How do we prioritize when priorities collide? Which comes first, then next? How can we navigate competing priorities?
Prioritizing the strategic initiatives of the business capability roadmap is a key step before we can start executing strategy at the speed of business.
Eisenhower’s urgent-important principle, also espoused by Stephen Covey, provides some guidance when it comes to individual decisions about priorities. However for prioritizing strategic initiatives, it falls short of navigating the multiplicity of perspectives across the company and the need to arrive at an Enterprise-level understanding and agreement. After all, what is important to me may not be as important to you. Ditto for what is urgent.
Business capabilities form the solid foundation for execution of the strategic vision. So we need to understand then agree on which ones to build or enhance; this is an important step towards solving the company’s strategic challenges and problems.
In my experience, there are five broad steps to reach a shared understanding and Enterprise-level agreement on the business capability (and the technology) roadmap. Process clarity helps improve decision-making, especially when used with business change management techniques and team facilitation.
- Agree as a leadership team on the top business challenges and problems to solve.
- Decompose the challenges and problems to “digestible chunks”, e.g. as multiple layers or facets to be solved across several periods of time (e.g. quarters or years). For example, a five-year ambition is decomposed as year-on-year challenges.
- Tag the business capabilities required to execute the solutions and group related ones as Strategic Initiatives, then align these to challenges and problems identified earlier.
- Assess the Business Value, Complexity and Risk of Inaction for each Strategic Initiative.
- Use revenue, market share or customer satisfaction and loyalty as proxies of Business Value.
- Leverage a mixture of parameters to gauge Complexity. For example, you can use any combination of the following, whichever are of greater significance to the company:
- Ease of implementation, as the relative comparison of the scale of business change that will be delivered by the Strategic Initiative
- Business risk arising from change
- Cost of the Strategic Initiative
- Implementation time, especially noting that technical challenges often result in longer time lines or higher risk of project failure to meet objectives
- Rate as an individual, then as a leadership team, each Strategic Initiative according to a matrix of business value (the x-axis) and complexity (y-axis). Plot the individual and leadership team results to visualise the relative importance of the Strategic Initiatives.
- Overlay Risk of Inaction on the results. Risk of Inaction relates to the business risk and opportunity cost of deferring or de-prioritizing the Strategic Initiative. The risk of inaction is measured as the product of the probability of the risk x the business impact of the consequence of the risk materialising x the compensatory move to alleviate any business pain if it materialises (aka the bitter pill)! Label as High, Medium or Low. You can use also use colors or relative size of the shapes denoting each Strategic Initiative.
- Use the visual map to decide which Strategic Initiatives are priorities for the planning period. Check for sensitivity of the results, especially around the assessment of the impact of Risk of Inaction.
Don’t Forget Your Instinct
This quantitative and logical method for prioritization can be used alongside other means of decision-making (e.g. Kepner-Tregoe). For example, you can challenge and test your leadership instinct (gut feel) against the combined team results, adding wisdom to pure data analytics. Use the results to promote problem definition, discussion and fact-finding, leading to shared understanding and, hopefully, agreement on what to do first and what to do next.
Learning From Others
If you already have a capability roadmap, what process did you use to gain agreement? What worked? What was not effective? What were the pitfalls and highlights?
If you do not have a capability roadmap yet, what business drivers can you use to gain movement towards one? Who can help you start the movement?