CEOs and other executives are finalizing their business strategies and financial plans at this time of year. With great enthusiasm, their thoughts turn from strategy to implementation. My frequent advice to CEOs is to have no more than seven top priorities for the year and to kill two former initiatives that are no longer driving value. However, many CEOs and division presidents are slow to head this advice.
One executive I remember was a whirling dervish of divergent priorities and demands to his direct reports and anyone else. Too many priorities, articulated like spraying machine gun fire, and he would confuse his team and his workforce. He was a deceptively engaging and clever leader, smart, and never at a loss for words. He would frequently speak first in meetings and talk over others who were trying to contribute, point out errors, or disagree. What came with his verbal assault was a demanding, berating, and autocratic leadership style.
He once had 56 priorities for his R&D team. During one January strategy session, I asked him how many of the 56 were funded, and he said about 18. How could he expect the work on the remaining 38 to be completed? How would his team know which were the funded 18—his real priorities? When he moved on, his successor, after working with staff and external experts to gather data, looked at the situation dispassionately, and allowed everyone to air their differences. Then, he cut the R&D priorities to the best 15. The company begin to see dramatic improvements with innovation during the next year.
When workers have too many priorities in a constantly changing environment, they learn to prioritize for themselves the objectives they can accomplish most easily and what they are best at doing.[i] Too many priorities can lead to employees ignoring the top priorities that should be their focus.[ii] Strategic focus is lost as lower-level managers try to make sense of their work existence and prove their value.
Indeed, our fast-changing, digital, and global world will mean change for the organization’s top priorities as leaders adapt to the new economic and competitive realities. CEOs need to develop agile, collaborative, and confident organizational cultures to rise to the new challenges. Confusing employees, however, does not focus energy, motivate achievement, and lead to results.
My advice to executives as they begin the new year and set organizational priorities is always to start with the company’s higher purpose for humanity and the value of the products and services they provide to clients or customers. This is especially important in a constantly changing world. The company’s purpose, its values, and culture of how employees work together and achieve success are the fabric that steadies and focuses the company ship in a turbulent sea.
Next, follow these steps:
- Keep your top priorities to a very easy to understand seven (including the annual operating plan and sales plan) so they are memorable. Speak to them at every opportunity and provide frequent updates on progress throughout the year.
- For each of the seven, have a clear success criterion whether it is a new profit number, sales number, implementation of a new technology, or expansion into a new region. Make it memorable!
- Look for former initiatives that are now out-of-date or failing and say you are no longer working on them and divert those valuable resources to other projects. Many companies hate to cut an initiative that proved to be a bad idea or simply didn’t work out because they don’t want to admit failure or look stupid. Why waste more time on a failing initiative? If it is a failure, believe me, your employees already have discovered it.
- When an initiative is breaking new ground in the organization or requires substantive change and innovation, be sure to clearly define communication flows, decision-making rights, and escalation paths for issues lower-level leaders cannot decide on their own. Publicly reward early adaptors and successes.
Kicking off your annual goals and priorities and setting the vision of the organization is one of the most important activities for any executive leader. Setting the direction, articulating the priorities in a compelling way, and realigning your organization around your priorities is only a start. Be sure to continue the dialogue and report on progress through out the year.
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and managing partner of InnovationOne. He works with companies to improve their recruiting, HR operations, and develop extraordinary leaders, teams, and cultures of innovation. His new book is Hack Recruiting: the Best of Empirical Research, Method and Process, and Digitization. Subscribe to his weekly blogs at www.VictorHrConsultant.com.
[1] “Common Rater Errors” (2014). Human Resources. Trustees of Dartmouth College. Retrieved from www.dartmouth.edu/˷hrs/profldec/performance_management/rater_errors.html.
[1] Paul A. Mabe and Stephen G. West. (July 1982). “Validity of self-evaluation of ability: A review and meta-analysis.” Journal of Applied Psychology, Vol. 67 (3), 280-296. Retrieved from http://dx.doi.org/10.1037/0021-9010.67.3.280.