Evaluating strategic initiatives against just one objective is restrictive. Learn how to identify the most fruitful initiatives by classifying them against multiple organizational objectives.
- Strategic plans can be complicated because you're trying to drive multiple objective functions. So it's important once you've built your priority list, to make sure that you have balance across all the objectives you're trying to achieve. The way I like to do that is to create multiple looks through a two by two matrix and see where my highest priority initiatives are showing up on that matrix. So for example, let's say I've got 30 initiatives on my entire list and five of them are my top priority initiatives. So first, I evaluate them based upon growth rate, how fast will they help my company grow, and profitability, how profitable is this initiative, this particular product. And when I plot all 30 initiatives, those five top initiatives help us grow very rapidly and they are very high on that axis. And they're very profitable, so they're very high on that axis. And looking at the portfolio through that lens of growth rate and profitability makes sense. But we're not done. Now let's look at other objectives that we have. And we may have two other strategic objectives of growing internationally and selling premium products as opposed to commodity products. I then take that same list of 30 initiatives and I plot them on that two by two matrix. And what I might notice is, those five top priority initiatives end up really low on the grows internationally axis, because they're all focused on our home country. I may also look at those top five products and say, wow, these are all commodity products, they're not premium products, so they score low on that, as well. And initiatives that were my top five now show up very low on my other strategic objectives. What I need to do then is get my portfolio in balance. And I might say those five initiatives are great from a growth and profitability standpoint, not so great from an international growth and from a differentiation standpoint. So instead of doing all five, I'll do two, and then I'm going to go pick three other initiatives that help me grow internationally and that help me launch premium products to get my portfolio more in balance. So once you have your list of initiatives and you've prioritized them, go back to your strategic objectives, build some two by two matrices, and look at that portfolio through multiple lenses. And when you see it unbalanced, spend some time rebalancing that list of initiatives so you can drive all your strategic objectives at the same time.
- 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.