Do we do what really supports the business strategy?
As CEO, you know that the key to successfully implementing the company’s strategy is in your hands and in those of your management team.
You also know that there are many factors involved in the successful implementation of a good strategy. Many have to do with the culture of the company, the people, without a doubt. It is in the culture where the ways of doing things are defined, the real behavior, and, therefore, some ways of prioritizing and ways of executing. If we do not review them and adapt what needs to be adapted, those ways of doing things` may be both the cause of success as well as systematic delays.
Do we do what really supports the business strategy?
Are we carrying out the initiatives, the activities, the projects that support the business strategy that we want to promote?
WHAT HAPPENS USUALLY?
Prioritizing means putting time, money, people, effort into a specific program of projects and initiatives. And it has to be “the program” that will allow to implement the strategy. That is why it is so important to choose well, and at each level of the organization, what the resources, the means, are dedicated to.
What happens usually?
There is a large variety of situations that may occur. And they have a direct or indirect impact on the good prioritization and execution of the initiatives, the projects identified to be realized. We say that we prioritize, but then there is a consumption of resources, some deliveries after the deadline, or an added difficulty for the projects to go ahead. What causes it? Here are 3 very frequent scenarios:
- Underestimating the real effort: Poor identification of the actual starting point, which then requires much more effort to get where we want to be.
- The interdependence between areas and/or projects: are often undervalued, not taken into account. And this is what causes large deviations to several projects at once, and / or losses of “opportunity windows” in which to go “live” or launch a product onto the market
- Know how to say “no” to a project: sometimes the project is “stopped”, but it does not disappear from the portfolio, it is still “alive”. It has to do with what level the decision is made at and what level the objectives are set at. And at some unexpected moment, the “stopped project” begins to consume resources … which may be for a thousand reasons, but that does not happen if whoever leads the project has a clear vision. When you decide to “kill” a project, it really “dies”, you do not keep it “zombie“.
WHAT CAN I DO TO IMPLEMENT MY STRATEGY PROPERLY?
Four very clear steps.But they are not easy steps to take.
- Define your business strategy and share this together with your vision
- Mark the prioritization criteria of initiatives that support the strategy
- Define the process of managing the portfolio of initiatives
- Execute it with consistency
Define your business strategy and share this with your vision
The strategy has to be well defined, linked to the vision. It allows the teams, the organization, to have clear business criteria on which the Focus must be placed. This enables autonomy in the teams, and micro-decisions are taken in line with the strategy.
Mark the criteria to prioritize the initiatives that support the strategy
If there are difficulties in identifying initiatives, projects, etc., you can ask me about it. There are ways to work on it, effectively, without losing sight of the vision and what is sought. I’ll give you some recommendations in a future post.
Once there is a list of initiatives, projects or even activities related to operations and continuous improvement, we apply the steps detailed below.
How is it done to prioritize?
- Define a set of clear and consistent criteria. It can be done.
- Apply an easy classification to the initiatives, which should be as simple as possible.
- Review the team objectives systems, and ensure they are aligned with these criteria and allow a good application of the portfolio management process.
What does it take to make it work?
- The criteria have to be well defined, transparent and shared, not forgetting to consider the medium / long term.
- Show that the criteria are clearly linked to the strategy
- Ensure there is a good categorization and definition of the scope of the initiatives, as well as a consistent estimation of effort and resources
Use the following table, defining what means easy / difficult, and applying criteria of profitability or value contribution in a third axis (ball size of the initiative, for example). This allows distributing the portfolio and configuring the “program” on which to place the focus.
In this example, the initiatives 2, 4 and 6 will be discarded, and “the program” will be focused on initiatives 1, 3, and 5, with particular attention to initiative 3 and its management and execution.
It is a method that allows us to recons in the face of market variations and situations of the complex environment in which we live, reviewing in moments of context change whether the prioritization is still valid or not.
Define the process of managing the portfolio of initiatives, of your “Program”
You have already managed to classify your initiatives, so far so good. But we mustn’t forget two situations, based on external and internal factors, that occur frequently:
- External:We are in a very dynamic environment, with a high variation of market situations, of context, which force us to frequently rethink some specific initiatives or review priorities.
- Internal: It is very difficult to prioritize within the organization: all the initiatives that are identified in different areas / teams want and seek to develop and meet the objectives set, which in turn are part of the more global strategy proposed. How well these objectives are translated throughout the organization is also decisive for the success.
Knowing the 1-2-3 is key. And what makes the difference is about how to frame “the program” and how to carry it out.
The dynamics of management of the portfolio of initiatives, of “the program”, are key. I recommend always following 3 elements:
- Define the governance model of “the program” in your organization that allows decisions to be made, in an agile and effective way, where they need to be taken.
- Base this governance model on Agile dynamics in an Agile way of operating.
- Ensure that the information flows in all the directions. That will allow the teams to work effectively, while also facilitating the revision of 1-2-3 against external and internal factors explained above.
Execute it with consistency
This basically means 3 things:
- Do not change the rules in the middle of the game, and if you have to do it, you have to argue and explain very well why. If not, all the autonomy that you have been able to generate in the team will be reduced, or decisions will be made in different directions. And use the governance model of “the program” that has been agreed on by the team.
- Make sure you have the necessary talentto promote and carry out each of the projects that make up the portfolio, in the approved context.
- Do a good change managementlinked to what the new projects and the proposed strategy require. Do not minimize it.
After a good strategy definition, execute It with success!!
If you have questions, or want more details, do not hesitate to contact me.