In Corporate Strategic Planning, Be Ready to Prioritize and Justify
Posted by on June 17, 2010So much has been written about the importance of setting priorities. Whether in time management or corporate strategic planning, the point remains: We must know our priorities and focus on the projects and opportunities that represent our highest priorities. The saying, “Do your best and forget the rest” is applicable in more than one way. Focus your resources and energy on your best opportunities and set the others aside. The question is: How do you determine your priorities? And in the face of competing corporate agendas, how do you justify your choices? Both prioritization and justification are important steps in an effective corporate planning process.
How do you prioritize corporate objectives?
In a recent blog post we explored the concept of Opportunity Valuation. The results of opportunity valuation are fed directly into the process of identifying priorities and justifying those selections. After all, once you’ve measured/valued your potential corporate opportunities or objectives you’re already armed with the information you need to prioritize and justify your chosen direction(s). And with accurate values placed on defined opportunities, you are ready to develop strategic and operational plans for those with the highest values.
A formula for prioritization:
There are numerous mathematical formulas that can be used to valuate opportunities. Here is a simple formula that can be used to score and sort various decisions:
Formula:
Final Score = (Relative Importance to the Organization) - (Relative Satisfaction with the Existing State) - (Approximate Time in Relative Scale to Implement or Complete) - (Approximate Expense in Relative Scale) + (Relative Viability, taking into account short & long-term usefulness)
Definitions:
Relative importance to the organization: Being completely objective, how critical is “it” to the organization?
Relative satisfaction with the existing state or condition: Again, being objective, how satisfied are we (the organization) without “it”?
Approximate relative time to implement or complete: If we do “it”, how long will it take to have “it”? The relative scale is used of course instead on an actual estimate.
Approximate relative expense: Is “it” expensive? Applying a relative scale of expense, would it be a “1”, a “5” or somewhere in between?
Relative viability (taking into account the short and long-term usefulness): How long will the utility of “it” last?
The resulting scores, when calculated on a spreadsheet, yield a sortable table that becomes a prioritized list of alternative strategic objectives.
Make no mistake; we are not suggesting that all decisions can be made strictly by mathematics. Intuition, gut feel, emotions, and opinions will always play a role, but our goal is to temper those “right brain” decision making impulses with a systematic logical approach.
Read about opportunity valuation in our previous blog post.
Read about the Plan4 strategic planning process here.
For permission to use or reprint any portions of this copyrighted article, contact Method Frameworks at articles@methodframeworks.com.
About the Author:
Joe Evans is the President and CEO of Method Frameworks. Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.
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