I once asked an executive team to identify its most important priorities for the coming year. By the time we finished the discussion, there were thirteen of them on the board.
I pointed out that they had just demonstrated they had no priorities at all.
This happens constantly in growing businesses. The CEO has three strategic initiatives. The board adds two more. Sales wants to enter a new market. Marketing wants to reposition the company. Product sees an opportunity for another offering. Operations needs a new system. Someone has discovered an exciting application for AI, which immediately finds its way onto the agenda.
None of these ideas is necessarily bad. In fact, most of them are probably quite good. And that's precisely the problem.
Strategy isn't about distinguishing good ideas from ridiculous ones. You don't need a management team to do that. Strategy is deciding which good ideas deserve resources and which good ideas you're willing to ignore.
That requires something many management teams find remarkably difficult: saying no.
Companies rarely suffer from a shortage of opportunity. They suffer from an excess of it. As a business becomes successful, opportunities multiply. Customers ask for more. New markets appear attractive. Competitors create pressure. Employees bring forward ideas. Technology makes things possible that weren't practical two years ago.
The natural response is to pursue more.
The intelligent response is to become more selective.
Yet I've watched executives congratulate themselves on reducing a list of twenty initiatives to twelve. Twelve priorities aren't much better than twenty. They're simply a slightly shorter list of things competing for the same people, capital and management attention.
There is a basic economic reality here that somehow disappears during strategic planning sessions: resources are finite.
Your best people have finite time. Your customers have finite attention. Your company has finite capital. And, perhaps most importantly, the CEO and senior management team have a finite capacity to properly oversee important work.
We recognize financial constraints immediately. We routinely ignore management constraints.
Consider a company pursuing ten strategic initiatives simultaneously. Each has an executive sponsor. Each requires meetings, analysis, updates, decisions and coordination among functions. Each generates emails, presentations, reports and follow-up activity. The individual demands may appear modest.
Collectively, they can consume the organization.
Then something predictable happens. The initiatives continue, but progress slows. Meetings multiply. Deadlines move. Accountability becomes vague. Employees become frustrated because they are being asked to accomplish six things while being told all six are critical.
Management concludes there is an execution problem.
Perhaps.
But execution is often blamed for a problem created by poor strategic choices.
You can't overload an organization and then criticize it for failing to focus.
A useful exercise is to ask each member of your leadership team, privately, to write down the company's five most important priorities. Don't allow them to compare notes beforehand.
Put the answers on the board.
If you have seven executives, don't be surprised if you receive fifteen different answers.
That tells you far more about your strategy than the beautiful presentation prepared for the board. If your senior leaders don't agree about what matters most, imagine what's happening three levels below them.
There's an equally revealing second question: How much of your time did you spend on those priorities last month?
Executives sometimes describe something as strategically critical and then admit they've spent virtually no time on it for six weeks.
That's not a priority. It's a wish.
Resources reveal priorities far more accurately than PowerPoint does.
If you tell me customer retention is critical, but nobody owns retention, there is no meaningful retention target, compensation doesn't reflect it and management doesn't regularly discuss it, I don't care what the strategic plan says. Customer retention isn't a priority.
Follow the money. Follow the people. Follow the CEO's calendar.
That's where you'll find the actual strategy.
I've found that executives benefit from applying a fairly unforgiving test before allowing another initiative into the organization.
What will this materially change?
Will it increase revenue? Will it improve margin? Will it increase enterprise value? Will it materially strengthen our competitive position? Will it reduce a significant strategic risk?
And by when?
That last question matters because almost any initiative can be defended if the time horizon is sufficiently vague.
“We believe this will strengthen the brand over time.”
Wonderful. What does that mean?
“We need this capability for the future.”
Which future?
“This positions us for growth.”
How much growth, from where, and when?
Those aren't hostile questions. They're management questions.
If the executive sponsoring an initiative can't establish a credible relationship between the resources being requested and a meaningful business outcome within a reasonable period, management should reconsider the investment.
That doesn't mean every initiative has to generate immediate revenue. Cybersecurity investments may reduce catastrophic risk. Leadership development can strengthen organizational capability. Technology investments can improve productivity. Research can create future options.
But management ought to be able to articulate the expected result.
Otherwise we're funding activity.
And activity is dangerously easy to confuse with progress.
This becomes particularly interesting in private equity-backed companies.
A PE investment thesis can identify half a dozen legitimate sources of value creation: improve pricing, increase sales productivity, enter adjacent markets, improve margins, make acquisitions, increase recurring revenue, strengthen management, introduce new products.
All perfectly reasonable.
But an investment thesis isn't an operating schedule.
The fact that six opportunities exist doesn't mean all six should be activated Monday morning after the transaction closes.
I've seen management teams begin pursuing nearly every element of a value-creation plan simultaneously because everyone is understandably eager to demonstrate momentum.
The result can be precisely the opposite.
The CEO is now running the existing business while changing pricing, recruiting executives, integrating an acquisition, rebuilding the sales organization and introducing a new reporting structure. Employees who were successfully running the company three months earlier suddenly feel as though everything they do is being reconsidered.
Then the board wonders why execution is slipping.
The more useful distinction is between a value-creation opportunity and a current operating priority.
They're not synonymous.
An opportunity can be highly attractive and still be wrong for this quarter. Timing matters. Sequence matters. Organizational readiness matters. Management capacity certainly matters.
The relevant question isn't, “Is this a good idea?”
The relevant question is, “Is this more important now than the other things competing for the same resources?”
That's a much harder conversation.
It's also where actual strategy begins.
One practice I've found valuable is creating a stop list alongside the strategic plan.
Strategic planning almost always produces additions. We're going to enter this market, introduce this product, improve this process, implement this technology and build this capability.
Fine.
What are we going to stop?
Which market won't we pursue? Which product won't be developed? Which internal initiative will be suspended? Which meeting disappears? Which customer segment will receive less attention? Which project survives primarily because a senior executive sponsored it two years ago and nobody wants to suggest that perhaps it has outlived its usefulness?
This is where the discussion becomes uncomfortable.
Stopping something requires admitting that circumstances have changed, an assumption was wrong, or another opportunity has become more important.
There may also be sunk costs involved.
But money already spent has no opinion about money you haven't spent yet.
The question isn't whether an initiative once made sense. The question is whether the next dollar and the next management hour belong there.
Strong executives are willing to make that distinction.
Weak organizations allow initiatives to become permanent residents.
They acquire staff, meetings, budgets and constituencies. Eventually nobody remembers exactly why they were created, but eliminating them becomes politically more difficult than continuing them.
That's how complexity accumulates.
And complexity has a cost.
Imagine instead that your management team could identify three outcomes that genuinely matter over the next six months.
Not ten. Three.
Perhaps they are improving customer retention, increasing sales productivity and raising gross margin.
Now something useful happens. Every new idea has to compete against those three outcomes.
Someone proposes geographic expansion. Does it materially contribute to one of the three? If not, perhaps it waits.
Marketing proposes a major rebranding effort. Important? Possibly. More important than the three agreed outcomes? That's the question.
Product sees an attractive adjacent market. Good opportunity. Wrong time.
Saying “not now” isn't the same as saying “never.”
This is an important distinction because executives often fear that prioritization means abandoning opportunity. It doesn't. It means sequencing opportunity.
A company pursuing three important objectives exceptionally well is not less ambitious than a company pursuing fifteen poorly.
It's simply more likely to produce results.
There should also be consequences attached to declaring something a priority.
If an initiative is genuinely important, management should be able to answer some straightforward questions. What measurable business outcome are we trying to change? How much should it change? When should we expect the result? Who is accountable for producing it?
And there's one question I'd insist upon:
What are we going to stop doing to make room for this?
If the answer is “nothing,” you probably haven't established a new priority.
You've simply added more work.
There's a significant difference.
Companies don't usually run short of ideas. Nor do they generally suffer from executives incapable of identifying opportunities.
The scarce capability is judgment.
Where should we place the next dollar? Where should our best people spend their next hour? Which opportunity deserves disproportionate attention? Which attractive opportunity are we prepared to postpone?
Those are strategic decisions.
So at your next leadership meeting, forget the strategic plan for an hour. Put every current “priority” on the wall.
Look at each one and ask what it will materially change: revenue, margin, enterprise value, competitive position or strategic risk.
Ask when.
Ask who owns the result.
Then ask what you're willing to stop doing so that it succeeds.
Some initiatives won't survive the conversation.
Good.
Your organization probably doesn't need more priorities.
It needs fewer excuses for avoiding choices. If this resonates with you and your organization, contact Efficio for a free consultation.