Builders Operating Practices: Long-Term Planning & Strategy
By: Katharine Hersh & Tripp Baird
At Builders we begin with purpose. Defining core ideology of Purpose, Values and Vision is the first step in creating a high performance, ethical and enduring enterprise. Purpose is also integral to the strategic planning process, aligning the long-term vision and values of a business to its medium-term goals and decisions, and ultimately near-term execution. Purpose can provide the foundation for long-term strategy and growth by:
- Providing meaning
- Inspiring people to higher levels of performance
- Influencing decision making
- Empowering people to act without asking permission
- Attracting people with integrity and talent
- Developing trust and commitment
- Building organizational character
In high performing organizations, strategy is a purpose-driven, active process evident at all levels of the organization that guides decision-making and implementation. This is counter to a more traditional approach in which strategy conversations are relegated to an annual review and planning process primarily focused around capital allocation. In purpose-driven organizations, business planning and review processes are continuous, with opportunities to integrate feedback, reflection, and learning on an ongoing basis. This requires open communication among management, employees and board members, including the ability to challenge core assumptions about a company’s operating model, customers, competitors, and growth opportunities. The team and the board must be able to candidly evaluate what is working and what is not, remembering that strategy is also about what you choose not to do.
In Builders’ experience, an engaged and dynamic board of directors and advisors can amplify organizational purpose, holding the tension between long-term aspirations and short-term realities, as well as integrating the perspectives of multiple stakeholders. Boards can play a critical role in aligning strategic intent throughout multiple levels of an organization while also empowering management to learn and adapt to change. Below we share several best practices of purpose-driven strategy in action we have witnessed among our portfolio companies.
Beginning a Partnership: Acelero 100 Day Plan
How a partnership begins matters. Before making an investment, Builders co-creates an Operating Blueprint with management teams, identifying the core value creation strategies we collectively agree to implement together during our investment period. This long-term vision is then translated into concrete results that can be implemented in the first 100 days post-close.
Following Builders’ investment in Acelero Learning in September 2022, the company embarked on a 100 Day Plan focused on building sales and productization capabilities in alignment with its mission of accelerating child and family outcomes nationwide. The team made key hires and acquired the assets of VORT Corporation, an educational publisher of family-centered, curriculum-based assessments for infants, toddlers, and preschoolers.
Throughout the 100 day period, Acelero co-created an inclusive process to drive change and accountability at all levels of the organization. The company had not previously embarked on a dedicated transformation effort of this scale, which required integrating strategic insights elevated by Builders’ investment with ongoing company priorities and developing new muscles around communication, rapid decision-making, defining milestones and results, and prioritization. A number of 100 day plan priorities have been extended into the 2023 budget and operational plan, and will be revisited in a dedicated strategy session later this year, demonstrating a dynamic approach to learning and implementation.
Navigating Change: PosiGen Strategic Working Group
During times of significant growth and change, companies may benefit from establishing a working group dedicated to driving ongoing results and navigating a rapidly evolving external environment. In early 2022, following the close of PosiGen’s Series E, the company formed a small Strategic Working Group focused on addressing the most pressing operational issues facing the company. This subset of the team and the investor group meets monthly to review key KPIs, discuss new market expansion opportunities, budgeting and hiring priorities. The group is focused on elevating the voice of the customer towards achieving its mission of making solar affordable for every homeowner. During this time, PosiGen has entered 4 new markets, providing access to solar energy to over 13,000 low- and moderate-income customers.
Aligning Stakeholders: Traditional Medicinals Purpose, Values, Vision
Traditional Medicinals is a 50 year old herbal wellness tea business positioning itself for future decades of continued growth and impact. As part of its long-term strategy, the company refreshed its purpose, values, and vision statements in order to deepen its purpose-driven market position to differentiate its brand identity amidst an evolving landscape and continue to drive intentional growth and positive impact on the world. In addition to engaging with the Board of Directors and an outside brand agency, the company surveyed employees to incorporate their input and ultimately build cohesion and shared vision around the organization’s purpose.
As a result of this process, Traditional Medicinals recently published a social business charter, outlining commitments including: protect the planet, protect the plants, nurture interconnection, make products with integrity, invest in communities at the source, equip our people to be well, expand access to herbal medicine, and hold ourselves accountable. These commitments are driving long-term growth strategy, marketing and branding, and guiding supply chain initiatives.
Taking the Long View
As these examples demonstrate, purpose can animate strategy and enhance long-term planning. Strategy as a living practice exists throughout a company’s life cycle, from initiating a new investment partnership, navigating periods of growth, and steering long-term direction. Purpose can be particularly powerful in aligning stakeholders including employees and customers and in building resilient organizations that can thrive and adapt to change.
This is part 2 of the Builders Operating Practices Series. Part 1 (Introduction) can be read here.
