When Belief in the Future is Not Enough
It's great if your team believes it can achieve a lofty goal. But it's never sufficient.
Years ago, my employer did something I never quite understood. It was a software company with about $25M in revenue. They had a goal of reaching $50M within three years. It wasn’t unreasonable. It required about a 26% growth rate: about $32M by the end of year one, $40M the following, and $50M by the third.
So when we missed our target in year one (we landed closer to $29M), did we adjust the remainder of the plan accordingly? Of course not. Years two and three just required us to “work a bit harder” to catch up. And when we missed year two, we told ourselves the same story at the annual offsite. They were just “normal variations” in the plan; we could still hit $50M. Right? Except year three came and went, and $50M was nowhere in sight.
Why? An easy diagnosis might be that we weren’t motivated enough.
Plenty of businesses grow at 26% or more in a year; even doubling revenue is not uncommon. Growing at that clip must have seemed too difficult, you might think. We were crippled by some sense of self-doubt, some limiting belief that such success was only available to others. But that couldn’t have been less true. Our company was full of hard-working optimists. No one thought $50M was out of reach; in fact, that was only seen as a stepping stone to something even more ambitious.1 Perhaps that was one reason we kept insisting on getting $50M, even as it became harder to reach.
What was missing then? A closer look at our plan will provide some clues. If you can call it that. Our path to $50M was really just a series of knob adjustments: increase new accounts by 10%, cut the cost of acquisition by 15%, reduce churn by 7%, get 4 new logos onboard, that sort of thing. It was a kind of “compound incrementalism” that depends on a lot of small changes to the status quo adding up to something much larger. Or “strategy via Excel” if you like2.
What we lacked was an understanding of how the company was going to work together to make those improvements in the first place.
Or as Roger L. Martin might put it3, we never discussed “where we were going to play, and how we were going to win.” Instead, each department operated in single-player mode: responsible for improvements within the bounds of their department, but rarely coordinating with others to achieve something more meaningful. Product would do its thing by fixing tech debt and adding some new features. Finance would run some pricing experiments. Marketing would try a new campaign idea they hoped would work. But we never had a conversation about the specific choices we would make as a business in pursuit of our goal. Nothing compounded, nothing created strategic advantage, nothing told us how we would work together to make those improvements so carefully plotted out in Excel.
We had belief. What we lacked was a shared aim.
Having strong belief in the future, but no shared aim about how to get there is just one of four ways an organization can operate. Here are three others:
High Belief / Low Aim: The team has confidence that a bright future is possible. They are motivated and optimistic. But without a common plan on how they will get there, there’s a lot of activity but little progress to show for it. They may even go backwards by working at cross purposes.
Low Belief / High Aim: The team has a clear sense of the specific choices it should make to win. Everything makes sense on paper. But the plan exceeds the team’s talents, resources, or appetite for risk, so it gets shelved. The business remains stuck in the status quo.
Low Belief / Low Aim: The team is cynical about the future. Maybe it’s the culture, or maybe it has been conditioned to think that way because the industry is stagnant or it has a weak competitive position. There’s no plan to change things. Don’t work here (unless you love turnarounds).
High Belief / High Aim: The team is on fire. They believe a major outcome is possible and they are actively making it a reality through the shared purpose they possess. The team has a real shot of leading its category and leaving competitors behind. Everything clicks.
Organizations with low belief have a motivational challenge to contend with. They must cultivate confidence, discomfort with the status quo, and an appetite for risk. Organizations with low aim have an intellectual challenge. They must discover how its various functions will work together towards a common purpose, and make hard choices about what that purpose is.
If you want to win, you need both.
If this framework resonates with you, Henrik Kniberg has a similar one he uses to describe the engineering culture at Spotify, called “alignment vs autonomy.”4 But the “aim vs belief” framework looks at business through a different lens: the human mechanics behind decisions.
Humans need aim and belief to do our best work. We need aim so we can work with the confidence that our efforts contribute towards some larger purpose; without it, we labor only for labor’s sake.5 We need belief because if we want to do something meaningful, we are probably pursuing something that involves an element of risk. Belief is what tells us that our goals are possible in the face of such uncertainty.
John Rougeux is the founder of Flag & Frontier, a strategy consultancy that helps executive teams align around their strategy and narrative when the future is up for grabs.
Footnotes
In fact, one of the reasons I joined was because of how motivated the team was. It seemed like a place where we could accomplish big things. Unfortunately, it’s very hard to address aim from the outside; in any case, I didn’t know how.
I have to come clean and share that I’m guilty of strategy by Excel myself. In a role I had at an online gaming startup, part of my job was to create a growth model that would support a pre-determined revenue target. It was very precise, and completely inaccurate.
Roger L. Martin is the author of Playing to Win: How Strategy Really Works. The questions of “where to play” and “how we will win” are recurring themes.
See this overview from Org Topologies on how “aligned autonomy” works: https://www.orgtopologies.com/post/aligned-autonomy-at-scale
This is one reason I’m no longer enamored by the philosophy of “aim for the stars, hit the moon.” If the stars don’t seem reachable, most teams are more likely to pursue a more feasible goal instead. That’s my experience, anyway.