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How Bridging the Strategy People Disconnect Can Help You Ride the Valley of Death


Understanding the Valley of Death


When I sit down with a Director, CEO or Founder to discuss their growth plans or strategy, they often have some frustrations or concerns about why it hasn’t eventuated to date. If they’ve called me in, they likely recognise there may be an issue with the execution of that strategy that is somehow tied to their people but still…they struggle to put their finger on why.


At some point in that conversation, I ask them if they’ve heard of the Valley of Death. Before they answer their face tells me everything I need to know. Either they go slightly pale, look fearful and say no. Or they look slightly confused and mumble something about that having only to do with tech start-ups.


According to Harvard Business Review, the valley of death curve represents the crucial early phase of new ventures. It is frequently associated with tech start-ups, and most of the published articles online seem to provide advice on how to get through the early negative cash-flow stages before revenue comes in. However, those challenging stages can hit at different points in any business. That Harvard Business Review article recognises four distinct phases a business might enter a valley of death, based on the organisation’s growth ambitions, and whether the business model matches those ambitions.


The theory is originally based on the work of Verne Harnish’s book, Scaling Up, in which he shows that, based on 28 million US firms, there are different valleys of death at different revenue levels, with 96% of firms being below $1m, 4% above $1m, only 0.4% being above $10m, and of the 28 million firms, only 17,000 of them are over $50m in revenue. Between each plateau there is a significant need to change the way you do business to make the next level – essentially, it’s like being at that crucial phase of a new venture all over again. As Verne Harnish says so eloquently at each phase you have to adapt or die.

 

Bridging the strategy people disconnect


For example, at 25 employees an organisation reaches their second valley of death. They have survived their first one, which hit at circa 10 employees. Now they are at a point where to hit their growth plans, they need to implement a layer of middle management, and policies and procedures to ensure some consistency across a larger number of people. This will fundamentally change the culture of the organisation, which until this point will likely have hinged on the personality of the founder(s) or leader(s).


Team members typically want the career advancement opportunities that come with growth, but they also want to maintain a personal relationship with the founder or CEO. This is a tension that needs resolving.  The change process may cause a fear response amongst the staff which can affect culture. Middle managers may be less experienced and less able to deal with this response, and process and policy can seem a less personal way to resolve conflict than the organisation has traditionally used. However, now at a bigger size, it is simply impractical for it all to sit on the shoulders of the original founder(s) or leader(s) or they will burnout.  Welcome to the valley of death!


If some of this is ringing true for you, it may be that you have a strategy-people disconnect. That is, a divide between your strategy and your people's needs, capabilities, and motivations.


Strategy cannot be executed effectively if your people are not engaged and performing to their potential. As Peter Drucker famously said culture eats strategy for breakfast, but that was in 2006 and we have come a long way since then. Research by Beaumont People into meaningful work found that culture was but one subset of one of the four factors of meaningful work.


When you and your team members are in meaningful work they have higher engagement levels, less sick leave, and are less likely to leave your organisation. Your people will have a higher commitment to your organisation, and your overall organisational performance will improve, even increasing your organisation’s performance during times of downturns or downsizing, therefore also improving the happiness of leaders. These higher levels of performance and engagement mean they are more likely to execute your strategy.


Slow down to accelerate achievement


Do not make the mistake of treating the symptom with a quick-fix solution. Instead, take the time to find and cure the underlying illness. The immediate need for results, caused by the pressure of your board, a reporting cycle, or internal or external stakeholders often means we don’t take the time that such important matters deserve. As executives, we feel pressure to turn issues around quickly. However, as McKinsey showed, slowing down does indeed speed up the results.


I recommend these steps:


1.     Observe – internally and externally. What is working, and what could be improved?

2.     Assess – your strategic current state against your desired state

3.     Review – discuss with the executive leadership team to come to a judgement

4.     Consult – consider seeking external advice


Taking these actions will help you determine whether you have a strategy-people disconnect and will save you a significant amount of time, money, and stress – helping you achieve better results, and ensuring you are much more likely to adapt and take the necessary steps to get you through the Valley of Death to the next plateau.

 

Author of ‘Meaningful Work: Unlock Your Unique Path to Career Fulfilment’, Nina

Mapson Bone is a people strategist, consultant, chair and keynote speaker. She

consults with boards, CEOs, founders and executives on bridging the disconnect

between strategy and the needs, motivations and capabilities of their people. Nina’s

executive career has spanned three continents and diverse sectors. She was

previously the Managing Director of Beaumont People, where she led a period of

significant growth for the organisation, during which it was recognised with multiple

awards. For more information visit www.ninamapsonbone.com.au

 

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