A key element of the CEO’s job is to align the executive team and the company on a common vision and mission for the company. However, as the business grows and the leadership team expands, there is a risk that each team will adopt a different path to achieve the vision.
Members of the executive team will typically all agree on a high-level statement of the corporate vision, but they may be interpreting it differently. They all see the same mountain and are hopefully all aiming for the same peak, but just as in mountain climbing, there may be multiple routes to the summit. The specifics and nuances of the varying priorities become evident when we look more closely at how each leader interprets the vision and mission. To get to a true alignment, we need to expose all of the priorities and transparently explore their relative importance to the business.
Think of this process as successively peeling back the layers of an onion. We want to identify all of the priorities, categorize them at a macro level, then dive deeply into prioritizing each category. Ultimately we want to create goals and measures for the entire company to track progress. The following steps can serve as a guide:
1. Create a quadrant chart to start the process. Have each executive define their interpretation of the path to the summit and what they see as the priorities for the business. Collectively, divide the priorities into the four quadrants: High priorities, ’table-stakes’, potential game changers, and items that are distractions or dragging the business down. This process can alternatively be described as things to ‘start, stop, or accelerate.’
This is a first layer analysis, but it will serve to drive the discussion and help to build consensus about the path to the summit. It is important to surface all of the pet projects and assumptions, and it is just as important to decide what you are not going to do, as it is to decide what you are going to do.
A good way to think about ‘Table Stakes’ is to consider them as foundational must-haves for the business. Suppose you are going to open a bagel store, making bagels is your table stakes, but you will need more to become successful. The ‘High Priority’ items are your key differentiators. These are the items that will make your business stand out from the competition, or are requisite to pursue your strategy. Consider these to be the reasons why customers will buy from your bagel store instead of the competition. The ‘Potential’ items are the areas where you can innovate and build your moat. They may not actually be low priority, but they probably have to take a backseat to the core elements of the business in terms of resource allocation. Lastly, there are always distractions or pet projects that really will not move the needle. These items consume resources that could be applied to more important efforts, so they introduce drag on the business. The objective of the exercise is to agree on what is in each quadrant and stop spending precious effort on distractions.
2. The next step is to consider the feasibility of the High Priority items. Chances are you do not have enough resources to accomplish them all. You need to agree on the High Priority items you can actually do, and de-prioritize the rest for another day. The best tool for this is called a Value Prompter. Create a 10 X 10 grid. The Y-axis is ‘Value to the Business’ from 1 (low) to 10 (high). The X-axis is ‘Probability of Success’ with the same scale. It is important to establish a timeframe for the analysis, usually one planning cycle (1 year). The longer the timeframe, the more you will convince yourself you can accomplish anything, but the more you delay, the lower the value to the business. One planning cycle is a good balance between urgency and feasibility.
Starting with the list of high priority items, the goal is to assign a score to each for its probability of success within the planning timeframe, and a score for its value to the business. These two scores will form the coordinates where the item falls on the value prompter 10X10 grid. Perform the first pass in an informal manner without a ton of analysis or deep dive. The objective is to gather the executive team and ‘spitball’ where each item belongs on the grid. Usually, the group will quickly arrive at a consensus about positioning each item, and when there is disagreement, the discussion will inform and highlight where the group is out of alignment. Voting can be out-loud, or closed ballot. Each has its benefits, but I have found closed ballot to produce a more telling outcome that truly expose differences of opinion.
3. At this point, you have a scatter diagram that spreads out the high-priority items based upon their value and the probability that the company can actually realize that value. Typically, there is a cluster of items that are high-value and high-probability of success, and then outliers in both directions (high value + low probability, or low value + high probability). Discussing things that are not in the top grouping is probably the hardest part of the meeting. There will be passionate arguments for one or more of the outliers to be elevated to the high/high group, and it is really difficult to say ‘no’ or turn away from something that was identified in step 1 as a high-priority for the business. However, this is the value of peeling back the onion one layer at a time because it brings focus to the process and narrows the routes to the summit.
Once the dust settles, circle the items that combine the highest value and highest probability of success. A rule of thumb is to start with fewer than ten items (usually more like 5). It is now time to consider the resources required to accomplish these items. Task the team to build plans to execute each item and realize its anticipated business value. These are mini business plans with the objective of testing the conclusions about value and probability of success, and highlighting the resources required to achieve the desired outcome.
4. Consolidate the plans and determine if the resources are available to accomplish the entire list. If not, return to the value prompter grid and tighten the criteria for which items make the cut. It is better to eliminate items with lower probability of success, as this approach reduces risk while preserving value.
5. With the narrow list of high-priority projects in hand, and mini operational and resource plans for each item, the final step is to define the measures of success and the metrics that will demonstrate progress. The best approach is to look for SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound). Incorporating the measures of success when communicating the plans will clearly illuminate the route the leadership team has chosen to reach the summit of success.
Climbing the mountain to business success requires the CEO, the executive team, and everyone else in the company to be aiming for the same summit, and to be aligned on the path the business will take to get there. Achieving this level of alignment is a step by step process that weeds out distractions and builds consensus on priorities.