I’ll be the first to acknowledge that strategic planning is, or should be, simple. But it is not easy. Nowhere is that more clear than when I work with clients to identify the strategic priorities that will guide their efforts to bridge the gap between where they are today and their desired future state.
Jumping to the punchline, more than 5 to 7 strategic priorities for any business is too many. Having too many so-called priorities is a mistake.
When Everything is a Priority, Nothing is a Priority
In my experience, here’s the way a typical strategic planning session goes. Participants get very excited about envisioning an aspirational new future for their enterprise — their desired future state. The group is energized at the prospect of achieving the exciting future they’ve articulated as part of this process.
The group then coalesces fairly quickly around a clear-eyed view of their business’ current state and context (e.g. strengths, weaknesses, opportunities, threats, key external trends, etc.).
Next, they explore, discuss, debate, and surface all of the gaps that exist between where they are today and where they want to be in the future. This exercise typically yields a lengthy list of things that need to change — new projects, new initiatives, new structures, new products and services, etc. It’s not unusual to identify 20 to 30 major changes that could help the business achieve its aspirations.
Here’s where things get messy. No business we deal with has unlimited resources. In every strategic planning workshop we facilitate, participants generate far more quality potential new initiatives than they have resources to support. The temptation at this point is to spread resources across as many initiatives as possible — after all, each initiative probably has multiple champions in the room. But no business, no leadership team, can focus on more than 5 to 7 strategic-level initiatives at any one time. Trust me on this one!
Impact-Effort Matrix
How do you prioritize a lengthy list of worthy and potentially necessary changes? I often use an Impact-Effort Matrix.
The Impact-Effort Matrix is a very simple, yet effective, visual tool for identifying which potential strategic initiatives will have the most impact on future results. The idea is to rank, relative to one another, each of the potential change efforts surfaced during the workshop. At this point, absolute values (e.g., potential costs, potential revenue impacts, potential cultural impacts, etc.) are not required. The key is to sort the candidate initiatives based on the group’s best judgments and insights regarding the relative merits and effort associated with each candidate change initiative.
Once consensus is achieved, it becomes fairly straightforward to identify the 5 to 7 change initiatives that are most important to begin now. The rest can be held in a “parking lot” for future consideration.
Food for Thought
It takes leadership courage to agree to focus on no more than 5 to 7 major strategic initiatives. After all, your strategic planning session probably surfaced many important and potentially necessary changes that “should” be undertaken. But once you and your team leave the workshop atmosphere and re-engage in your business day-to-day, demands on your time and resources will undoubtedly clash with the new projects and initiatives called for in your strategic plan. It will take discipline to accomplish your chosen strategic initiatives — discipline that is necessary for you to move toward your aspirational future state.