A great strategy maps a plausible path to reach a vision… and to do that in the complex domain, that path needs to be made up of concrete steps that test our big, risky assumptions.
Most organizations invest heavily in strategy to gain alignment—only to see those plans fall apart when complexity enters the picture. In this episode of the Humanizing Work Show, Peter Green and Richard Lawrence share a better way to build product strategy—one designed for complexity.
They introduce the Strategy Steps Canvas, a lightweight tool that helps teams chart an adaptive, value-driven path from current reality to a compelling vision. Along the way, you’ll learn why most strategic plans fail, how to avoid wasting time on over-specified roadmaps, and what Netflix can teach us about strategic evolution.
Whether you’re a leader, product manager, or team member looking to connect daily work to long-term impact, this episode will help you rethink how you approach strategy in complex environments.
Resources from the episode:
- Strategy Steps Canvas (Free Download) with Netflix Example Walkthrough
- Ep 124: How to Craft a Vision Statement That’s Not Just Corporate-Speak
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Connect with Humanizing Work: https://www.linkedin.com/company/humanizingwork
Episode Transcript
Peter: Welcome to the Humanizing Work Show. I’m Peter Green.
Richard: And I’m Richard Lawrence.
Peter: A while back I was participating in my first high level strategy offsite as a newly promoted group program manager. The kickoff on Monday had been focused on what was going on in the current state around us, what was happening in our market with our competitors, our customers, our technology.
And some discussions about recent changes to the organization. Then on Tuesday, the general manager facilitated a pretty nice workshop to align on purpose and vision, and then talk about how that cascaded to various team missions. It was really well done and energizing. On Wednesday, we broke out by department to create a map between the current state that we described on Monday, and then the vision that we talked about on Tuesday.
And then finally on Thursday we came back together to connect the dots, and I was excited to see where the conversation would go. So far, everything was really engaging and I thought we were making good progress that would inform our plans for the next release. The product group presented first and they walked us through a pretty detailed feature roadmap that spanned multiple releases.
I thought to myself, they, they must have been working on this prior to the offsite. They must have been to a few of these and known how they go. Next up, the CTO shared a multi-year architectural roadmap and I started to see a pattern. These execs knew what to expect and how to frame their plans through the lens of this strategy offsite.
Marketing went next and they presented a go to market launch strategy for the features on the product teams roadmap, along with a much awaited brand refresh. And they definitely had coordinated this with product ahead of time. Then the rest of the day turned into a long working session to integrate everyone’s plans into one unified company strategy.
What I thought would be an emergent discussion about how to close the gap between our current state and our desired future state turned out to be a detailed analysis of dependencies, resources, and milestones laid out across quarters and years. The more we worked on it, the more detailed and complicated the plan became.
Richard: Hmm. Yeah. Complicated. To put this in terms our audience would be familiar with, those leaders were acting as if they were in the canon complicated domain. The assumption that was at play seems to be if they just coordinated and planned well enough, they’d have an effective strategy that then could cascade down into the organization.
Trouble is, we’ve never seen a company whose strategy sits all in the complicated domain building. Big, new, innovative things always lives in the complex domain. So a complexity aware approach to strategy isn’t gonna involve detailed analysis and planning way out into the future. When things are complex, we need probes, concrete changes that cause new information to emerge.
That’s why we built our Strategy Steps Canvas. We still need a plausible description of how to move from our current state to our vision, but we need to frame that through the lens of complexity.
Peter: Today we’ll walk through that canvas and show how it helps describe a path to our vision in the face of real complexity, and we’ll use Netflix as a case study along the way.
Richard: Before we do, a quick reminder that this show is brought to you by the Humanizing Work Company, where we help organizations improve leadership, product management, and collaboration in the face of complexity. If you want better results in those areas, visit our website, humanizing work.com and schedule a conversation with us.
Peter: And if you wanna support the show, please subscribe. Like the episode, click the bell icon to get notified of new episodes and drop a comment. And if you’re listening on your favorite podcast app, a five star review goes a long way.
Okay, so a great strategy maps a plausible path to reach a vision and to do that in the complex domain, that path needs to be made up of concrete steps that test our big, risky assumptions.
And you can’t do that without getting really clear about the two end points on the strategy, the detailed description of the current state at one end, and the vivid vision that shows where you’re trying to go at the other end,
right? If you’re unclear or not aligned on either of those, your strategy’s not gonna be effective.
And that’s why we use something that we call the Five Forces Framework to align on the current state. Each of the five forces invite a different perspective on what’s going on in the organization. If you want us to share more about that tool, let us know in the comments or shoot us an email or a message on LinkedIn.
Richard: And we walked through our method for creating a vivid vision that’s not just eye rolling corporate speak back in episode 124.
So check that out if your vision is feeling a little blah or if you haven’t even done one.
Peter: Okay. With the current state and the future vision Clear. We’re ready to devise a complexity aware strategy.
Richard: The Strategy Steps Canvas is our tool to have a better version of that conversation about strategy. It’s lightweight and purpose to avoid over analysis and focus attention on what matters most.
Moving in clear concrete steps towards our vision with each step, testing a core complexity, an assumption about the world, our customers, our technology. That must be true for the strategy to work.
Peter: Right, and each of those steps needs to accomplish three jobs. First, it needs to deliver some value. We’re not gonna assume our business has infinite capital.
So each step has to make sense economically. Second, each step tests a key assumption that must be true for our strategy to work. And third, each step must deliver some positive impact for our customers. We’re not interested in strategies where each step lays some groundwork for a future step, where eventually you’ll get business value and customer impact.
That just delays feedback and revenue, and that’s rarely a good strategy.
Richard: And at each step, we describe four components of that step. First, what. What are we offering our customers? Uh, what product, what service, what feature? Some combination of those things. Second is labeled who, which customer segment are we serving in this step?
Who needs to adopt what we describe in the what? It’s a common for a strategy to address increasingly larger customer segments at each step. Next, we have a section called what, not what are we explicitly not doing yet or ever? And we found this really useful when communicating about strategy. What are, what are the constraints around this step and, and why are we choosing those at this point?
Finally, we name the core complexity associated with that step. What’s the riskiest, most uncertain assumption that this step is going to probe? The what section should be the minimum thing we could do? That would test that core complexity, deliver value to the business and impact the customer as we described in the WHO section.
Peter: And then spanning the three steps, we have two additional boxes labeled impact flywheel and economic flywheel. We don’t do these as individual boxes per step, but as a general theory of how the steps fit together in a flywheel of increasing customer impact and economic impact, the canvas serves to create alignment, increase focus, and keep us honest about what we still need to learn.
It creates a simple visual to aid in telling a believable story about how we’re gonna get from where we are to the vision without pretending we know everything upfront.
Richard: Let’s illustrate how to actually use the canvas with Netflix as an example. Netflix co-founders, Reed Hastings and Mark Randolph had a pretty simple vision when they first offered a subscription back in 1999.
Make movie rentals easier, cheaper, and more convenient than Blockbuster. They recognize the potential of the internet to disrupt that industry and the business benefits of a subscription model over a per movie rental fee, supplemented by late fees. In interviews, Hastings has stated that in the early two thousands with the internet getting faster and faster, they realized they’d eventually be able to stream movies online, but they didn’t know how fast that capability would become widely available.
So they focused on making the personalized recommendation engine for movies really good, and the logistics of mailing DVDs fast and cheap in order that they’d be ready to pivot to streaming once it became viable. He says that’s why we called the company Netflix, internet movies, even though we were shipping the movies by mail around that time, their mission evolved and to not just be about Blockbuster, but it was, we exist to entertain the world.
So we’re gonna step back to an imaginary meeting at Netflix company headquarters where Reed Hastings is describing how they’ll grow that company from the current state where Blockbuster is still the king. To the vision of entertaining the world using the Strategy Steps Canvas.
Pretend Reed Hastings: Thanks everyone for being here.
Our customers are tired of heading the Blockbuster to get the newest release, only to discover it’s sold out and they have to settle for their third or fourth choice. Then they get to the counter to rent it and then discover they’ve got a $20 late fee they have to pay because their partner returned the last movie late and didn’t tell ’em.
We see a future where those problems are at distant memory. Anything you wanna watch is available on demand immediately. All part of a subscription that’s less expensive than renting one movie per week. Here’s how we’ll get there. Our first step, what we’ve labeled next, is to offer a subscription service where people can get a DVD mailed to them overnight.
In most places of any movie they wanna watch, they keep it as long as they want and send it back when they’re ready to check out their next one. In this step, we’re targeting the US because of its reliable and inexpensive mail service. And we wanna go after people with a Blockbuster membership that are already shopping online for other things and are tired of Blockbuster’s limitations.
At this step, we’re intentionally not going after streaming. While bandwidth is growing, at rates, approaching Moore’s Law, we’re not there yet, and we’ll need a serious subscriber base in order to fund the investment required to build that kind of streaming service. We called it Netflix because we know that eventually we’ll offer internet based flick.
But for now, the net in our name can stand for not yet. There are a few big risks at this step, including the logistical challenges of shipping the DVDs and making a useful website to find movies you’ll love. But the biggest risk at this step and the one we’re testing with our subscription terms, no late fees, unlimited rentals, all for a flat monthly fee is related to habit change.
We need to have good movies and ship them fast, but people are used to having this conversation on the weekend that goes something like this. What do you wanna do tonight? I don’t know. How about you? I don’t really feel like getting dressed up and going out, but I do wanna do something fun, eh? Should we run a movie?
So at step one, we can’t compete with that spur of the moment. Trip to Blockbuster. So we need to change people’s habits to the subscription model where they’ve always got a good movie to watch or one in the mail that they’re looking forward to. Can we cause this habit change? Assuming we can succeed at that, then we move on to step two.
Then on the canvas where we begin streaming online, here we shift our business from shipping DVDs to streaming commercial film and tv. We target more tech savvy users with sufficient broadband to stream without incurring bandwidth fees. While licensing content is expensive here, we need to test the core complexity of a streaming business.
Can we stream commercially available film and TV at a sufficient quality to make the experience rival that of watching a DVD? Assuming we can make streaming a viable way to consume commercial, film and tv. At step three, we remove the licensing costs and risks and become a production studio ourselves.
At this step, we are going global with our offering. Our goal here will be if you’ve got the internet, you’ve got Netflix on your device. We’re not doing user-generated content at this step. We want to own the content. The core complexity here is can we produce content that meets or exceeds the old school film and TV studio quality, and can we do that at a cost that’s viable for our business?
As we move through these steps, we wanna consider two key criteria for each and every step. First, each step needs to entertain more customers, and each step needs to help the business thrive economically. Here’s how that works for customer impact. Even at step one, movie watchers get more convenience and choice than they got from Blockbuster.
Moving through steps two and three, more consumers get more variety, more personalized to their preferences at a marginal, predictable cost. From a business standpoint, each step attracts more subscribers providing financial runway to invest in the streaming technology, which drives down delivery costs, allowing us to invest in content production.
At step three, we get more economies of scale at each successive step. So that’s our strategy, and we’re really excited about using that strategy to achieve our vision of entertaining the world.
Richard: The Netflix example does a nice job of highlighting a few important characteristics of the Strategy Steps Canvas approach.
First, by calling out the core complexity at each step, everyone in the company knows what to focus on and what’s at risk. Even when they’re making small day-to-day decisions, a developer, a marketer, a financial analyst, or anyone else can ask which option helps us test the core complexity better. Not every decision will be related to that, but enough of them are.
That removes one source of friction around prioritization. Second, it provides just enough of a narrative of how we get from the current state to the vision, but without over constraining the details. And it doesn’t describe every feature, every dependency, every milestone along the way just gives high level details that are needed to understand how we’ll test that core complexity at each step.
And third, the canvas ensures that we don’t spend time on bricklaying steps where we’re building out infrastructure tools before we validated that we’ll need them. Each step has concrete business value, customer benefit, and risk reduction.
Peter: Leaders and managers at all levels should be able to explain the current strategy to their teams.
It’s motivating to see why the task I’m working on today. Moves us toward a bigger outcome. And when making prioritization decisions, it gives a clear filter to apply to many of the options we might be considering. So whether you’re responsible for creating strategy or just communicating about it, the strategy steps, canvas can help you get those benefits without unneeded and overly constraining details.
Richard: We hope this helps you think about strategy in a more complexity aware way. Check out the episode page for this show for more, including a link to download a free blank Strategy Steps Canvas, as well as the Netflix example and a couple other examples we’ve put together from Adobe and Amazon.
Peter: Thanks for tuning in and we’ll see you next time.
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