Once the majority of a strategic planning cycle has occurred – including a thorough environmental assessment, comprehensive review and appropriate revision of mission, vision and values, and development of goals and strategies – a transition will take place, shifting attention away from planning activities and toward more action-oriented implementation activities. Engaging in structured and objective prioritization during this transition phase will be crucial to the ultimate strategic plan success.
The planning process has already incorporated prioritization to some degree, incrementally narrowing the focus from a laundry list of potential issues, goals and strategies to those most likely to impact organizational sustainability and success over the next three or so years. However, more refined prioritization is required in order to guide effective allocation of resources required for plan execution. Resources, including strategic and operational capital, as well as dedication of staff and time, are limited, thus requiring deliberative evaluation of trade-offs and determination of relative priority. Most broadly, this refined prioritization should indicate the proportionality of resource requirements with anticipated degree of impact on goal and vision achievement.
Decision analysis tools– such as the priority/payoff matrix, an example of which is shown below – can be used to better understand the relationship between effort and impact. These types of tools can help determine the relative value of one strategy compared to another, and therefore guide optimum prioritization. Other exercises or tools are designed to force trade-offs based the type(s) of impact a certain strategy is likely to have – for instance, on quality, costs or revenues – such that decision-makers must weight relative importance of the anticipated strategic outcome, promoting resource allocation aligned with results seen as most critical.
Using whichever combination of tools and exercises can most effectively promote sound conclusions and consensus on priority strategies, it is suggested that the following guidelines be used to estimate the proportion of total resources dedicated to these now clarified priorities:
- Three highest priority strategies: 75% of financial and human resources. Concentrated allocation supports realization of the highest potential impact on the strategies with the greatest strategic relevance to overall success.
- Next two highest priority strategies: 20% of financial and human resources. Oftentimes these strategies are anticipated to have significant impact, but only on a narrow component of the organization. They may alternatively or additionally have a relatively low financial impact, or require dedicated human resources but not substantial capital resources. 20% of total resources should be enough to support these still important strategies through setbacks and hiccups.
- The rest: remaining 5%, to be dedicated to one strategy or among lower-relative priority strategies. It is possible that impact of these strategies is indeterminate, due to unpredictable market conditions or the degree of innovation entailed, or the impact anticipated is only indirectly linked to vision or goal achievement. Either way, these strategies are not sure things, but have enough “there there” to warrant investment, albeit more limited. These opportunities are most likely to be categorized as low-risk/high-reward strategies
In the transition from planning to implementing, successful organizations methodically identify the ‘critical-to-success’ strategies and then disproportionately allocate capital, labor and time to execute. It is also advisable to visibly and adequately support execution of other higher priority strategies in an effort to advance on multiple fronts simultaneously, as well as diversify resource investments. Together, these resource allocation techniques will dramatically improve the chances of successful strategic plan implementation.
Does your organization have unique approaches to “prioritizing among priorities”?
Have you been a part of executing a lower-priority organizational strategy that ended up paying big strategic dividends?