“This [game] is chess, it ain’t checkers!” The classic quote from the movie Training Day came to mind when I was reading the section on Strategy in “Scaling up: How a Few Companies Make it…and the Rest Don’t” by Verne. It was by far my favorite part of the book.

Sometimes people tend to think running a business is as straightforward as checkers. You make move X, Y, and  it leads you directly to your expected outcome Z. In business this usually translates to the simplistic logic of, “If I produce more, I will increase my revenue.” This is only partially true. In my experience, running a business mirrors the complexity of chess. Sometimes, you have to step back and think three or more moves ahead. Sometimes, it’s counter intuitive, you must sacrifice a pawn for the queen down the road. Sometimes, you have to reverse engineer your moves and it may not make any sense to a lay observer. And most of the times, you have to reevaluate your strategy, as chess is a dynamic game and unexpected moves from your opponent could result in unforeseen obstacles.

The section on Strategy spoke directly to me as a leader, and I was heartened that we have intuitively adopted some of the ideas Verne introduces. The flip side of that is I am enjoying the challenge to work with the other concepts we haven’t yet  defined. I’m particularly excited for the chance to step back and reassess, redefine, and articulate our overall strategy.

As in all the sections, Verne provides specific tools and a framework for our discussions. In Strategy, he speaks to the athlete in me by discussing the importance of “core” strength. A company’s version of lower back and oblique muscles and a six pack of abs is its:

• Core Values
• Core Purpose
• Core Competencies

Core Values

Although we have defined core values, I found myself looking forward to creating a space where we can explore our original core values again and test whether the same ones will stick or new ones will emerge.

One key takeaway from the book is that core values define the company’s culture, and provide a final “should/shouldn’t” test for all the behaviors and decisions by everyone in the firm. Core values also express a company’s personality. Our company is relatively young and fast growing, so this is an opportune time to step back and discern our core values.

Core Purpose

The core purpose, according to Verne, expresses the “heart” of a company and answers the “Why?” A powerful purpose tends to revolve around a single word or idea (e.g., Happiness = Disney, and  Innovation = 3M).

I have some ideas around our core purpose revolving around how we do technology differently to positively affect people’s lives, whether it is our employees, clients and shareholders, and being a remote/Distributed first culture that allows us to work in atypical and agile ways.

One thing that burns me up as a CEO, is when I find us doing something just to be typical. This process has me reflecting on how we can infuse the word different in everything we do and making it concrete. I look forward to applying the 3 “Why?” questions, to our purpose to drill down into our core purpose.

Core Competencies

According to Verne, a core competency has 3 attributes:

• It is not easy for competitors to imitate
• It can be reused widely for many products and markets
• It can contribute to the benefits the end customer experiences and the value of the product or services to customers

What’s important about defining and articulating our strategy lies in understanding what we don’t do and in this way coming to a mature space where we may decide we don’t want to pursue a certain client or line of business because that’s not in line with our strategy.

Verne makes a note in the book that if defining the strategy were an easy process, every company would have a killer strategy. This process is actually harder for CEOs who think they have all the answers, since it is necessarily a messy and creative process. This really spoke to me, and I realized that much of my journey so far has been intuitive and I am willing to trust this process.

He then goes through a specific framework, by far my favorite tool, called the 7 strata of strategy to help the strategic thinking team to create and maintain a competition-crushing, differentiated approach to a specific market.

It will be hard work to wrestle with these questions and articulate our own vision summary, as these are atypical questions for growing businesses to face. More importantly, this work can not be done behind closed doors by a handful of executives. It will require a sustained engagement with you: our frontline employees, our clients, and our managers. The payoff will be huge as we all get on the same page and create an unstoppable momentum with the WhirlWind we create. And like a good game of chess, we may not have all the answers at the beginning of the game, or even the middle. This is going to be one of those drawn out, long term games and we are “in it to win it”.