Being Strategic - What's Not Strategic?
Knowing what's not strategic can help identify what is.
“You need to be more strategic”
It’s feedback a lot of people receive as they try to move from middle management to the executive level. Yet, few can define what it actually means or entails.
Is it an innate talent, or some magic “X”-factor?
No. Being strategic can be taught and learned. It requires learning new ways of approaching problems, changing your mindset, and a bit of unlearning of the things that got us to where we are now. It requires picking up a few hard-skills and learning some very hard soft-skills.
Whether it’s analyzing problems, speaking the language of the business, or improving your bearing - the skills of being strategic can be taught.
Misconceptions on strategy
One person’s strategy is another person’s tactics.
When you’re in a lower role, it feels that anything forward-looking or in the future is strategic. A lot of people conflate something being in the future as something strategic.
They start discussing details that aren’t actually strategic, which inevitably results in the people who do think strategically wondering why they are wasting their time with tactical implementation details that ultimately don’t matter directionally.
Middle management doesn’t prepare you well to be strategic. To do that, it requires thinking differently than you did as a manager. To learn what strategy is, you need to learn what strategy isn’t.
Chasing the next target is rarely strategic.
A lot of managers I talk to point at their achievement of their KPI as an example of having successfully been strategic.
Not quite.
It’s not strategic to improve a conversion funnel by 10% or user retention by 3%. These are KPIs and goals: incremental improvements. Actually executing the improvements to reach these is tactics, not strategy.
By the time you have a “next target” to look at, the strategy discussion has already been done - you probably weren’t even in the room.
If you want to really be strategic: think deeper - why is this target your target? What were the tradeoffs? You still need to execute on your target, obviously - but showing signs of deeper thinking beyond it is a good first step if you’re trying to become more strategic.
Doing what the competitors are doing is rarely strategic
Competitor analysis is important, but it’s not strategic. If you’re always playing “follow the leader”, that means they control the initiative. While your competitor is leading the charge, you’re busy playing catch-up.
Instead, you need to look at the things that will allow you to differentiate. That might mean not doing what your competitors are doing. There’s a set of table-stakes capabilities your users might need, but beyond that - what makes your offering unique?
I once developed a product that ensured the latest-and-greatest data was available from another system of record by looking across users and providing updates when records changed. The feature itself was simple, but it was hugely beneficial to all of the users who interacted with that record - over 80% of our users started using it on day one and continued using it.
The feature was copied just a few weeks later in a shiny “me too!” announcement by one of our competitors.
The problem? It would never work for them.
Our competitor was copying what we did, but didn’t understand why it worked for us. Our offering worked precisely because of our scale of usage. The usage the competitor had simply wasn’t even a fraction of where they needed to be to make the offering effective. As a result, the competitor’s feature was essentially useless to their users, even if it was built in exactly the same manner and functioned exactly the same way.
Doing only what you can do or focusing entirely on “what if’s” is rarely strategic
You simultaneously have to consider what your current capabilities are as well as what new capabilities you can build organizationally.
If you think solely in terms of what your company can currently do, you will dismiss many strategic, valuable opportunities. The market will eventually move beyond you, and you’ll just become a waning incumbent.
Likewise, if you think solely about the future and potential, you may not pay enough attention to whether it’s realistic to achieve. Your execution will suffer and you’ll forever be chasing ideas that don’t pan out at the expense of your core offerings.
It requires a balance and holding two conflicting concepts in your head, simultaneously.
I once joined a local credit card processor that sold and managed physical point of sale machines for merchants in the local area. Up until that point, the company had no capability to be digital - no in-house skills, no functional products.
Their first attempt with contractors failed miserably - 2 years later and they didn’t even a functional MVP.
They had brought me on to take them digital - to build out an online payment processing and donation management product that they could sell to non-profit organizations - a hybrid of GoFundMe and Stripe.
This was not in their wheelhouse at all, yet this strategic decision opened up a world of opportunities, leading to partnerships with major non-profit organizations that later processed and managed tens of millions of dollars through the system I built for thousands of organizations.
If they had stuck to just what they could do, they would’ve only ever done credit card processing for small shops locally. Instead, they thought strategically and looked forward beyond their current limitations, letting them expand beyond just the local physical market.
Focusing purely on growth is rarely strategic
A lot of product managers coming from a growth background get frazzled when they’re facing the prospect of working on something without a measurable outcome or on something that’s particularly small.
They declare “this isn’t strategically valuable” as an excuse to not work on it, just because it doesn’t have a KPI or measurable outcome.
They confuse growth work with strategy work, turning down a prime opportunity to get into work that gets them even closer to the strategy: positioning.
Positioning is about setting up the organization to capture a future opportunity. It usually involves work done to create a new capability, or expand in some area without a clear ROI. In some cases it might seem wasteful, but strategic positioning opens up worlds of opportunity.
There might not be some number that goes up. But, if it prepares the organization to participate in a new market, or differentiate in a capability, or mitigate an existential risk, then it may have a probability of being the most valuable thing.
If it doesn’t - then the effort could be considered wasted. However, not all bets work out. If you can spend a million dollars to have a 10% chance of success in a new market that might yield $10 billion, then the expected value of that bet is clear - spend the million.
I once worked at a company that was hyper-focused on fixing their acquisition. They were a sales-led company, and their core competency was outbound sales to individual customers and users. They invested hundreds of head-count into their Sales organization, trying to increase their acquisition by throwing money at it.
The problem was, they had a leaky bucket. Their customer retention rate was below their acquisition rate, leading to their massive sales investment not actually improving their bottom line. They were losing customers faster than they were acquiring them.
What they really needed was improvements to retention. As a skunkworks project, I spearheaded development of a new technical and product capability that allowed them to achieve better economies of scale by moving upmarket, allowing retention to be done for groups of hundreds of customers at a time at the Enterprise level. Sales efforts could then be focused on acquisition without worrying about retention.
There wasn’t a KPI I was targeting, or a specific increment in a goal I was trying to achieve. In fact, completion of the project wouldn’t have pushed forward any metrics - acquisition, retention, or revenue. Instead, I was trying to strategically position the company so that it could enable a new way of viewing and tracking customers that would allow improvements to all of them.
The bucket was fixed.
Immediate-term focus is rarely strategic
Many people on teams over-index on their immediate work and time-frames.
When the work shifts, they feel a whiplash. They think the strategy has shifted, raising questions and concerns of “why did we change our strategy?” when the strategy hadn’t changed at all.
This is primarily due to the time horizon on which they are focusing.
Suppose I invest a team for the next 3 months in achieving growth in a business line that’s doomed to fail. The developers on that team may view that as their highest priority for the next 3 months, working hard on successfully improving the KPI. Then, 6 months later, when we sunset that business, they may view their work wasted and feel a sense of whiplash.
Yet, they hadn’t considered that the time value of the improvements they made may have been strategically valuable for that time period. If they focus only on the short-term, they’ll see only the whiplash. If they focus on the longer time horizon and broaden their lens, they’ll realize that the improved growth allowed capture of value that was then leveraged in another way.
It comes from a place of frustration - a lack of clarity as to the rationale of the change and the reason for it. However, I’ve also found that even if the rationale is clearly explained and the reason provided even if entirely self-evident, the comment still arises.
Always winning is rarely strategic
In truly strategic decisions, there might not be any winning - only trading one major loss for another. For new leaders looking for the win-win solution, it’s a hard thing to mentally understand.
The fact is, taking win-win solutions all the time may result in mediocrity over a longer time horizon.
As an illustrative example, let’s suppose you have a team that is performing acceptably, but any attempt to push them to higher performance will result in increased performance at the cost of increased attrition.
The win-win here might be to gradually improve the team’s performance, only pushing slightly to not affect attrition. You get better outcomes over time, and you retain your team. Win-win, right?
Not so fast.
You see, while you were choosing the win-win, your competitor made the different choice to push their team, hard. Their attrition increased by 20%, but they managed to get key differentiators completed faster than your company. The market took notice, and your company started losing customers. In three years, you end up with a 80% revenue decrease and you have to lay off 70% of your team, anyways. You competitor, on the other hand, captured the entire market, managed to give raises to their team, and grew 300%, all at the same time.
In that hypothetical world - did you really win? You kept your team happy, and you can say you “did right by your team”, but you didn’t - not really. They don’t have a company go to back to.
Some strategic decisions are about choosing intentionally bad outcomes to gain the benefits. Sometimes, your most strategic move reduces your profit or revenue, or actively harms your conversion funnel to gain another, immeasurable advantage.
Saving money is rarely strategic.
A big frustration for newer engineering leaders is when they save money through an investment they made and think “I was being strategic! I saved the company $50k”, only to them be told they weren’t even in the ballpark.
The problem is that saving money is rarely the right strategic decision. Anyone could save the company $50k just by quitting - there’s more to being strategic than money.
You see - if you save a dollar, you save a dollar. Strategic thinking is looking at that dollar and how you can change its total expected value in the future.
If you can instead spend that dollar but then get $30 back in 6 months, saving a dollar isn’t worth it. In fact, it would be irresponsible to save that dollar because you’re sacrificing a potential $29 more by not spending that dollar - penny-wise and pound-foolish.
When executives hear “you saved a dollar”, they hear “I chose to keep $1 over making $29.” Even worse, if you spent $100k in time to save that $50k, that’s a net negative.
Effective cost management is important, but it’s not strategic - it’s tactical. While saving money might enable future multiplicative investments, it shouldn’t be treated as the strategic end goal. Focusing entirely on costs also leads others to start viewing engineering as a cost center when the perspective should be as a profit center.
I was once being pitched on investing in a startup. They had a product that was already monetized, growing demand, in a market with nuanced needs that wasn’t viable
to being served by competition. They needed to scale to be effective.
The problem - they were asking for money but shy on details on how they would spend it. When I drilled down, they stated that they were intending on saving the money to have confidence in their sustainability as a company.
Wrong answer. If I wanted to have some place to hold money safely I’d just buy bonds. When I pressed further, they doubled down on the sustainability, saying they “needed to eat.” An exponentially worse answer to give an investor.
After a quick look at their incredibly messy cap table, I declined to invest - I wasn’t there to feed 12 techies, 7 of which had already checked out.
To be truly strategic, you have to think differently than you’ve thought before. It’s not about what’s next or even later, it’s about what could be, why it matters, and what has to be true to make it real.
It means stepping back from the day-to-day: the roadmap, the sprint, the quarter, and doing deep thinking about tradeoffs, positioning, timing, and risk.
Strategic thinking isn’t just about lookin forward or against a longer timeline, it’s an entirely different lens. You stop optimizing on what's in front of you and focus on shaping what’s possible, which is an entirely different game.