{"id":10543,"date":"2022-02-17T12:23:31","date_gmt":"2022-02-17T17:23:31","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=10543"},"modified":"2022-02-17T12:28:37","modified_gmt":"2022-02-17T17:28:37","slug":"blank-check-strategy","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/blank-check-strategy\/","title":{"rendered":"Blank Check Strategy"},"content":{"rendered":"

\"\"<\/p>\n

Due to organizations having limited resources (e.g. talent, capital, time, etc.), the focus of Strategy Development is often the optimization and prioritization of said resources to maximize the potential to reach its strategic objectives<\/a>.\u00a0\u00a0But what if that weren\u2019t the case?\u00a0 This is the thinking behind Blank Check Strategy<\/a>.<\/p>\n

The blank check approach takes a contrarian viewpoint. The fundamental question then becomes, what if resources were not a constraint? This compels managers to think big and not worry about resources.<\/p>\n

A blank check is a metaphor the freedom of a team or business is given to determine for themselves the resources they need to achieve a set of agreed-upon goals within a defined timeframe.<\/p>\n

The issue with working with confined resources is that it not only limits your plans, but also limits the creative potential of people. In other words, by removing the resource restraint, we also removing an invisible restraint on creativity and imagine.<\/p>\n

Through this approach, business leaders, instead of defining budgets and resources, focus on defining ambitious goals. Then, they leave it to their managers and teams to request for resources needed to achieve these goals.\u00a0\u00a0Many organizations that have embraced this approach managed to achieve astounding results.<\/p>\n

When teams decide their own budgets, they feel more accountable, empowerment, and ownership.\u00a0 They are thus inspired to achieve more ambitious, stretch goals.<\/p>\n

It is critical to under that\u00a0a blank check is not a license to spend without restraint, guidelines, or consequences.\u00a0 To effectively apply the blank check approach, there are several important principles that should be followed.\u00a0 In other words,\u00a0blank checks offer freedom within a framework.\u00a0 There are still rules to ensure these initiatives remain aligned with our Strategy and product results.<\/p>\n

One of the most important important guiding principles is to seek to drive the Virtuous Cycle of Growth<\/a>.\u00a0 What this means is\u00a0a blank check initiative needs to have the potential to produce sustainable, continuous, profitable growth<\/a>.<\/p>\n

The Virtuous Cycle of Growth follows 5 key phases, as captured on this slide below.<\/p>\n

\"\"<\/a><\/p>\n

Each phase of the cycle emphasizes an outcome and the means to achieve the outcome.\u00a0 These phases must be followed with rigor to ensure that the blank check initiative does not veer off course and achieves sustainable growth.<\/p>\n

The Virtuous Cycle of Growth is based on the foundational premise that the more you grow revenues and reduce costs, the more resources you then have available to invest in future growth.\u00a0 In other words, growth generates resources that drive further growth.<\/p>\n

To achieve sustainable growth that drives a virtuous cycle, the selected initiative needs to be gross-margin accretive. Margin expansion can be derived from increased revenues, cost reduction, or productivity improvements.<\/p>\n

To effectively launch a blank check initiative, we should follow the 5-phase approach to Blank Check Strategy:<\/p>\n

    \n
  1. Select the Best Big Bets<\/strong> \u2013 We should prioritize the funding of big bets that have potential growth.<\/li>\n<\/ol>\n
      \n
    1. Select the Team<\/strong> \u2013 Not all teams are suitable for the blank check approach\u2014we need to select people with the potential passion, and perseverance to transform their businesses.<\/li>\n<\/ol>\n
        \n
      1. Define Goals & Plans<\/strong> \u2013 The goals and targets of the initiative need to be clearly defined\u2014they should be quantified, aggressive, and time-bound.<\/li>\n<\/ol>\n
          \n
        1. Kick Off the Blank Check Initiative<\/strong> \u2013 After the business plan has been clearly defined and agreed upon, the organization needs to formally \u201cissue the check.\u201d<\/li>\n<\/ol>\n
            \n
          1. Monitor & Measure Results<\/strong> \u2013 Throughout implementation, it is important to set milestones for key deliverables and track performance<\/a> throughout.<\/li>\n<\/ol>\n

            Interested in diving deeper into the Blank Check Strategy?\u00a0 We have a developed a framework presentation on Blank Check Strategy<\/strong><\/a>, which elaborates on all the guiding principles, pillars to success, as well as discusses each of the 5-phases to Blank Check Strategy implementation in further depth.\u00a0 \u00a0It is a fully editable PowerPoint presentation and also\u00a0also includes slide templates for you to use in your own business presentations.\u00a0 This, and 100s of other similar business framework presentations, are found in the FlevyPro Library.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

            Due to organizations having limited resources (e.g. talent, capital, time, etc.), the focus of Strategy Development is often the optimization and prioritization of said resources to maximize the potential to reach its strategic objectives.\u00a0\u00a0But what if that weren\u2019t the case?\u00a0 This is the thinking behind Blank Check Strategy. The blank check approach takes a contrarian… Blank Check Strategy<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":10545,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[81],"tags":[2854,40,77,2855],"class_list":["post-10543","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-strategy","tag-blank-check-strategy","tag-growth-strategy","tag-strategy-development","tag-virtuous-cycle-of-growth"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/10543","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=10543"}],"version-history":[{"count":2,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/10543\/revisions"}],"predecessor-version":[{"id":10547,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/10543\/revisions\/10547"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/10545"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=10543"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=10543"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=10543"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}