Oct 16, 2023
From raising capital to originating assets for our fund to working with clients to hiring people, there is a common theme. That theme can be summed up in a single word,– “strategic”.
So many people that I meet and talk to want to jump straight into tactics – What action should I take? What thing should I do? What course should I pursue? – without ever having given much thought to how, and whether, a particular choice ties into the larger overall direction. There seems to be so much uncertainty and confusion over what strategy really means, how to develop one, and how to tie specific tactics back to that strategy. To understand the difference between a tactic and a strategy, let’s review a brief definition of each. As Chet Holmes describes it in his great book “The Ultimate Sales Machine,” a tactic is a method or technique used to achieve an immediate or short-term gain. An ad or direct mail piece to get leads, a sales call to make a sale, attending a conference to meet potential clients and get leads – these are examples of tactics. A strategy is a carefully defined and detailed plan to achieve a long-term goal. It is the overall impact, the ultimate position you would like to achieve in the market.
Having a clear vision and strategy greatly helps clarify decision making and choices around activities, actions and tactics. If you know where you are going and have an overarching strategy, then everything you choose to do should tie back into that strategy in some way. Anything that doesn’t meet this criterion should be avoided at all costs. The fact is that you have a choice of how to spend your hours and days. How you spend them drives what direction you go over longer time periods – weeks, months, years, and ultimately a lifetime. If you act haphazardly based on the latest whim, fad, thought, person that comes along (without thought as to how and whether it comports with your vision and strategy before acting), then your results might be haphazard and disjointed. Having a clear strategy acts as a filter to your daily choices. It makes it easier to say “no” to something, which often is more important than saying “yes”.
Ideally you want to leverage everything you do as much as you possibly can. Each tactic and action should attempt to achieve multiple strategic objectives, not just one (or worst yet none). There are many aspects of running a company and a fund – originating loans, managing assets, raising capital, operations and administration, underwriting and processing, hiring people, preparing budgets and financial results, etc. These functions do not have to exist in silos, but rather should be integrated as much as possible so as to leverage your time and efforts. If you think strategically and not just tactically, you will likely get more value and impact out of everything you do. Each area of your business can feed off each other area (within limits) typically far more than people expect.
To quote again from “The Ultimate Sales Machine,” to think like a brilliant strategist, you will design and combine your tactics with the long-term strategy in mind. In addition, Chet says, you will constantly ask yourself and your team, “How many strategic objectives can we accomplish with each tactic?” His belief is that you can achieve 10 or more strategic objectives with each tactic. We believe that by disciplining ourselves to only engage in tactics that we have deliberately chosen based on the criteria that each one must tie back to our strategy and contribute heavily toward it. Then we measure the results compared to our expectations going into it and evaluate whether it is worth continuing, modifying, or discarding as a tactic. However, we do not engage in any tactic without first filtering it against our strategy and trying to determine how many strategic objectives we think it can achieve. In short, vision (which I have mentioned here but not elaborated upon) drives strategy which drives tactics.
Nothing in this blog is or should be construed as investment advice or an offer or solicitation of offers of investments. Both Real Estate Investments and Securities offerings are speculative and involve substantial risks. Risks include but are not limited to illiquidity, lack of diversification, complete loss of capital, default risk, and capital call risk. Investments may not achieve their objectives. Investors who cannot afford to lose their entire investment should not invest in such offerings. Consult with your legal and investment professionals prior to making any investment decisions.