Join Mike Figliuolo for an in-depth discussion in this video Creating a prioritization list, part of Strategic Planning Foundations.
- Prioritization is one of the most important aspects of a good strategic planning process. So, once you've generated a list of initiatives, it's important to understand what the priorities are and the resources that those initiatives will consume. So, let's look at an example of a prioritization list. I've got my list of seven initiatives, and they've been ranked from highest priority to lowest priority. That priority is driven by my strategic goals of the organization, so the qualitative things as well as the financial goals and the hard metrics that are going to help me understand which initiatives deliver the highest financial return.
I then need to look at, for each initiative, what resources will be required to complete it. In this example, I've got the costs of delivering on that initiative in hundreds of thousands of dollars of what it will take to implement it. I've also looked at some of the functional resources that would be required for each project. So, for example, marketing, sales, IT, and operations. Different initiatives need different types of resources to complete them.
Once I have my priorities and I understand the resources required, I need to go through an exercise called Drawing the line. That's saying I have a finite pool of resources that I can use, and when I run out of those resources, I should not be pursuing any initiatives that are below that line because it's going to dilute my efforts and reduce my possibility of success. So, for example, if my limiting factor was budget, and I only had $500,000 to invest, I would start at the top of prioritization list and look at the cost of the initiative, and work down until I ran out of money.
In this case, I would have to stop after initiative C because I will have spent my $500,000. I should not work on anything below that line until I get additional budget or we decide, as an organization, to re-prioritize something and move something from above the line below it, and move something from below above. But that requires a re-prioritization. Another example might be a functional resource as my limiting factor.
So, let's say I only have one marketing person on my team and budget is not a constraint. Again, I start at the top of the list with my resources. My highest priority initiative I can assign my marketing person and then my second highest priority initiative. But then I run out of marketing people. I don't have additional resources available to pursue that next initiative. So, in that case, I need to draw the line after my second initiative, and I would not pursue the third one until I got additional marketing support.
Another example, let's say sales was my limiting factor, and I have 10 sales people. Again, I start at the top of the list and I start working down. I can say this one requires sales, so does this one, so does this one, and by the time I get down here that's when I run out of sales resources. So, I would pursue all of the initiatives on the list until the point where I run out of sales people. So, as you look at your prioritization list, and you have them sorted from highest to lowest, and you understand the resources that will be required to pursue that initiative, work your way down from the top of the list, and be disciplined about stomping when you run out of that limiting resource so you can focus on your highest priority initiatives, get them executed successfully, and then move further down your list.
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- Define the principles of strategic planning.
- Identify forces used to assess the market.
- Explain how to conduct a SWOT analysis.
- Articulate how to establish guiding principles and set goals.
- Explain what strategic filters are used for.
- Describe the steps of a strategic planning process.