Prioritizing to Maximize the Financial Impact of Your Best Ideas
I am going to assume that you have already read Chapter 14 and have already envisioned your ideal future state. I will also assume that you understand the importance of finding your one priority—the quickest and most effective way to help you achieve that ideal future state. The question I am asked most frequently by my clients or when I do speeches on prioritization is, “What happens when we are already working on three or four priorities and my boss or the parent company in the United States or Europe tells me that there is another priority we need to work on?”
My answer is always the same—if you have too many priorities then you have no priorities. If you are working on too many things, then you cannot move anything forward. Adding new priorities avoids making a decision. The whole point of prioritization is to decide what to spend time and effort on. When organizations refuse to prioritize, or do not know how to do it effectively, it means employees work longer hours and they are more stressed. It hinders performance. More importantly, it is a cop out. It is an organization saying that it will not instill the proper discipline to make decisions that are in the best interest of the customers and the organization. So prioritization by definition is all about identifying what are the most important things for you to work on.
When we talk about prioritization, we talk about your one priority. That one priority has to have a significant impact and that impact is going to be different for every organization. What does impact mean for your organization? Is it purely financial? Reputational? Market share? Employee retention? You have to use certain objective criteria to make the decision. When we really prioritize, we are saying that something is more important than something else. That is why the concept of having multiple priorities makes no sense. One thing will always be more important that the rest.
I could easily argue that my priorities are to live a healthy life, be a good father and husband, and build a successful business. But at some point, I need to determine which one is most important to me. That is my one priority. That is the one thing that will have the greatest impact on helping you progress toward your ideal future state.
Three Key Questions for Prioritization
We have already discussed the first two important questions when it comes to prioritization:
1. What is my organization’s ideal future state?
2. What is the quickest and most effective way to achieve that ideal future state?
Once you have asked yourself those two questions, we have to determine what to do if other important things come up. Let us assume that you have identified your ideal future state and your one priority, and then something happens that causes you to possibly rethink that one priority. The market changes. A new competitor enters. Your customer’s buying behavior changes. You lose some top people. You get pressure from your boss. How do you deal with that? You have to compare it against your one priority.
This is my third question:
3. Does this new initiative or strategy help us make progress toward our ideal future state faster or more effectively than what we are currently doing (our one priority)?
If the answer is no, then nothing should be done about it. If the answer is yes, then you do not add it as another priority. It becomes your one priority.
This is a very important concept for you all to grasp, because most of your organizations deal in multiple priorities. That is a very ineffective way to run an organization.
Criteria for Prioritization
This third question is a big one and requires some objective criteria to make the decision-making process easier. Here are some criteria you can use to help you prioritize when comparing different initiatives and strategies.
Alignment
It is important that any strategy you implement or any idea you move forward with aligns with your ideal future state. If it does not, then you are wasting your time. This hurdle is a simple yes or no response. “Does the initiative align with the ideal future state?” If the answer is no, then there is no reason to move forward. Why would you put time and effort behind something that is not aligned with the direction you are trying to go?
If the answer is yes, then you start assessing other criteria.
Impact
Impact can be defined differently for each organization. Sometimes impact is purely financial—increased revenues, higher profits, better pricing, lower costs, and so on. However, impact may also be something different. A strategy might have an impact on your customer retention, or reputation as an organization, or your ability to capture investment dollars, or your ability to attract and retain the best people. You need to understand and assess the impact that any new strategy will have. That will help you determine if it helps you achieve your ideal future state more effectively than what you are already doing.
Organizational Capability
When contemplating a new priority, you need to understand what is required to make it happen. Is it going to require hiring a whole bunch of new people? Does it require a whole set of skills you do not currently have? Does it require 12 months for you to implement? All this helps you assess your organization’s capability to implement any new initiative you are considering. Look at your organization’s capability and consider the following questions:
• Do we have the right people?
• Do we have the right infrastructure?
• Are we able to do this quickly and effectively?
• What will it take to make this happen quickly and properly?
Built into this assessment of organizational capability would also be the concept of speed and whether this accelerates your ability to achieve your ideal future state.
Growth Potential
The last criterion for you to think about is growth potential—whether the new initiative has a greater or lesser growth potential than what you are already working on. Will it open up new markets for you? Is there sustainability to it? If you are considering moving into new markets, do those new markets have a greater growth potential than the markets you are currently in? If you see better growth potential in new markets, you may decide to focus your efforts there, while still maintaining a presence in your current markets.
Therefore, the third important question, which really gets to the heart of prioritization, is:
Does any new initiative or strategy that we are considering help us make progress toward our ideal future state faster or more effectively than what we are currently doing (our one priority)?
Without asking this question, you are never going to be able to effectively prioritize what gets worked on, because every decision will be made in a vacuum.