Jun 1 2014, 7:32pm CDT | by Forbes
Here in New Jersey it is Spring and that means it is Garage Sale Season. People everywhere determined to clean house and do away with the things they no longer need, but cannot bear to trash. The fundamental re-prioritizing of what we value is a lesson that we only seem to learn after we have filled our lives to overflowing; buying that vegetable juicer to support our last cleanse diet, or that mustard yellow coat that was in season for five minutes a decade ago. Out with the old to make room for some new.
Something similar happens in business but it is usually related to major leadership and strategic shifts rather than a seasonal change. Frustration mounts. Something snaps. The need to clear the decks arises suddenly and comprehensively from urgency and necessity.
How did we get here?
Several years ago we were working with a client in the mountain states of the USA. A mid-sized service company, this client had become frustrated by their inability to deliver their strategic initiatives. They asked for an assessment of their program and project systems. Deadlines were being missed. Was it a capability issue? Did people not know how to manage projects effectively? How could they deliver promised results?
After several weeks of assessment across this 500-person enterprise we arrived at a startling and initially unbelievable conclusion. They had 834 named projects. Eight hundred and thirty four! We had met the organization equivalent of a hoarder.
Making way for the new
The inability to recognize not only the organization’s capacity as well as define clear and unambiguous strategic goals meant that everything was fair game. One project leads to ten more all started under the guise of being supporting, or adjacent, or capitalizing on the original, still-undelivered project’s stated goals. Over time the company had simply filled itself to overflowing with what it wanted, but had done little to determine how to deliver what it truly needed.
The arrival of Steve Jobs at Apple in 1996 led to one of these moments. Apple had been struggling with a proliferation of products and business models and Jobs began to clear the decks. With the ousting of Gil Amelio as CEO July 1997 Jobs stepped in as the interim CEO and began his work in earnest furiously working to restructure the company’s product line. The first step was discontinuing Apple’s licensing of its operating system to third-party computer manufacturers; the second was to develop the Bondi Blue iMac. This product signaled to the world that Apple was going to strategically focus on design as a hallmark of its products. Its successful introduction bought the company time to restructure.
A similar situation was triggered at Ford Motor Company in 2005 when their corporate bonds were downgraded to junk status. Over the course of the next seven years, through the Global Financial Crisis (or as my British friends refer to it, ‘The Great Unpleasantness’), leaders at Ford led by William C. Ford, Jr. and Alan R. Mulally worked to streamline and prioritize the product line and platforms. Ford reduced nameplates (essentially brand names for product lines) divesting or eliminating them altogether. In the process they shed marquee brands Aston Martin, Land Rover, Jaguar, Volvo and Mercury. They simultaneously worked to raise the company’s borrowing capacity by $18 billion, placing most corporate assets as collateral including the iconic Ford logo.
As John Casesa, now Senior Managing Director at Guggenheim Partners, said in The Detroit News at the time, “This is Ford’s one last shot to get it right. If the restructuring plan is not executed flawlessly, the company will lose its independence.”
Avoiding operational clutter
Simply put, business systems on a small scale may more swiftly be overcome by the complexity caused by lack of prioritization. A better approach is to consider the strategic implications of all decisions and use that to weed out the ‘nice to have’ versus the ‘must do’ projects and initiatives. The benefit of clear strategy is hard to deny. Understanding the true value of a strategy as a prioritization tool is the key. As Alan Brache, cofounder of RummlerBrache and head of APB, LLC, once told me, “Strategy is most valuable for what it tells you not to do”.
After several years of struggling performance, many of my clients are seeing an abundance of opportunities. Given my focus on helping them develop their enterprise innovation capability I am often gently reminding them of the virtues of keeping some slack in their systems to try new ideas, to experiment, to learn and grow. It is an ongoing battle between what they can do now and what they want to be in the future.
Smarter choices up front
A great example of the value of prioritization can be seen in the recent decision of 37Signals to consolidate everything (including the company name) into aligning around their core product BaseCamp. They call it, “doubling down on simple”. Similarly, the music streaming service Pandora recognizes that it can only do so much. Leaders there ask themselves at the beginning of each quarter, “What would be stupid for us not to do in the next 90 days?”. Driving this question is addressing how far you can reasonably think and plan ahead when you’re in period of accelerated growth.
To make sure that they only commit to those opportunities that they will deliver, Pandora also goes to great lengths to make their prioritization process visible—employing trusty Post-It™ notes—and working in full group so that there is a shared understanding. At its heart they institutionalized the company-wide understanding that they had limited resources and made choices accordingly./>/>
What happened to our client with the massive over-commitment? They went on a project-killing spree. If the project didn’t have executive sponsorship and allocated resources, including budget and people, it was decommissioned. In the space of a month they reduced their load to less than fifty projects with a commitment to evaluate the portfolio on a monthly basis to prevent the distraction of project proliferation.
Our world is full of opportunity, a fact only too readily recognized by entrepreneurs. As opportunity forms the basis of the entrepreneurial spirit, management of priorities is a critical skill to maximize the benefits from the opportunities you pursue. Don’t be opportunity hoarders. Rather than adding to the mix, be explicit about what will get you further, faster and commit judiciously.
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