Here's a scenario many of us have experienced: The CEO sets the revenue goals in the annual business plan; the plan is handed down; and the business units scramble to make the numbers.
Only one thing is wrong: We don't know how the decision was made about what matters.
Figuring out what should shape decisions before actually considering the various options available increases the relevance of the final decision. It's a reminder that you're not seeking which strategy is the right one, but which criteria will lead you to a strategy that is right for your organization. Accordingly, it's valuable to consider criteria filters and match them against the many possible strategies.
Deciding what matters leads to solid criteria development. Deciding what success looks like will drive what matters. There is a link between what matters in a general sense and what matters to your business unit or organization. Follow these four steps to figure it out:
1. Determine what success looks like
Paint a picture with as many defining elements as possible. What does the financial piece look like? Add in whatever marketing and communications you'll need to get the story out internally and externally.
If success includes growing the business, perhaps becoming No. 1 in the market, what does that entail? What steps will get you there? Do you have the people to make success possible, are their skills being used to greatest advantage, and are the roles they've been assigned the right ones
Make changes before, rather than after, implementing the strategy. Check R&D and manufacturing—what part will they play, and how much more needs to be done?
2. Decide what matters in a general sense
Are there long-held preconceptions that will hold back the team or make the strategy difficult for the organization to adopt? Can they be mitigated or shifted so that they don't get in the way? Similarly, what new beliefs are influencing the team—and so might influence the situation?
If there are any new circumstances—an economic change, the sale of a subsidiary, or other changes—be sure to note those and how they may alter the situation. And if the company has adopted any new initiatives or has new intentions that will change the strategy, they must be accounted for.
In one client's situation, the board urged the CEO to attack new markets. This changed the resource allocation and caused budget constraints.
3. Figure out what matters specifically to you
Now do the same exercise, but make it particular to the company, the business unit, or the team. What matters to the group and why? Are these the same things that matter to the executive team (e-team)? If not, what groundwork is needed to get buy-in and a budget?
4. Review the solid criteria
After taking the first three steps, you'll have almost all the criteria you've been seeking in the various categories you need to consider. The following list provides those criteria and specific examples:
- Size: It is big enough to be a material focus for the division.
- Timeframe: It matches our needs in number of quarters/years to yield.
- Portfolio: It matches our portfolio of products, services, or offers.
- Region: The market will appear in regions where we are strong.
- Certainty: We have the right data available to make decisions
- Affinity: Our e-team really wants to do this.
- Opportunity: Is the market big enough to support us?
- Defense move: We'll do it because we don't want our competition to.
- Sales model: Are we set up to sell it? Can we be?
- Customer: The account type matches buyers that we know how to reach.
- Leverage: It uses our core strengths (product, channel, know-how) best.
- Service: We can perform to meet customer-satisfaction expectations.
- Profitability: It supports add-on of items like professional services.
Articulating success criteria serves several purposes. It allows you to avoid being swayed by impressive lobbying and persuasive arguments that don't stand the test of time and sometimes lead you in divergent directions.
And although your success criteria may not always be exactly right, the process is fluid. By articulating success criteria, you'll know when a review becomes necessary. If a current market opportunity is too small to be of material focus, when the market size increases you'll know that you can review the decision.
Take the first step (it's free).
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