How to prioritize for faster strategy implementation

Posted by on Feb 20, 2012

The hard choices of strategic prioritization

So you know you have to finally decide 
Say yes to some and let the other ones ride 
There’s so many choices, not all can be tried 
Yes you know you have to finally decide

(With apologies to the “Lovin’ Spoonful”)

In last week’s article we discussed the importance of setting a few critical strategic priorities to accelerate implementation, and the reasons why teams often neglect this important step.

This week we’ll set out guidelines for prioritization to help your team become very clearly focused on the most critical strategic priorities for your organization. Finally, in next week’s article, we’ll explain how a relatively simple process can dramatically increase your organization’s alignment with your strategic priorities.

Start by identifying your best resources for each initiative

Typically, senior teams set priorities towards the end of a planning session. We begin prioritization by having the team assign all the organization’s strategic initiatives to “leads” who will take responsibility for planning, coordinating, executing and tracking each new initiative.  These leads should be the people in your organization who are best suited to bring each initiative to a successful conclusion. We aren’t concerned at this point about overloading anyone because the priorities have not yet been set.

Develop ranking criteria

Next, we have the team develop criteria for ranking their strategic priorities.  While the idea is to get the “best bang for the buck” and to do so as quickly as possible, what that means in practical terms will be different for every organization.  We’ll describe the thinking process here, but the content will be different for every organization.

The importance of strategic themes

The criteria for ranking strategic priorities usually come from the organization’s top level objectives and a synthesis of the strategy into one or a few strategic themes.  For example, the central themes in one client’s strategy were grow revenue and grow margins.

Another client with very similar objectives reduced their strategy to a single theme.  They focused on pruning their customer base of smaller, low margin customers while replacing them with larger, higher margin customers – a theme which they called moving up the food chain.

We must emphasize that the differences in their strategic themes were not the result of attempts to “sell” the required changes internally. The differences were due to the hard choices in their strategies, their awareness of the environment, their knowledge of shortcomings of the organization’s performance relative to competitors – essentially, what they thought was the best way of achieving their growth objectives in their situation.

Both companies knew which of their strategic initiatives could be implemented in the near future and which would require a much longer gestation period, so “time to implement” did not become a criterion for them.

Fruitful discussion builds understanding

This discussion of strategic themes, ranking criteria and strategic priorities can be one of the most critical in the entire process of creating strategy because it grapples with the essence of the firm’s strategic choice.

Without this critical discussion many on executive teams won’t clearly understand the essence of their strategies. If they prioritized without this discussion they’d likely arrive at “popular” but not well-informed decisions.  As has often been said, team decision making can easily default to “regression to the mean” when insufficient time is allowed for persuasive discussion. The discussion that ensues from carefully selecting criteria leads to better decisions and stronger support for them.

The criteria these companies chose for selecting their top priority strategic initiatives were “growth potential” and “cost of implementation”.  The priorities were selected by plotting the positions of all a team’s strategic initiatives in a four-box matrix like Figure 1 below.

The discussion about where each should be positioned, and the reasons for it, not only made it easier to select priorities, but it deepened everyone’s understanding of the strategy and the risks underlying it. As we shall see in part 3 of this article, next week, this discussion is critical to aligning the entire organization around the strategic priorities.

Face up to your “resource crunch”

Plotting the strategic initiatives on the four-box matrix will help to clarify the top candidates for priorities, but there’s still another layer of discussion and analysis needed.   Remember why prioritization is important in the first place? Your key people are probably already fully occupied with important work.  There’s scarce little “slack” in anyone’s day to take on new initiatives.

You must now look at how to free up the time of your best resources to pursue the top ranked priorities.  If your top three priorities were assigned to different leaders and require the support of different parts of the organization, little further discussion will be required. You must simply make enough room on their desktops for the new initiatives. That can be done by reassigning current work, by moving very capable resources to help with the new initiative temporarily, or by authorizing the use of contractors to help with either new or existing work you’re asking your key resources to take on.

Say “yes” to some and leave the others behind

In other cases, you may find that two or more of your top ranked initiatives are assigned to the same individual on your team. Now you have hard choices to make.  If there is an equally good resource to lead one of these, no problem. But if not, you’ll probably have to make one of the initiatives a second tier priority.

When this happens, some are tempted to assign a less experienced or capable resource to the initiative.  This is often a mistake. One of the important principles of strategy is to apply your best resources to your most promising opportunities. “Best” in this case means having the knowledge, experience and drive to maximize the potential from the opportunity. I have seen this principle bear fruit in many cases, and I’ve seen many in which it was set aside, with predictable results.

This concludes our discussion of selecting priorities. In next week’s article we’ll deal with the issue of aligning the organization with your strategic priorities.  It is surprisingly easy, yet is seldom done effectively. More about it next week.

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