e x e c u t i v e
f o r u m
Micro
Strategies
The Key to Successful Planning
in Uncertain Times
Dave Logan and Halee Fischer-Wright
I
n the research for our recent book (Tribal Leadership, written with our coauthor John King), we
collected data on 24,000 people over almost a decade. We heard many successful leaders describe their
approach to setting strategies as “ad hoc,” and make
comments such as: “we were flying by the seat of our
pants,” “we didn’t know what we were doing,” and
“we were following our instincts.” What we discovered in looking at all these cases is that these leaders
were actually making plans that focused on specific
outcomes with very narrow time horizons (often 90
days or less). They were moving from one short-term
objective to another using what we came to call micro
strategies.
Despite their misgivings about the ad hoc nature of
their planning, the individuals who used the micro
strategy process were remarkably successful. And when
they noticed that they were using a rational process,
they often became more confident leaders. Further,
when we taught this process to others, many of them
were able to set and implement strategies to accomplish important goals, even in industries with rapid
change or high degrees of ambiguity. Micro strategies
allow leaders to course-correct their way in pursuit of
a longer-term strategy, such as a company’s five-year
strategic plan.
In this article, we describe the micro strategy process,
using crowdSPRING as a case study. The company
runs a Web site that allows buyers seeking creative
talent, such as graphic designers, to put out bids for
projects. On January 5, 2009, Wired officially declared
crowdSPRING the winner of the 2008 Small Business Competition. It also won the 2008 “overall audience choice” for best new company at the “Under the
Radar” conference in Mountain View, California; the
Newcomer Award from the Illinois Technology Association for best new start-up in 2009; and was named a
finalist in the 13th Annual Webby Awards for “Community.”
The Process
The microstrategy approach is closely aligned with the
way military strategists have been trained for hundreds
of years—see, for example, the classic On War by von
Clausewitz—a fact that made leaders more confident in
the approach. (We’re indebted to our colleague John King
for reformulating military strategy in business terms.)
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roughly takes the following course (summarized in
Figure 1):
The individuals who used
1. Leaders ask: What do we value? Answering this question can require deep reflection and clear thinking.
the micro strategy process
2. Leaders ask: What do we want? They work until the
answer is specific, with a due date, making sure that the
goals are specific extensions of their values. This discussion results in defining the outcomes.
were remarkably successful.
A strategy, in the model we synthesized from our observations and military science, is a plan that answers three
questions: “What do we want?” (resulting in outcomes),
“What do we have?” (resulting in assets), and “What
will we do?” (resulting in actions).
A workable strategy, we argue in Tribal Leadership,
is one in which each area—outcomes, assets, and actions—has sufficient support in the other two. The
process of answering these three strategic questions
3. Leaders ask: What do we have? Here, they pool the
collective wisdom of everyone involved to make a long
list, resulting in their inventory of assets. As a habit,
leaders and strategists add to their assets on a regular
basis.
4. Leaders ask: Do we have enough assets for the outcomes?
5. If the answer is no, the leaders adjust the outcomes
or develop an interim strategy to build the assets they
need, or both.
6. If the answer is yes, they ask: What will we do? The
result is a list of actions.
Figure 1. S trategy M odel .
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7. Leaders ask: Will the actions accomplish the outcomes?
8. If the answer is no, they add more actions, paying
special attention to how assets can be translated into
actions.
We’re often asked how this model accounts for competitive advantage and other aspects of applied economics. The answer is that if the people engaged in
setting a strategy (on our model) are knowledgeable of
the competitive landscape, the answers they provide to
the questions in steps 4 and 7 will take that knowledge
into account.
As the economic situation has changed over the last
few months, uncertainty increased, resources decreased,
and the need for innovation kept rising. As we observed
what successful leaders were doing, we saw an important change: the time frame of successful strategies (as
defined by outcomes-assets-actions) decreased, from
months to weeks, and even to days.
In work Dave Logan and Steve Zaffron later published
as The Three Laws of Performance, we noted that people
who were adept at using micro strategies developed a
different view of themselves, their business, and entire
industries. They saw that almost any situation was malleable, that opportunity was everywhere, and that they
were prepared to make something important happen.
In short, repeated use of micro strategies made leaders more confident and compelling, in stark contrast
to many other leaders who froze in uncertainty as the
economy changed.
The time frame of
successful strategies is
decreasing.
crowdSPRING demonstrates this process and the benefits of micro strategies almost perfectly, although, like
many in our study, its leaders followed the method
intuitively.
The Birth of crowdSPRING
Ross Kimbarovsky and Mike Samson, the co-founders
of crowdSPRING, have been friends and collaborators
since 1992. In 2006, Mike was seeking to acquire a
video post-production firm in Chicago. His objective
was to develop a method to outsource parts of the digital post-production process to India.
In mid-2006, Ross observed that individuals and
groups of nonprofessional designers throughout the
world were creating designs that rivaled designs created by professionals. He shared this observation with
Mike: “One group of student designers in Malaysia had
an online competition for who could develop the best
print ad. I compared the results to the best-designed
professional print ads in the world, and couldn’t tell a
difference.”
Shortly afterward, Ross and Mike read the June 2006
Wired article by Jeff Howe, “Crowdsourcing,” which
highlights cases in which “distributed labor networks
are using the Internet to exploit the spare processing
power of millions of human brains.”
The two were interested in starting a venture that
would somehow combine their unique backgrounds,
love of technology, fascination with collaboration,
Mike’s MBA, Ross’s experience with intellectual property, and their desire to be on the cutting edge. Their
first steps were to talk with people in many types of industries that would benefit from connecting buyers to
local design talent like that in Malaysia. The way they
phrased their initial goal was to find some evidence that
would disprove the viability of a company connecting
buyers and creatives.
The entrepreneurs focused their venture on bringing
their core values to life. They identified a long list of
these values to us, including transparency, community,
innovation, creativity, and hard work. Businesses that
didn’t involve these elements weren’t of interest to
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People adept at using
micro strategies develop
a different view of
themselves, their business,
and entire industries.
them. Without thinking about it, the two moved in
the direction of launching a cutting-edge business that
would be molded by their values. In our observations,
micro strategies grounded in people’s values generally
lead to higher rates of motivation and a greater ability
to work past obstacles.
Although the two described their activity up to this
point as just “kicking around the idea of starting a
business,” they were following the strategy process.
Their outcome was “to prove or disprove the viability
of a company connecting buyers and creatives by late
2006.” Their assets were their knowledge (intellectual
property law, collaboration methodology, creative services, outsourcing methodologies, the crowdsourcing
model), experience (successful careers, early adopters of the Internet), networks of people, supportive
families, a working relationship based on friendship,
financial resources (albeit modest), passion, and energy. These assets were sufficient (in their view) to accomplish the outcome. Their actions were to talk the
business idea through with people they knew, to explore existing sites such as guru.com and elance.com
to examine similar business models, to start to construct a financial model of their own, and to evaluate
whether that model was viable. In their minds, these
actions were enough to get them to their outcome.
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Once the micro strategy was set—outcomes, assets,
and actions all deemed sufficient—they moved into
immediate execution of their action list. It was done
within a few months.
Overcoming Obstacles
At this point, Mike and Ross hit an obstacle: they
didn’t know enough about the community of designers
to develop a business that they knew would be attractive to them. In terms of the strategy process, their outcome was “design a viable business model within two
months.” But their assets were insufficient to get them
what they wanted—specifically, they lacked knowledge
about the psychology of the design community—so
they launched what we call an “interim strategy.” It
has the same anatomy as any other strategy, but its
intent is to build the assets needed to accomplish the
first strategy.
To set an interim strategy, they had to define the interim outcome. It was: “to understand the psychology
and pain points of designers by December 2006.” They
had the same assets as in their first strategy, which were
enough to move on to setting actions, which consisted
of designing a survey, contacting designers they knew
to fill it out, and to use their network to find more
people to give them data. Their action list also included
analyzing the survey data and collecting more anecdotal
evidence about the design decision-making process.
With the interim strategy ready for implementation
(with sufficiency in outcomes, assets, and actions),
the two created and sent a survey out to 200 people
they knew or connected with in online forums. crowdSPRING received 130 completed surveys. Many of
the respondents commented that no one had ever
asked what the designers want, so, as Ross and Mike
explained to us, people were eager to offer input and
ideas. For the next several months, they continued to
try to understand the psychology of designers. Creatives, they learned, wanted to compete head-on with
peers they respect, to get quality feedback and sharpen
their skills.
They had now concluded the interim strategy and were
back to the second strategy: “design a viable business
model within two months.” (The first strategy—“to
prove or disprove the viability of a company connecting buyers and creatives”—had been finished months
earlier.) Also, they finished their interim strategy ahead
of schedule, taking only a few weeks.
The business model that gelled for the entrepreneurs
was a network connecting designers and buyers focused
on projects. In time, the model could grow to incorporate other creative products, such as copyrighting and
video.
Multiple Micro Strategies
With a conceptual business model in place, Mike and
Ross’s next goal was “a bulletproof investor pitch emphasizing financial projections.” Mike told us: “The
half-joke was, we have to be able to prove to our wives
that this new business is worth the opportunity cost
and the risk” of walking away from two successful careers. The two again went through the strategy process:
their outcome was “to prove to our wives the business
is worth the risk by the end of 2006.” Their asset list
included all those elements detailed earlier, including
their new knowledge about designer psychology. The
actions they listed included identifying about 15 people
who ran businesses in different fields and asking them
for feedback, reworking the financials based on what
they said, and also asking for other recommendations
about more people to speak with.
Ross describes the next two months: “We had more and
more of these meetings. We would go back and iterate,
debate, change, get our heads slammed up against the
wall again, and after several months, we were pretty
comfortable that we had answered the tricky questions
for ourselves, and for our potential investors.”
Also, it’s important to note that Ross and Mike had set
and were implementing three micro strategies at the
same time. One was to “create a bulletproof investor
pitch emphasizing financial projections.” The second
was to create a management model based on these financial projections. The third was to satisfy their need
for confidence—measured by convincing their spouses
that the upside was worth the risk. Each had a due date
that was only weeks or months away.
One of the reasons the process felt “ad hoc” to Mike
and Ross is that they didn’t think of these initiatives as
separate strategies. Nor did they see that all these micro
strategies served a larger strategy that was playing out
over months: “Start a new business with a cutting-edge
model that will allow us to work together on projects
we love.” (They didn’t articulate this objective until
months later, but when they did, both agreed it had
been the goal.)
As they designed the next micro strategy, their outcome
wasn’t just to raise money ($3 million), but to build “a
kitchen cabinet of engaged investors” (in their words),
advising them on the direction of the business and offering ideas. They determined their assets were enough
to get started but insufficient to raise their required
amount of money. They thus launched two strategies
at once—one to raise as much money as they could
through their existing network, and also an interim
strategy to increase their network. Mike and Ross made
a list of people who, in their words, were smart and
who would make good members of the cabinet.
Virtually every investor asked some variant of “Why
should I invest in you—what have you ever done?”
Ironically, the experience that looked out of place in
the technology field set these entrepreneurs apart.
Mike answered that he had spent 20 years supporting the creative process and the collaborative nature
of teamwork. Ross noted that, as an attorney, he had
advised numerous technology start-ups and established
companies around the world and had focused on intellectual property—and how to protect it—a core issue
facing crowdSPRING designers and buyers. (In terms
of micro strategies, the two had designed the business
model with their unique assets in mind.)
As they gained investors, they also asked for referrals to
other individuals who would be good members of the
kitchen cabinet. They completed both strategies with
$3 million from 16 investors, converting about 50 percent of the people on the original list. Note again, the
two followed the micro strategy model in its entirety.
As they gained momentum, they were able to move
on to bigger objectives faster. From the perspective of
micro strategies, the reason is they were amassing more
and more assets (including networks of people and
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knowledge), and becoming more nimble at leveraging
these into actions.
In the next few months, Mike and Ross had to halt
some of their micro strategies when they hit an obstacle
they didn’t anticipate, such as when they noted they
didn’t understand enough about the psychology of
creative talent. In each case, they developed an interim
micro strategy that would get them back on track. We
saw leaders do the same throughout our observations.
Several of our clients pulled out a clean sheet of paper
to figure out a new plan after 9/11, or in reaction to the
seizing up of the credit markets in 2008.
Within three months of its launch in May 2008, the
crowdSPRING Web site had 7,000 total users. At the
one year anniversary, the company has more than 25,000
registered creatives, more than 6,000 registered buyers,
and 4,000 projects posted for which 300,000 submissions have been posted from more than 150 countries.
Micro Strategy Best Practices
As in the crowdSPRING case, behavior of strategists
in uncertain times, although appearing disorganized,
is easily explained by the micro strategy model. At any
given moment, Mike and Ross were setting, implementing, modifying, and concluding several strategies
at the same time. The case highlights several key actions that are not obvious to strategists but are essential
for the micro strategy system:
•• Define an outcome in measurable terms. Mike
and Ross’s original outcome was to prove or disprove (to themselves) the viability of a business
model; their judgment was thus the success indicator. Later, they sought to create a financial model
that would be bulletproof for investors (meaning,
investors would be persuaded of its value and thus
invest); the influx of their required $3 million was
the measurable indicator. Examples (from our
research) of nonmeasurable outcomes include “improve sales by June” (no quantity) and “double net
revenue on product X” (no due date).
•• Ensure the outcome is a direct extension of the
values of the people who will implement the plan.
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Without a strong connection to values, strategies
often become “just another thing to do,” rather
than a plan that captures what’s most important to
the group.
•• If the group doesn’t have the required assets for
an outcome, launch an interim strategy. Many
unsuccessful strategists we observed attempted to
overcome an asset deficit by “rallying the troops”
or working harder. Such approaches almost always
fail. Mike and Ross, by contrast, created a new
micro strategy to learn about the psychology and
pain points of designers. Once they understood
this population, their new knowledge asset allowed
their original plan to move forward.
•• Micro strategies work together in a system of
superordinate and subordinate plans. Mike and
Ross’s real goal was to create a company that
would allow them to work together on projects
they loved. Accomplishing this strategy took
years. Instead of planning all the required steps
in advance, they “micro strategized” their way to
the original goal. Their approach allowed them to
learn and adjust on the fly.
•• Focus on building and leveraging assets. Mike and
Ross do not fit the profile of twenty-something
Stanford-educated entrepreneurs who start most
IT ventures. But instead of seeing their backgrounds as a hindrance, they focused on a business
that their assets would allow them to launch and
run. Further, they were relentless in their addition
of assets, be they financial models, adding investors, adding knowledge, or reaching out to people
who had contrary opinions.
•• Before going forward with the micro strategy,
make sure proposed actions are enough to produce
the outcome. As is typical of many entrepreneurs,
Mike and Ross were thinking of the actions as
they were implementing them. It’s important to
note, though, that they stopped and asked the
question about whether they had the means to
accomplish what they had in mind. Unsuccessful
strategists (in our studies) said they believed hard
work and diligence would make up for any lack of
assets. Mike and Ross made sure they had enough
before allowing their enthusiasm to carry them
away.
•• Once a micro strategy is ready, focus on actions
and also on signs that the strategy might fail. Toward the end of the Web development process,
Ross and Mike knew their plan wasn’t working.
Instead of giving each other pep talks or simply
working harder, they confronted the situation as
it was.
•• Build an executive group with people who have
successfully executed micro strategies in the past.
Implicit in this story is the way the two worked
with people who shared their optimism and
sense of audacity. Those who were frightened by
the market, put off by the lack of security in a
start-up, or needed certainty about what they’d
be doing six months from now didn’t make it.
The team has to share the view that business is
malleable, and that they are well suited to accomplish goals others thought of as impossible. This
confidence comes from having successfully implemented micro strategies before.
Using Micro Strategies to find
Success
One way to build confidence in the approach is to
notice that when people have been successful, they
were following the model and adhering to the mindset, often intuitively. When Mike and Ross saw that
their story conformed to a best practice, they were
both surprised and delighted. “Surprised” because it
felt ad hoc. “Delighted” because they could use the
method to continue the momentum and multiply
their successes. We believe micro strategies can help
leaders at all levels, and in all situations, to find success when more conventional, long-term approaches
don’t work.
Dave Logan is co-founder and senior partner at
CultureSync (www.culturesync.net), a management consulting firm specializing in delivering
performance by aligning strategy and culture.
He is author or coauthor of five books, including
the best-selling “The Three Laws of Performance:
Rewriting the Future of Your Organization and
Your Life.” Logan is also on the faculty of the
Marshall School of Business at the University of
Southern California, and is a former associate
dean. He holds a Ph.D. in organizational communication from the Annenberg School at USC.
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Halee Fischer-Wright is a partner of CultureSync
(www.culturesync.net). Prior to joining the firm
in 2005, she spent 10 years as an owner, manager, and physician in private practice. She has
served on several executive hospital boards and is
currently president of a 400-physician group in
Denver.
She holds an M.D. from the University of Colorado, a master’s of medical management from
USC, and a certificate in executive leadership
coaching from Georgetown University.
This article is adapted from “Tribal Leadership:
Leveraging Natural Groups to Build a Thriving
Organization” by Dave Logan, John King, and
Halee Fischer-Wright.
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