When companies define their strategic priorities, it is common to include in this list items that are not building blocks of the company’s strategic goals. At least directly.
Some of these items are extraneous, pet projects and/or impositions from third-party actors or the result of internal politics and accommodations and at best do not add any value and at worst hinder the strategic agenda.
However, there is another type of priority which, if properly managed, can help you break into a vault full of riches that are unreachable to you right now.
In my experience, most of these items usually fall in 3 categories:
- “Be Good”: These include priorities to better the organization’s culture and adherence to values, improve corporate responsibility, increase diversity and equity. These actions may result in financial gains but they are typically motivated by a desire for more intangible riches: social responsibility, a sense of right and wrong and the will to make a difference.
- “Get Ready For The Future”: These include priorities to make the organization more nimble and responsive, increase flexibility in processes and technology and buy options in emerging, potentially disruptive topics like fintech. These priorities may actually add costs and offer no or hard-to-quantify gains and can be highly influenced by fads and herd mentality but they are also critical to innovation and to finding the proverbial pot of gold.
- “Be Healthy”: These include priorities to improve your current flexibility and resiliency, strengthen governance, remove bottlenecks to focus and change and remove distractions. Some of these priorities may be imposed by the regulator but, regardless of who pushes them, they sound like indirect contributors to the reward of your strategy.
Is it wrong to add priorities like these?
Absolutely not.
However, non-strategic projects can be a distraction and get in the way of real strategic work.
Therefore the key (or the “combination”, since it is a vault) is to prioritize and implement these at an effective pace. Because, even if you have hundreds of attractive opportunities to pursue and noble causes to champion, the fact is that diluting your focus over too many initiatives will erode their effectiveness. In other words: “it is easier to excel in one or two areas than to be mediocre in several”.
Therefore, prioritize those…
… that open the best doors.
When evaluating opportunities, you will find a number of attractive opportunities which are, at the moment, “out of reach” to your organization. Maybe you do not have the technology, the brand, expertise or footprint to pursue them. Maybe it is incompatible with your risk appetite or the time it takes to process.
Some of these come with the promise of additional opportunities in the future (e.g. expanding to a new high-growth geography, which may give you the option to pursue new businesses there; or changing your IT platform which may give you the option to develop new products in the future).
Understanding the financial and strategic value of these out-of-reach opportunities and prioritizing initiatives that open doors to the best ones will revert in great strategic options in the future.
… that align you with the image you and others have of you.
Do you know the expression: “be the person your dog thinks you are?”. It is the same idea, but for your organization. Every organization has practices, processes, and projects which are or could be perceived as in conflict with what your clients, potential hires, etc. think of you. Maybe your clients have chosen you because you are a small bank which they perceive as important to the community and may be surprised by your lack of a local sourcing plan. Maybe your lack of diversity at the top will make your support to the local girls’ team seem hypocritical, even if it is not.
There are always ways to take you closer to the values shared within your organization and these initiatives often energize the organization, spawn creative innovation, strengthen your brand and make attracting and retaining the right clients and talent easier.
… that constitute the most valuable lessons at an affordable price.
Organizations should think in terms of learning milestones. Your growth goals should be more than the sum of current opportunities and projects. This is “the stretch”: the part of your expected growth that you do not know where it is coming from.
However, to close this growth gap, it is not enough to just wish for the best. And, just establishing higher sales targets will not do the trick either. Even if you do not know where this growth will come from, it is important to have a plan to figure it out.
For example, working for a client, I recently found out a couple of big dissatisfaction among buyers in Canada. These are areas no one is doing a good job and buyers are left with a less-than-optimal solution or the option to give up on their purchase. The reason this happens is that no one knows how to solve these problems, despite numerous experiments from other large companies and startups on the matter.
In this case, the strategic decision was: should we pursue this path even though the last mile is not built yet? We then discussed creating learning milestones which would first serve to gradually increase the company’s commitment to that path and later reduce “learnable” risks.
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How about you? Would you suggest other categories of “special initiatives” or other factors to consider to prioritize them?
