This is the fifth article in a series of blogs that shares many lessons I have learned helping technology companies move “onwards and upwards” over the last 20+ years.
As I reflect on the first four parts of this series (Seek Advice Early and Often, Always Selling, Always Recruiting, The Secret to Being Customer Centric, The Value of Caring), I am reminded that so much of business comes down to doing right by employees, customers, and investors.
This article speaks to the importance of having a clear plan, or roadmap, that explicitly outlines the steps, initiatives, milestones, and metrics to do right for each of these important constituents.
Way back when I was a typical teenage boy with underdeveloped frontal lobes and a penchant for proving myself, I used to think it was fun to throw directions, scribbled down on a piece of scrap paper, out the window of the car at the beginning of a road trip.
While I occasionally beat the odds and found the destination without resorting to a map or asking someone for directions, that was the exception, not the rule.
Thirty years later, I told my teenage daughter that we didn’t need to get directions from our GPS for the return trip from a college visit because I’d driven from upstate New York back to Boston hundreds of times. Well, we got enraptured in a podcast, and suddenly, we’d taken a 70-mile detour down the wrong interstate.
Whoops! (I guess my frontal lobes are still developing.)
I share these two anecdotes because, as the not-so-profound title of this blog indicates, it’s good to know where you’re going and, equally important, how you’re going to get there.
With that said, it never ceases to amaze me how often three vital maps – the 3-year business plan, the product roadmap, and an employee’s career plan – are either missing or very different in people’s minds even though they’re supposedly on the same journey.
It also never ceases to amaze me how often people say that one of these three maps “aren’t needed right now” because there is “too much uncertainty,” or it’s “too difficult to plan that far in the future” or “there’s too much going on now” to worry about that.
Hmm…sounds a lot like, we don’t need this piece of scrap paper with the directions, or I’ve got this covered without the GPS.
In general, I have always used a “People, Customer Success, Winning” framework for all company goals and initiatives as they cover, in order of importance in my view, the three constituents that businesses primarily serve – employees, customers, and investors.
(Arguably, a fourth leg – community – exists as well. I will save my thoughts on that topic for a future blog because, truthfully, I don’t really know what good looks like yet in that area.)
Let me start with People…
How often have you heard, “I haven’t spoken with my manager about my career plan in a year,” or “If I had known you thought I had that much potential, I may not have decided to leave,” “ahh, we don’t really have a succession plan to fill that position…”
Let’s personalize this: do you know what you want to do next within the organization where you’re working? Do you know what career paths or positions exist within your organization? Does your manager know the answers to these questions?
As we’ve moved into the hybrid world, the odds of these questions being discussed have dropped even further while the need and desire to have a career growth plan is even greater. Moreover, the “experts” say these trends will only intensify with Generation Z.
Recruiting and retention are two of the biggest challenges in today’s business world. Hopefully, this isn’t stretching my metaphor too far, but imagine you were in your car, headed out for a weekend getaway, but you had no destination in mind nor GPS capability on your phone or in your car. I’m not sure many people would sign up for that excursion.
At one of my former companies, we instituted a different kind of GPS, known as “Grow, Perform, Succeed,” an initiative that called for managers to sit down with their employees once per quarter to review four things: strengths, development areas, business initiatives for the upcoming quarter and the most important question,
“What do you want to do when you grow up?”
This was intended to be a paperwork-light, conversation-heavy process, which we did track in an online tool, but that was more for internal compliance than content. By far, the most important thing was for managers to have a real conversation about career growth on a quarterly basis.
I feel pretty good about asking a manager and their employee to glance at the directions for their career journey once per quarter. It’s nice when the driver and the passenger both know where they are going and how they will get there.
(image: Unsplash)
Next, The Customer…
How often have you heard the aspiration by organizations to be a “Valued Partner” or “Trusted Advisor” to their customer? Customer Success has emerged as one of the most important functions in software businesses, for good reason: renewals, expansion, reference-ability, Net Promoter Score (NPS) are the lifeblood of software organizations with subscription revenue models.
Yet, when customers ask for a multi-year Product Roadmap, how often do they hear, “well, we’re working on that,” “it’s evolving,” and “we don’t share that for competitive reasons.” So organizations want to be a Valued Partner or Trusted Advisor. They want their customers to renew 95% of the time, increase their footprint by 20% per year and give an NPS score of 9 or 10, yet the Valued Partner can’t even tell them what the future holds?
Jump in the car, and make yourself comfortable; oh yeah, sorry that the child locks are switched on so you can’t get out; we’re going on a great trip, and I’m figuring out our route as we go. Just trust me.
Clearly, the roadmap will change as new competitors and technologies emerge, customers share their feedback, and business needs evolve, but there should always be a Product Roadmap in place.
It’s fine to have the infamous technology caveat – “Product Roadmap Subject to Change” – at the bottom of the Roadmap slide(s). It’s not totally fine to say trust me, or I don’t know yet.
The Company and Investors…
In much the same way that career plans and product roadmaps evolve and change, so do financial markets. We’ve seen revenue multiples decrease from 15x to 5x for many software companies in late 2022. We’ve seen economic growth projections drop even more on a percentage basis.
So clearly, business plans need to change too, and the driver and the passenger (investor and management this time) need to be on the same page with the investment level for growth, the expense profile/budget, and how this translates to future financial expectations, company value, and exit strategy.
While I would argue that exit strategy shouldn’t matter to customers and most employees, it does matter to private investors, and 95% of software companies are private. These investors have to answer to their customers – pension funds, endowments, sovereign wealth funds, and insurance companies – looking for a return on their money within a certain period of time.
The same is true for founders who usually have angel investors, some of whom may be related and even more demanding, to whom they need to provide answers about financial return and timing. Similarly, value expectations are essential for institutional and retail investors in the public markets.
With all this said, I can’t tell you how often I have been in situations where investors and management are not on the same page as the world around them changes.
Last car metaphor…
The driver thinks they’re going to Disneyland in California, and the investor thinks they’re going to Disney World in Florida. Both parties are focused on good times or returns, but Florida is a very different outcome than southern California.
There is also the possibility that floods, storms, or construction projects have impaired roads or bridges on the original route. Yet, often, the investors or management still think that the destination, time of trip, and route (value, timing, return) are the same.
Like career plans and product roadmaps, this business model alignment must happen every quarter. There is a clear process for this in the public company world with quarterly earnings releases. It’s not always as regimented with private companies. The world changes too quickly and is too dynamic not to reaffirm the destination and the directions to get there every three months.
This doesn’t mean there has to be a dreaded re-planning process every three months. Much like the career GPS framework, this can be a conversation-heavy, excel-light process, but getting back on the same page with respect to growth, profitability, company value projections, and exit plans, if applicable, over the next three years is essential.
(image: Unsplash)
The Checklist and Truism…
Here is a simple checklist and one of my favorite sales truisms:
- Ensure that every employee discusses their career plans with their manager once every three months
- Have a 3-year product roadmap that can be shared internally and externally at all times
- Have investor-management alignment once per quarter on a high-level, 3-year business plan with expected company value at the end of every year
And the Sales truism: Plan the Work and Work the Plan.
We would all agree that using a GPS is a smart thing to do, especially my eldest daughter who would have rather not turned a 4-hour car trip with her father into a frustrating 6-hour one.
Bon courage in 2023 and beyond!
About the Author: Mike McKee
