SETTING PRIORITIES

One of the biggest benefits of self-reflection is in identifying what comes first and what comes last. Too often when people or teams engage in setting priorities, they identify multiple things—maybe even ten or twenty—that are “the” top priority. Sorry, but it really doesn't work that way. If you prioritize one hundred things, then there is only one first priority, one second-place priority, and so forth. Moreover, if something is number one on the list, then that means other items must be relegated to places from number two to one hundred. This isn't easy, but unless you prioritize in this fashion, you're only fooling yourself. You will be rushing around trying to accomplish fifty-first-, second-, and third-place “priorities,” instead of committing your time, attention, and resources to what matters most.

This approach to prioritizing may take some getting used to. For example, at Baxter, we would identify the top one hundred projects, listing them from one to one hundred. Initially, when a manager found out that his project was number twenty, his reaction was shock and disappointment. Rather than realizing that the project ranked in the top 20 percent of the company's priorities, which was indeed a good thing, he reacted on the basis of the more common view at most firms, where five or ten things are ranked number one, and a similar number are rated second, third, and so forth. With that skewed scale, of course being number twenty would seem as though he was at the bottom of the barrel! Once the people at Baxter understood that this was really a top one hundred ranking, the perspective began to shift. They knew all one hundred projects would get some attention, with the highest-ranking receiving the most. In time, projects could either move up significantly or be dropped.

As a leader, when you engage in true prioritization, you confront a harsh reality, one that nobody, particularly the overachievers and perfectionists among us, likes to admit: we can't do everything. If you create your own list of one hundred things you'd like to do, you may be able to do only the first seventeen. Knowing that, you must make sure that the top seventeen on your list really ought to be there, and that they are ranked in order of what is most important to you. Once you have established your priorities, then making decisions based on what matters most becomes fairly easy. You do not have to agonize about what is most important because through self-reflection you have already established what comes first, second, third, and so forth.

Similarly, by being a self-reflective leader, you can determine where the organization excels, just as you can assess your own strengths. Unless you, as a leader, are willing to take a step back to reflect, it will be very hard to make these distinctions consistently. I used to tell my teammates at Baxter that I had good news and bad news. The bad news was that of all the things we were involved in, we were probably really good at only two or three of them. The good news, however, was that many companies were not good at any of them. By knowing what we were really good at, we were able to put our focus and our energies on those areas that reflected our strengths and core competencies.

Once you have determined what your organization can do well, then it is time to prioritize accordingly. For example, a company that operates in forty countries can state that its strength is its global nature. But not all the countries in which it operates are equal when it comes to size or the importance of its market. Similarly, a company's strength may be its multiple product lines, but every line is not equal; some rate higher than others in importance. Without an honest assessment, leaders and their companies run the risk of trying to make everything a priority—which, as I've stated previously, is impossible.

When you are in the middle of setting these priorities, however, you can't get your brain around the task unless you step back and ask the key questions: What is most important? What should we be doing? The analysis becomes clearer and easier when you take the time to reflect. Otherwise, your company is at risk of engaging in a lot of activity without much to show for it.

Being able to discern activity from productivity requires discipline because priorities shift with changing circumstances and new developments. As a leader, you need to address these shifts constantly in order to make credible decisions that make sense today and in the foreseeable future. Here's an example of what we face at Madison Dearborn Partners as we manage our nearly $20 billion portfolio of companies across diverse industries. Let's say we have the opportunity to buy a fast-growing business that, on the surface, appears to be complementary to our portfolio. Without self-reflection, we might be tempted to jump in and make the deal work. Instead, long before planning, negotiating, financing, or serious due diligence come into play, we need to stop and reflect: Does this company really fit into our portfolio? Is it consistent with our investment philosophy? Given the amount of time and effort that it takes to complete a transaction (negotiation, due diligence, financing, and integration), does it fit with all the other priorities that we said were critical? As a leader in your organization, when you engage in self-reflection, you can see how and whether a business opportunity or project is important to the company, how it aligns with and advances the goals of the organization, and how priorities that you set might change as a result.

If we move forward with the acquisition, having determined that it is strategic, economically sound, and consistent with our objectives, then we are able to move forward with a framework that makes sense. We have thought about the acquisition explicitly, instead of merely engaging in the frenzied activity that often surrounds deal making.

Your self-reflection may lead you to the opposite conclusion: that although the company looks and sounds good, it is not aligned with your company's strategic goals. For example, the business may be in a particular niche market or geography that is not your top priority. If your focus is on trying to make the deal work, however, it is easy to rationalize and see connections that are not really there. Only self-reflection can help you discern if it is truly an opportunity worth pursuing. The process is ongoing as new opportunities arise, challenges are faced, and priorities shift.