The definition of strategy and how to nail yours
Entrepreneur and CEO of Metronome Growth Systems, Shannon Byrne Susko, created the 3HAG WAY in order to save her first tech company Paradata.
“In fact, I ended up betting my position as CEO on this framework, and it paid off in a big way."
Instead of her previous method of “wild ass guesses”, Shannon gutted out a strategy that turned her company around so successfully, it was bought by a competitor.
Here, excerpts from our interview with Shannon on key lessons in strategy, and creating a 3-year Highly Achievable Goal (3HAG).
In Shannon's words:
Michael Porter's definition [of strategy] is the one I still use today:Strategy is the creation of a unique and viable position through a different set of activities.
I always add, a different set of activities that you decide upon, and it's the set of activities interdependent that make a difference.
We want to get on to a dimension where we're really not competing with anyone else. We want to be in our own dimension where our core customer will buy from us at a profit always.
After 15 years of research, we know the foundation of strategy is your core customer. It's knowing who it is, right down to the person who's going to make that decision to buy. That's where we always start, and we always confirm no matter what, each and every quarter.
The next step is then looking at the whole industry, not just about your product or service, but the whole industry and come up with the characteristics of that industry. Some people get stuck there, but it's really brainstorming, what are the things that matter in the whole industry?
You want to rate your company: Where is it right now on a scale of one to five? Your top, at least top two, competitors; rate how they serve those characteristics [that matter in that industry]. You quickly get a view… one of the best views.
One of my favourite things to do now with clients is have a look at whether their company is in white space today: Do they need to protect it or are you actually competing on the same dimension as others and there's white space to move to?
To move to that white space three-years from now, what are the things they would need to do in order to move there, and would it be valuable in the eyes of our core customer? Maybe that space we're going to move to doesn't matter to our current core customer.
(Image: The attribution map, from 3Hag Way)
I'm hugely picture oriented, so this tool is called the attribution map. It's actually well laid out in 3HAG WAY. It's my favourite tool of all time. If you walked away with anything today, that is a tool I would recommend using.
From there, we want to work with our team to brainstorm, how could we make that three-year highly achievable goal line in the map true? What would we have to do? What are the big milestones we'd have to achieve? These are the things we get to decide, that become our differentiators, that set of differentiating actions.
I hate the word budget. I prefer a 36-month rolling forecast, made into a process that is done every month. There is a locked-in 12-month forecast, and that includes sales all the way through to a cash first forecast. We forecast the cash first and work our way back up.
The key process flow map is the absolute foundation of 3HAG WAY. It keeps it as a scoreboard and the accountability of the team to who owns what, and how we're going to make money? At the end of the day, it's about making money.
Shannon’s GREAT EIGHT, answers to our eight getting to know you questions:
Recommended book: Good to Great by Jim Collins and his Turning the Flywheel: A Monograph.
If you could co-author a book with anyone in the world who would it be, and what’s the book title? Jim Collins because I really feel that the flywheel was about momentum and creating your execution, so you can extend it all the way out of course to BHAG. In order to make it real, put 3HAGs in the middle. I don't know what the book title would be, but I think collaborating with Jim would be amazing.
Best piece of advice you can share? Commit to the process. Commit to growth. It's iterative. This is systematised. We learn it over many, many months and many years. It's experience-based. You just have to start somewhere. I always use the phrase, gut it out. That's where you need to start. Gut out your 3HAG, and continue on validating it and making it real.
What's been your lowest moment, and how did you recover from it? I think my lowest moment was …four years into my first business. We had raised a lot of money. We had a lot of people backing us. Honestly, when you're working 100-hour weeks and you think that all the monkeys are on your back, I just kept reading books over books, four books a week looking for the silver bullet. That was my absolute lowest. I think really challenging myself, could we find a way out the other side and actually achieve what we said we would? That was the dope that you have. You feel pretty lonely as a CEO. The group that I was a part of, I was part of a CEO round table, amazing group of people in order to just keep us moving forward to get through that. It's that time of desperation. It's actually why I do anything today. I'm retired. A lot of people laugh at that, because my passion now is to ensure no one was as desperate as I was in that moment in time.
How do you relax? I've got one full Ironman. I've done half Ironmans. I just keep booking them in. That's my meditative state. It's just a way to get up from the end of your day and get away on your own. A lot of people don't think that's relaxing, but I definitely do.
What’s a fun fact that’s not widely known about you? I drove a taxi in Whistler, British Columbia. When you're a ski bum……that was one of the other three jobs I'd kept, ski school, taxi driver and bartender.
What do you think is the secret of success? A team that was as committed and gritty about the win as I was.
What is your prediction for 2025? I think for all entrepreneurs out there, you've got to be able to have forecasted your cash that far. You need lots of cash in the bank actually for what's going to happen in the marketplace. Everyone I've coached today and even within your own personal lives, we need to be looking at what do we have in the tank out that far. That'd be my best prediction. We're going to need some cash in 2025.
Members of The Growth Faculty can hear or listen to the full interview with Shannon Byrne Susko as she describes how she saved her company, and created another from scratch, using the 3HAG WAY framework. Simply log in to On Demand.
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