Setting Business Priorities
Setting business priorities starts with a plan. A good plan creates focus, sets goals, creates alignment throughout your organization, and provides a means for accountability. Have you reduced organizational activity down to the minimum to achieve maximum results? Are anyone’s priorities working at cross purposes to the company’s? Are your daily activities properly aligned toward your goals? You are likely emphasizing the wrong set of business priorities to your team if you don’t address these issues.
Planning Equals Prioritization
Planning requires prioritizing business initiatives. This will help you to send the right message to your team, and prevent time and resource loss. As with most business plans, I recommend there be no more than five annual initiatives (less is preferred). Once you have your Critical Numbers, you can determine which business initiatives are most important to undertake, maintaining at least one annual initiative focused on just your critical number(s).
After meeting hundreds of business owners, I find that most fail to create a good business plan. The secret is in the annual initiatives. Many leaders confuse budgeting with business planning. Others confuse action steps with business priorities or initiatives. Others are not thinking big enough when creating their plans. Are you finding it challenging to create a good business plan? How often is there a difference between the plan you create and the actions your team initiates? How big is the gap between expected and actual performance? In my experience, poor business planning may cost you serious growth in revenue and profits.
Strategic Business Initiatives
A good business plan should help you determine your business priorities. These are the 3 to 5 annual initiatives that should move your business forward. Many business leaders ignore their weakness in this area because they fear impacting their financial goals. Business priorities are usually strategic in nature or are items that do not show directly in the P & L, such as strategic initiatives that strengthen customer loyalty. The natural tendency is to worry about today, which is why most strategic business plans are never executed.
5 Pitfalls to Setting Your Annual Priorities
Beware of the following common pitfalls while creating a good business plan and setting your annual priorities:
1. Poor Clarity
A business initiative should be described with such clarity that a stranger would know what you are trying to accomplish and be able to hold you accountable.
2. Short-Term Focus
Some business plans focus on initiatives that affect only the most immediate quarterly goals. Every business needs to make money and cover its expenses, but the problem occurs when you are so focused on the short-term that you are not able to spend time making the changes that are necessary for making quantum leaps.
3. Ignore the Trends
I see companies that continue to ignore the fact that the traditional ways in which their customers purchase their products and services have changed. Blockbuster didn’t recognize these trends and has been replaced with forward-thinking companies like Netflix.
4. Accepting Your Weaknesses
Knowing that you have weaknesses is not the same as doing something about them. Every company should make it a priority to seriously address, if not eliminate, at least one weakness per year.
5. Over Ambition
Too often leaders see all the things they are unhappy with and try to turn initiatives into priorities. Generally, it is good practice to have 5 or fewer annual priorities. I prefer 3.