Strategy: the art of prioritization

Your company has newly minted versions of its vision and mission statements, along with a set of core values. The leadership has received positive feedback from employees, partners and customers on where the company is headed. In concert with these items, the team has created a high level 3-year strategy that lays out how it will achieve its stated mission that is guided by the revised set of core values. The leadership is feeling good about its direction and starts to flesh out a more detailed strategy for the next 12-18 months. As the group begins to list goals for the period, it starts to sense that there are just too many and is concerned that it cannot successfully accomplish all. Before you jump to adjusting the underlying strategy, take the time to filter, prioritize and perhaps adjust your goals.

Step 1 – Filter. Perform a relatively quick assessment of each objective with the below tests which will likely serve to reduce the total number of items originally envisioned by the team.

• Check alignment: I’ve often seen new objectives being inserted into the plan because they seemed like the right thing to do. So while it may seem obvious, check that each documented goal does indeed support the overarching target or strategy, is aligned with the mission and vision of the company and does not infringe on any of the firm’s core values.
• SMART test: check that the goal can be described in a ‘SMART’ way. Is each goal Specific, Measurable, Achievable, Relevant and Time-Bound? If you are finding it difficult to apply these characteristics to a particular objective, you might want to exclude it from the list or at a minimum, rethink and recast.

Step 2 – Phase 1 prioritization. Include ‘obvious’ goals based on the certainty of their need.

• Prior commitments: If the company has already made a commitment to one or a group of stakeholders, internal or external, it’s probably best to put these in the high priority bucket.
• ‘Must haves’: The senior leadership usually will be able to look at a list of targets and identify a set that they consider mandatory for the success of the company.
• Identify dependent goals: Look at the remaining goals and determine which, if any, are dependent on any of those identified in the above two selections to determine their inclusion in this first phase of prioritization.

Step 3 – Check Phase 1 effort against available budget. At this point in the process, it’s good to pause and have a look at what you have, what it will take to implement and how much more the company can take on.

• Executing on significant initiatives, programs or priorities usually falls into the area of discretionary spend and/or the application of not fully utilized resources, human or otherwise.
• Until each priority is unpacked to a greater level of detail, it’s unlikely that this effort can be completed with a great deal of specificity. What’s important at this juncture is to get a broad sense of what portion of the available resources the initial set of priorities will consume.
• Employ categorization style estimating techniques to help facilitate the process, like assigning ranges of resource effort/consumption to Small, Medium, or Large classifications. This will help speed the process and allow for practical and less theoretical dialogue during this and subsequent steps. With these types of classifications assigned, the team can have debates and discussions around relative size, e.g. ‘I think goal #3 is a Medium project and will take more time to implement than goal #2 which is a Small project.’ This approach allows a goal statement to be more than a collection of words, making its assessment more tangible without having to perform in-depth analysis.

Step 4 – Phase 2 prioritization. Review and stack rank remaining goals and determine which objectives should be included in the 12-18 month plan.

• Here you can start to apply some classic consulting techniques to help further analyze the merits of the remaining objectives. Assign factors that affect risk, feasibility and outcome like ROI, business impact, complexity, and time to implement to each goal to provide additional data points for decision-making. Like the categorization approach above, don’t try yet to perform a deep-dive analysis for each but assign relative classifications like High, Medium, and Low.
• To help with the evaluation, plot goals comparing characteristics like ROI vs. time where obvious sweet spots will be High ROI, Low/Short time to implement. This type of visual aid can be very helpful for prioritization but also can be used later on in communicating the new plans to stakeholders.
• The team can also itemize the important characteristics and then weight each, e.g. ROI is seen as the most important of all and is therefore weighted at the greatest level. Translate the categorizations into a multiplying factor so High ROI might equate to a 3 and Low ROI a 1. This effort can then lead to a calculated stack-ranked list of the goals.
• Use other tools and techniques and include as needed to help create a prioritized list of the remaining goals. For example, if there is a defined group of key stakeholders that are working through the challenge, you may wish to engage the team in a multi-vote or ‘hundred-dollar spend’ effort to help rank the remaining goals.
•  Assign effort estimates to each of the goals and begin to determine how many of the outstanding goals will fit into the remaining high-level budget, allowing a few additional items to be added to the bottom of the list in case you later find in the detail planning phases that you have additional budget (unlikely but possible).

Step 5 – Step back, review, adjust and finalize. You now have a list of prioritized goals. Take a step back and have a look at your firm’s vision, mission, and the list of goals that you hope to accomplish over the next 12-18 months. Does the list look right? Are there some major gaps in what needs to be accomplished? Does it look like the company might be biting off more than it can handle, or not doing enough? Does it appear that all of the priorities are short-term in nature, or are they only leading to the attainment of goals far off into the future; if so, you might want to figure out how to arrive at a more balanced set of targets, working concurrently on both short and longer-term objectives. If you need to adjust a goal for scope, complexity, or time, or some other factor, this is the time to do it. You may want to make changes to allow for more priorities or do the reverse and shrink the list to drive greater focus.

While there is a general flow to prioritization, I believe that there is not a ‘one-size fits all’ approach but rather that a selected number of techniques and tools need to be applied to a specific situation. For example, in Step 1, the alignment check might be set against a business unit’s ‘big bets’ for the next few years, or in Step 3 the constraint may not be budget but rather time. What’s important is that a prioritization effort is abstracted at the right levels as you step through your defined process, to ensure that you are not pulling out the ‘deep-dive’ business case tools too early and driving a business-paralyzing body of work. When defining categories like S, M, L remember that you will need people on the team that have a strong sense for what constructs will work and more importantly, how each goal or requirement should be classified.

Prioritization is about making conscious and usually very hard decisions about what’s important to your business. A methodology or set of tools are just that and will not, on their own, help you prioritize.

Business is about doing the very best with what you have in a zero-sum game world. The inability to prioritize may not lead to a company’s certain demise, but the enterprise is unlikely to flourish as it attempts to react to every need and market force, with collective arms flailing and jumping from one activity to another.

About the author: David Tom is Managing Director at the Inthink Group and has crafted and executed many strategic plans both as a business leader and management consultant. In this article David outlines a five step process to help leaders with the daunting task of prioritizing business goals while setting strategy.

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