to think outside the box and solve problems legally, ethically and efficiently you will succeed. If they feel bullied, micromanaged and or afraid to make a mistake you have created a culture that will fail to solve problems or seize opportunities. Your best talent will flee, you will not be able to attract top tier talent and you will turn lemonade into a lemon.
I happen to believe in outcomes over process. That does not mean that process is not important or that you shouldn’t have a process. But it does mean that outcomes are more important— as long as you act legally, ethically and morally.
It shouldn’t take three weeks to type a basic building permit. It shouldn’t take a year to approve a mixed use development. It shouldn’t require an act of Congress or a deity to get a parking agreement and or a developer agreement. If it does, you got a problem.
Strategy and team; you need them both. One doesn’t work without the other. And if you are deficient with either or both, you have major problems and you cannot succeed.

Keepers of the Flame

Jan Gehl is an award winning Danish architect who has worked on high profile projects all over the world.
Recently, he visited the Harvard Design School to discuss the role of politics and leadership in driving improvement in cities.
In his experience, he believes “the personal factor is very strong in bringing about transformative urban changes”.
Gehl’s new book New City Spaces talks about nine cities that have really turned things around, and in nearly all of the cases, it started with some centrally placed person or torchbearer who had a vision. It might have been the mayor of Curitiba, the longstanding director of urban design in Melbourne, or the mayor in Strasbourg. In Copenhagen, the city architect, city engineer, and mayor worked together, and in Portland it was more or less the Greens winning the election in 1968 that brought significant change, according to Gehl.
“It (transformative changes) could come from the bottom or above, but very seldom did it grow out of the day-to-day administration of the cities. It was often a force from the outside, or a new officer or a new politician.”
Interesting and I have no doubt that Gehl is correct in his diagnosis of the cities he has studied.
But I would argue that another model—outside the hero mayor or architect narrative—is citizen driven planning or visioning. Delray used this transformational model effectively from the late 80s until the mid 2000s for plans relating to the downtown, neighborhoods, culture, education and parks.
It works.
In many cases, change is driven by a threat or by conditions that are so poor, they drive people to organize and push for reform. In Delray’s case, the threat was a plan by the Florida Department of Transportation to widen Atlantic Avenue to facilitate hurricane evacuation. While this may not be the best week to argue against that notion, it was widely believed that if FDOT was successful we would have lost our downtown forever. Instead of being a narrow, pedestrian friendly street promoting slow traffic, the avenue would have been a highway—good for evacuation bad for urbanism.
I’m hoping the new effort relating to the city’s update of its Comprehensive Plan is more like an old school visioning exercise than a top down exercise designed to check a box for the sake of optics because community visioning is critically important and so is the Comp Plan.
Gehl is correct when he notes that transformation rarely grows out of day- to -day administration.
Same goes for business.
When you’re leading or running a city or a business, you really have two considerations: the day to day and the future. You have to consider both or you are doomed to failure or disruption.
So yes when a citizen calls to complain about a tree branch you need to respond. But, you also should be thinking about your tree canopy and whether you have planned your open spaces well enough. Leadership requires taking care of the present and planning for the future.
In a council-manager form of government, in which the mayor’s position is supposed to be strictly policymaking and part-time (the part-time part is a fallacy, trust me), you can’t wait for a hero with a vision to come to rescue. It’s up to the citizens to take responsibility, but leadership is critical. The best leaders seek input, constantly engage, try their best to raise the level of conversation and once adopted become the chief evangelists and defenders of the vision.
And believe me; the vision will need defending because change is never easy nor universally accepted especially if your vision is ambitious and not boring or incremental.
Every city aspires to be a great place to live, work and play—but the devil as they say is in the details. Vibrancy requires activity and public spaces may need to be activated.
Change while often resisted is also inevitable. So you can count on your vision being challenged on a regular basis. The best leaders are guardians of the flame. If they resist the urge to cave when the critics emerge and trust in the people’s vision your vision will gain traction and soar. But if they capitulate—the vision will die and along with it any chance of meaningful change. Oh and you’ll lose the trust of citizens who helped to forge the vision and counted on you—the elected leader—to ensure it moves forward.
That’s a high price to pay.