Identifying Critical Priorities
Have you identified the small number of critical priorities that will help ensure your company reaches its goals for 2017? Have you specified which is the TOP critical priority in case you need to reallocate resources in the event of an unforeseen complication?
Here is a simple way to choose your 2017 top critical priority: first, identify your critical number. The critical number is a metric (Key Performance Indicator, or KPI) that is directly tied to the most important priority for the year for the company.
Of all the metrics you measure, the critical numbers are the most important. A critical number drives an annual priority (or objective) that you want the entire company to focus on and achieve. Imagine if you could get the whole company pulling behind this priority. Just think about the progress you would make if everyone was working together to make one specific thing happen!
How do you pick a critical number? Ask yourself, "What is our burning issue for this year? What do we need to improve most? What is our top priority for this year?" There's often a strong temptation to choose revenue as the critical number, but try to think more specifically about what you would like to improve about revenue. Revenue can be improved in so many different ways – increased number of new customers, increased pricing, increased frequency of buying – think upstream (leading indicator) and try to decide specifically what you want more of and get your team focused on something more narrow that they can control.
After you set a critical number, we suggest that you set a second number, which we call the counterbalance number. Why? What if you had a tug of war with only one side pulling? You would get out of balance quickly. When you apply company/department resources to flex your muscles on one specific part of the company/department, you want to consider any negative implications on other parts of the company so you can counterbalance the effect.
Delta Airlines provided us with a great example of the need to use counterbalancing numbers. Delta was driving hard to improve their on-time departures metric -- but they focused so hard on on-time departures (a Productivity metric), they forgot about the People they were trying to serve. By focusing only on on-time departures, they started cutting corners and frequently were unable to load all of the bags on each plane. This left the most important People – their customers – without their luggage and feeling rather angry. Delta began measuring missing customer bags and overall customer satisfaction along with on-time departures, and it forced the company to figure out how to provide on-time departures without cutting important corners. Delta’s metrics now balance People and Productivity priorities.
Once you have your 2017 top priority defined, ask yourself, "Is there a second KPI that is almost as important as our 2017 critical number?" If the answer is yes, follow the same process as above. If the answer is no, congratulations -- your company has a single focus that must get achieved.
We recommend you have no more than 5 critical priorities for the year. And less is more, meaning the less you have, the more you can apply your limited resources to accomplish.
If you’re looking for help in identifying your 2017 critical priorities, let me know.