Strategy First!

As a startup seeking collaboration with larger corporations, aligning with their strategic priorities is vital. The approach to setting these priorities varies across companies. In smaller firms, strategies are often shaped by visionary founders or co-founders. Larger corporations, however, typically rely on dedicated teams to identify and prioritize strategic initiatives. The complexity further increases in large organizations with multiple business units, each having its own strategy team focused on specific areas. Understanding these dynamics is essential for effectively engaging and aligning with potential corporate partners.

For any organization pursuing inorganic growth, crafting the right strategy is crucial. Companies that succeed are those that can accurately forecast future scenarios, identify growth opportunities within them, and allocate the necessary resources to seize these opportunities today. Any misstep in these areas can lead to wasted resources and a suboptimal strategy. To increase the chances of success, it is imperative to implement robust frameworks and processes that guide the development of strategic priorities.

The strategy development process begins with determining potential “world state” scenarios within a company’s ecosystem. These “states” are based on current trends, insights from internal leaders, and input from startups looking to disrupt the industry. Brainstorming sessions with the strategy team, executive leadership, and other stakeholders are conducted to create and evaluate several potential “world states” and their likelihood.

Once these “world states” are established, the corporate strategy team explores the various opportunities that could arise from them. Mini business plans are developed to assess the resources needed and the potential size of each opportunity. Frameworks are then applied to balance risk and reward among other factors, ranking these opportunities for prioritization.

The final step involves prioritization sessions with business unit leaders and, ultimately, the corporate executive team to finalize the ranking of these initiatives and begin resource allocation, reach out plans (if involving targeting other companies), and an executive sponsor or sponsors for each of the initiatives.

These strategic efforts require significant time and resources across the organization. However, when executed properly, they greatly enhance the chances of identifying and developing sustainable growth opportunities. Conversely, without a robust process, companies risk missing opportunities or pursuing the wrong ones, leading to millions or even hundreds of millions of dollars in misallocated capital and resources.