How to Communicate Strategy with the Strategy Steps Canvas

Richard Lawrence

At the Humanizing Work company, we’re pretty big fans of splitting things down into very thin slices. Our story splitting poster, techniques like Feature Mining, and our 80/20 Product Backlog Refinement course are all evidence of that focus. But if those thin slices don’t accumulate into a meaningful impact, it doesn’t matter how beautifully clever our splits were.

Peter Green

We need clear ways to conceive of and communicate about the big things, and for this, we turn to three related, cascading ideas: Mission, Vision, and Strategy. There’s nothing groundbreaking here, but many organizations struggle because they haven’t clearly articulated all three concepts in concrete and meaningful language. In Episode 124, we shared our approach to crafting mission and vision statements that are actually useful, not just corporate-speak. And, in this episode, we’ll share how to communicate clearly about strategy using the Humanizing Work Strategy Steps Canvas.

Richard

But first, this show is a free resource sponsored by the Humanizing Work company.

Humanizing Work exists to make work more fit for humans and humans more capable of doing great work.

Peter

To that end, we do training and coaching in three areas:

1. We help leaders lead empowered teams and individuals more effectively, including how to more effectively create and communicate strategy.
2. We help product people turn their ideas into good visions, product strategies, experiments, and backlogs.
3. We help teams collaborate better to produce meaningful outcomes on complex work.

Richard

If you or your organization would benefit from better leadership, better product management, or better collaboration, and if you find our vision for human-centric work compelling, we have capacity to take on a few new clients in 2024. So, visit the contact page on humanizingwork.com and schedule a conversation with us.

Peter

Ok, let’s talk strategy. Fun fact: the term strategy was not used in a business context until after World War II. Prior to that, it was only used to describe military and political plans. In fact, the word strategy comes from the Greek word for general: strategos.

These days, we see strategies being created and deployed everywhere in business, from corporate strategy to product strategy and seemingly every initiative in between. If we’ve got a business objective, we recognize the benefit of crafting a strategy for how to reach that objective.

Richard

As we’ve worked with executives and product leaders over the last several years, we’ve seen a lot of variations in how their strategies are derived. But we’ve also noticed that there are a few aspects that show up in every great strategy, so we’ve developed a way to visualize those things in a simple canvas form. If you only have one slide in your next strategy deck, make sure it’s this one.

We call this visualization the Strategy Steps Canvas, because one component of great strategies is that they outline a few big steps to get from where we are today to where we want to be in the future. For some reason, the number of steps is almost always three, which I suspect is some result of how our brains deal with the uncertain future: the next big step is pretty clear, the step right before our vision is realized is pretty clear, and then there’s something in between that, that connects the two.

Peter

Each step contains four sections: who we’re targeting at that step, what we’ll deliver for them, what we’re deliberately saying no to at that step, and what big uncertainty or risk that step will tackle. That’s it. Then, to connect those steps to the desired outcomes from the strategy, we have two statements describing how each step creates a flywheel of more and more impact for customers and a flywheel of more and more economic benefit for the company.

To illustrate the canvas, we like to create one based on a blog post about Tesla’s strategy by Elon Musk from 2006. For all of his many faults, Elon is pretty good at vision and strategy, so it makes a good example.

Richard

The context for that blog post is an outsider missing the connection between Tesla’s mission and Tesla’s strategy. Their widely shared mission at the time was to accelerate the mass market adoption of sustainable transportation.

Peter

That, by the way, is a killer mission statement. Like I said, it’s one of Musk’s superpowers.

Richard

But the first car Tesla announced, the original Roadster, was a 2 seat sports car on a limited production run priced in super-car territory. Not mass-market by a long shot. So someone tweeted at Elon something like “Way to go mass market with your super expensive, limited run sports car! Really saving the planet with that one!”

Peter

Then, Elon, being Elon, responded by publicly laying out Tesla’s strategy in a blog post called “The Secret Tesla Motors Master Plan (just between you and me).” In that blog post, he explains how the Roadster is just step one in their strategy, what the next two steps would be, how taking those steps one at a time is really the only way to achieve their mission, and how even at step one, customers buying their product will have a positive impact on the environment.

Richard

Now, Musk didn’t use our strategy steps canvas, but we’ve derived one from the blog post, so let’s go through it.

Walking through the canvas, we start with the impact flywheel:

Even at step 1, customers move closer to carbon-neutrality. At each step beyond that, more and more people are carbon-neutral or even putting more energy back into the system than they consume in transportation.

Peter

Note that this isn’t just about the impact at the end of the strategy. It’s about how each step produces more and more impact.

And while making the world a better place for customers is critical for success, so is a business model that generates profit to sustain that impact over the long term. The business or economic flywheel summarizes how the steps make economic sense, often how step 1 generates more resources to make step 2 possible, and so on. Here, it’s:

Revenue and Word-Of-Mouth from the first step generates additional investment in each successive step until, after step 3, the company is profitable.

Richard

So those two boxes explain how the stepwise approach makes sense for the mission of the company and the economic realities of the company.

Then, the three steps in this strategy are as follows:

The Roadster

Then, the Model S plus the Supercharger network

Then, the Model 3

Of course, they weren’t called Model S and Model 3 in the original post. Those names came later. It was originally, in Elon’s words, “an affordable car” and “an even more affordable car.”

Let’s go into detail on each of the three steps.

Step 1, the Roadster, was about testing whether an electric car would be a fun, exciting product rather than just an environmentally friendly one like other EVs had been. To do that test, Tesla went after a small target market that wasn’t price sensitive, where the car didn’t need to be a daily driver. And they didn’t even build the whole car themselves—they put an electric drivetrain in a Lotus Elise. This is a great example of keeping step 1 really focused on resolving a core complexity.

Peter

Step 2 was what became the Model S and Supercharger network. This one was about resolving the complexity around Tesla building a car themselves and then dealing with the “range anxiety” dynamic that had kept EVs from becoming mass-market daily drivers. Again, they stayed fairly high-end, which left some space to work on that complexity without having to drive down production costs.

Richard

Finally, at Step 3, what became the Model 3, was about getting economies of scale and taking on mass-market automakers for that daily driver job.

Notice that the Model X and Y SUVs aren’t on the strategy canvas. They weren’t part of the original strategy and they’re kind of extensions off steps 2 and 3 to take advantage of adjacent markets while working on the same complexities. The strategy canvas isn’t a roadmap. It’s a high-level view of the major steps towards a vision, with a focus on sequentially resolving complexity while growing impact and economic benefit.

Peter

Using the canvas, it’s easy to communicate the “why” of each step, and how each step addresses the biggest uncertainties in any long-term plan. It’s the elevator pitch version of your strategy, which may be all the time you get with a key stakeholder.

Richard

And during implementation, this helps keep the work at each step focused on what really matters there instead of expanding. That’s critical. It’s just enough big picture detail to create confidence, focus, and motivation, while allowing tactics to emerge as people take action and learn more.

Peter

Being able to boil down the strategy to just the essential parts makes all the difference. After all, if everyone can’t align and remember it, your strategy may as well not exist.

You can download a free PDF of the Strategy Steps Canvas on the episode page. That PDF has the Tesla example and a blank version for you to experiment with. We hope it helps you formulate and communicate about your strategy more effectively! Thanks for tuning in.