What We Don't Do

Strategy is hard and becomes increasingly important as companies grow and scale.

One thing I advise teams to focus on when they go through a strategy exercise is to identify the things they won’t do.

One way to do this is to make a list of all the things people inside (and outside) the company are encouraging the company to work on.

Then break that list into two lists – the things you will do and the things you won’t do. This should be a group exercise, iterative, and ideally done on a whiteboard or some other similar tool.

The timeline for this list of projects doesn’t matter a lot. It could be for the next year or it could be for the next three to five years.

This exercise identifies the things that are most important versus the things you would like to do but can’t get to right now.

And this process helps solidify the strategy.

I think a company, at least a company that is smaller than 1000 people, should not try to do more than three big things a year. These big things can include a number of smaller things in them. So you might have a list of ten things you want to do this year. If you can organize those ten things into three big focus areas, then that works. If there are literally ten big things you want to do this year, I think that is way too many.

The most successful companies I work with have a clear sense of Mission/Vision>Strategy>Priorities that guides the company quarter to quarter, year to year, and aligns everyone on the team around where the focus is and why.

Saying no to things that are off mission, off strategy, or are not a priority right now is critical to getting this right.

I say this as an investor who has seen his ideas end up on the no list way more often than the yes list. I understand why that is and accept it. I would rather work with a company that knows where it is going and why than one that blindly listens to its investors.

#entrepreneurship#management

Comments (Archived):

  1. Alex Murphy

    I like the idea of limiting to just three big things a year, but when it comes to strategy, I tend to think in longer cycles – Limit to three big things over at least five years.It simply never ceases to amaze me how long it takes to become the expert, the market leader, dominant etc in a core application. Think indeed from 2004 to 2012 focused on all jobs, partnership channels, SEO; all centered around the core of clicks on jobs.Think Google on search quality, mint on all financial points, Pinterest on boards, Twitter on tweets, etc.Know your atomic unit and focus on just a few things that support it, and iterate like hell on those things.

  2. Rohan

    Awesome. Thanks Fred.Nice reminder when it comes to managing ourselves, too.

  3. LE

    I think a company, at least a company that is smaller than 1000 people, should not try to do more than three big things a year. These big things can include a number of smaller things in them.What makes something a ‘big’ thing? Budget needed to do it? Time and personnel needed? Departure from the original mission and outragiousness? [1]While I am not in a position to have to think about this my feeling is they key is in the ‘smaller things in them’ in order to see what ‘sticks’ to the proverbial fan.And what is ‘a year’. Does that mean this is done at any point in time (say March until the next March) or strictly on a fiscal year basis (which kind of makes no sense..)[1] Or is it so big that if it doesn’t work you fail? (Boeing and 747, large company example).

    1. fredwilson

      good question. probably a good topic for a long(er) blog post

    2. JamesHRH

      Big likely means ‘of importance to growth or survival of company’.Close 100 new customers.Launch new product into new market / category:Acquire somebody.

  4. @billg

    So true. Applies equally to companies with >1,000 employees as well.

  5. LE

    I say this as an investor who has seen his ideas end up on the no list way more often than the yes list. I understand why that is and accept it.Could be as a result of the ‘not invented here’ bias [1] where people only want to do something that they can take credit for. Runs against entrepreneurship though quite frankly I don’t care whose idea it is if it will put money in my pocket. [2][1] Or perhaps because you aren’t willing to push hard enough for what you believe in because you aren’t sure yourself of the ideas.[2] And in many cases have given ideas to companies where there is no money in my pocket at all actually.

  6. William Mougayar

    Really awesome advice and applies even more squarely to early stage companies who can’t afford to do a lot of things. A lack of focus is a killer. There’s a startup I’m quite involved with, and I specifically asked them last month to do an offsite mtg in order to pin down what they will / will not do, and get everyone aligned behind it.

    1. fredwilson

      good advice

    2. Girish Mehta

      Back when I was a product manager a couple of decades back, for every new product requirements document we had to create a “The product Is /The product Is Not” Matrix. It never got approved without a “The product Is NOT” section, and that section often provoked a lot of debate/comments before cross-functional approval…

    3. Joe Cardillo

      V. much agree re: early stage companies. One thing no one’s hit on squarely yet is that it helps to have a place / space for early experiments, some of which will filter into actual risks worth taking. But a catch, in my opinion, is that the vast majority of people are not good at this, and that’s why the most talented growth / product manager types are few and far between.

    1. JimHirshfield

      No

      1. Girish Mehta

        I Know, No ?

        1. JimHirshfield

          Am I really successful now?

          1. Girish Mehta

            Yes and No (This phrase is one of my pet peeves btw).Taleb has a story in his book – Michelangelo is asked by the pope about the secret of carving his masterpiece, the statue of David. His answer: “It’s simple. I just removed everything that is not David.”

          2. Vasudev Ram

            Which book?

          3. Girish Mehta

            AntiFragile.

          4. JamesHRH

            Repeat 10,000 times.

          5. JimHirshfield

            Definitely no.

          6. Vasudev Ram

            Buffet’s condition is a necessary but not sufficient one.More logic … (runs away)

          7. JimHirshfield

            buzz kill

          8. Vasudev Ram

            Not really, more like word skill.

    2. fredwilson

      he would know

    3. K_Berger

      Something similar also credited to Warren Buffett…The Story of Mike FlintMike Flint was Buffett’s personal airplane pilot for 10 years. According to Flint, he was talking about his career priorities with Buffett when his boss asked the pilot to go through a 3-step exercise.STEP 1: Buffett started by asking Flint to write down his top 25 career goals. So, Flint took some time and wrote them down.STEP 2: Then, Buffett asked Flint to review his list and circle his top 5 goals. Again, Flint took some time, made his way through the list, and eventually decided on his 5 most important goals.STEP 3: At this point, Flint had two lists. The 5 items he had circled were List A and the 20 items he had not circled were List B.Flint confirmed that he would start working on his top 5 goals right away. And that’s when Buffett asked him about the second list, “And what about the ones you didn’t circle?”Flint replied, “Well, the top 5 are my primary focus, but the other 20 come in a close second. They are still important so I’ll work on those intermittently as I see fit. They are not as urgent, but I still plan to give them a dedicated effort.”To which Buffett replied, “No. You’ve got it wrong, Mike. Everything you didn’t circle just became your Avoid-At-All-Cost list. No matter what, these things get no attention from you until you’ve succeeded with your top 5.”(This came from jamesclear.com/buffett-focus)

  7. David C. Baker

    If you glance back over your life from time to time and determine what impact your actions have had on your success, any success deficit will not be from lack of opportunity. Most of the people who don’t have enough opportunity (in developed cultures) are new to the game or are incompetent. No, the reason you won’t have achieved as much is because you didn’t say no and focus in a way that people around you will deem ruthless.

    1. fredwilson

      i agree

      1. pointsnfigures

        Andy Swan says if you are given two choices-one a blow off the top choice and one an average choice. Always take the blow off the top because 9/10 times the average one will still be there if the first one fails.

      2. JamesHRH

        Apparently Bill Gates St once asked Bill Jr and Warren Buffet to credit their success to a single word.They said ‘focus’ simultaneously & immediately.

    2. Alex Murphy

      Where does the need to explore more paths fit in? Saying no to everything is in direct opposition to trying new things … is it not? And if one doesn’t try new things, don’t you risk becoming stale or missing a new and meaningful trend?

      1. David C. Baker

        Derek Sivers wrote that every new opportunity should be “Hell, yes!” or “Hell, no!” without any middle ground. The opportunities that are neither are just ignored.

    3. JamesHRH

      Yes, yes, a 1000 times yes.Damn it.

    4. Sam

      “Say no and focus in a way that people around you will deem ruthless.” And therein lies the essence of the challenge.

  8. Frank W. Miller

    Boy oh boy. You don’t want sycophants but you’re in a power relationship with your companies and IMO you have a tendency towards annoyance with dissenting opinions in at least this public forum. They’re all gonna listen to what you say and despite your rose colored glasses that its all touchy feely they’ll “do what they’re told.” I’ve sat in that seat more than once. That’s what we did even tho my investors would say the same thing, I’m not telling you, I’m “advising” you. It all counts towards the cost the company pays to have VC as an investment.

    1. fredwilson

      no they won’t do as they are toldtrust me on that

      1. Frank W. Miller

        lol

        1. pointsnfigures

          I think that the assumption is investors can rule with an iron fist over entrepreneurs. That’s not the case. You can suggest things-and discuss things. But, at the end of the day the entrepreneur is going to do what they think is best even if it conflicts with what the investor thinks.

        2. JamesHRH

          My experience with Fred and other top notch investors would say that you are not working with top notch investors.Fred has absolutely put the hammer down on an entrepreneur or two….but its usually at the request of others ( http://www.businessinsider…. ).

  9. Jonathan Libov

    Curious if/how you’d distinguish between the “strategic” and the “tactical” in this context

    1. fredwilson

      i think tactics is what flows from strategy, but you can use talking about tactical items to suss out strategy

    2. JamesHRH

      A tactic is soemthing you use once – I am calling a friend to get me a meeting w customer X;A strategy is something you use repeatedly – always get a warm referral to new customers.

  10. jason wright

    What should Twitter’s three big things for 2017 be?

    1. Sam

      1. Increase revenue per user-minute 2. Run a professional auction process3. Increase number of user-minutes

  11. PhilipSugar

    Great post. We are going over two of my five principles this week:1. Find and keep the best people2. Orchestrate between departments3. Set up a commitment system (not email)4. Listen and see customers and potential customers5. Set strategy which is most importantly what you don’t do.I don’t care if the number is 1 or 5 but it has to be literally a handful.It can’t be squishy things like simplify or focus it has to be a clear goal. And if somebody wants to work on their own agenda, then they need to be out. Out now. That is the biggest thing I’ve seen and it doesn’t matter how big you are. Get your 1 to 5 “big rocks” moved and you will move forward.

    1. Elia Freedman

      I like the idea of agenda as a litmus test. Deciding when someone stays and when someone goes is the hardest thing I’ve ever done. I’ve used “are they helping me get where I want to go” as a way to decide. This is another way to look at that same question, I think.

    2. Robert Metcalf

      @philipsugar:disqus what do you use for your non-email commitment system?As we move away from internal email (slack, video conference, etc), having somewhere other than my inbox to track to-dos and assignments is a growing need that isn’t fulfilled by any of my “native” apps. Need to have something more reliable and scalable than my own memory!

      1. JamesHRH

        Branding irons.I kid.

        1. Robert Metcalf

          That’s one way to keep the list of big things down to 3/year!!!

          1. Neima

            While branding irons are sure to keep us on track with a constant reminder of top priorities, I am having the same problem as Robert. So far, my notebook and Google Drive is where I keep stuff, but really not the best solution.

      2. PhilipSugar

        Fogbugz

    3. cavepainting

      How do you know if someone is working on their own agenda? Even if you know who is undermining the system vs. pushing it to become better, the difficulty can be with lower level managers who tend to conflate people challenging status quo or think differently (who are needed) to those genuinely difficult.

      1. PhilipSugar

        That’s where having buy in from the top is critical. Upper level managers should know what lower level managers are doing.

  12. pointsnfigures

    I would recommend any team that is an accelerator feeling “mentor whiplash” to take a deep breath and do this.

  13. Pete Griffiths

    And such clarity dictates organizational design.

  14. Kent Karlsen

    Many boring meetings that leads nowhere? Establish a “business why” to all the meetings. One good idea to have super focus (yes/no decisions). Have a 1-side business action plan on four operations and pin it on your wall: Finance goals. Market goals. Product goals. Innovation goals. If your requests or meeting has nothing to do with your focus area, say “no”. Very often you will say “no”, and save your time to do the important stuff. I agree – strategy is pretty much to say “no” and filter over time what is not smart to do. Over time the best strategy is more obvious to the team. Consensus driven strategy planning I personally have best experience with (feedback from many people). Unless you have a very strong business knowledge to the problem you are going to solve.

  15. LaVonne Reimer

    Rule of 3 explains my killer win rate as a trial lawyer. Every closing argument started with “there are just 3 things you need to remember in deliberations.” I carried this into my first startup. Oh me, I’m all focus. What I missed was that it’s not hard to distill a case to 3 when you “only” represent the baby. It’s not your baby. Once I was leading my own baby I had at least 28.5 points I wanted everyone to know and therefore the team to execute. Even to this day I am a work-in-progress on this point but always, always that preachy lawyer is in my head saying “just 3 things,” “just 3 things.”

  16. cavepainting

    It can be really hard to know what’s important when you are searching. (i.e. you are looking for the right problem to solve, and the right solution for that problem). While you are executing post product-market fit, it is easier to focus because the thing is far better bounded.An early stage company needs clarity on the north star that is the very reason for its existence. Whose problem are you solving, and what is the single most important metric you want to improve for them? The sooner you can find this, easier it is to say no to the things that do not further this cause.

  17. JamesHRH

    Timeless advice.

  18. JamesHRH

    I recently made a quantum improvement in my tennis game by focusing on ‘What Not To Do’.It turns out the Don’t List is 3 or 4 items; the Do List is 300 or 400z

  19. OurielOhayon

    For example what are the things usv won’t Do?

  20. pointsnfigures

    This goes for investment funds too.

  21. riemannzeta

    Do you need to know what you want to focus on before you decide what not to focus on? I believe even here “no” is the answer. Often we face a problem so complex that we cannot even reason about it. In that kind of situation, I believe we are better off simplifying the problem until we can, which means simplifying assumptions, which means in the context of business strategy, saying “No.”I believe this is a key failure mode for many businesses. We assume that by correctly defining our mission/purpose, we will have focus and thus be able to say “No” to the wrong things. In practice, it seems like we have to say “No” in order to gain the clarity and focus.A few years ago, I remember @FAKEGRIMLOCK making a similar point about personality.

  22. Donna Brewington White

    “The things we won’t do” — this is very helpful. The quest for focus is such an ongoing challenge. For me, the more ways to think about and define this, the better.I believe that some of my biggest mistakes in business have come from not adhering to this advice. So many opportunities, so little time. Sometimes I think I need to go back and re-take economics. If only I had known how applicable they would be.