Critical thinking is necessary for a successful initiative portfolio. Learn how to categorize your list of initiatives and appraise their value in terms of your specific organizational objectives.
- Another tool you can use to prioritize your initiatives is called the two by two matrix. The way a two by two matrix works is you look at two objective functions of your organization, and plot them against one another, and then place your initiatives on that grid. So the example I've got here, first, I look at profit. And that's the most important objective of my organization, and I'm going to assess my initiatives from low profit to high profit. Then I look at growth rate of the organization, how much will this initiative help my top line grow for the company. And again, I look from low to high. And what happens is, the two by two matrix will help me prioritize. And initiatives that are high profit and high growth are my priority one initiatives. Next, since profit is most important to me, anything that's high profit, even if it doesn't get me a lot of growth, is going to be priority two. Initiatives that get me a small amount of profit, but are high growth, are going to be priority three. And then initiatives that get me very low profit, and very low growth, aren't even prioritized, I should avoid initiatives that don't deliver on either objective function. So let's look at placing some of our initiatives on the two by two matrix. Perhaps initiative A is reasonably high profit, and very high growth. Initiative B is going to be extremely high profit, it's the most profitable one on my list, and moderate growth. Initiative C, it's around the middle. It still delivers a high level of profit, a moderate level of growth. Initiative D is actually lower on the growth scale, but it still delivers a good amount of profit. Initiative E as well is pretty close to what I get from D. Now I'm really getting down on the list. Initiative F is reasonably low profit, but it's going to enter a new market, and help me grow quickly. And initiative G doesn't deliver very much profit at all, and there's virtually no growth associated with it. And what I've done, is said, of all the initiatives I've got, and for the two objective functions of my business, I've identified my highest priority initiatives that I'll pursue first, the ones I'll pursue second, the ones that I'll pursue third, and the ones I should probably avoid. So as you're conducting your strategic planning process, take your initiatives, think about the objectives that are most important to your business, plot your initiatives, and that should help confirm what your priority list is.
- 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.