Five Rules for Setting the Right Priorities
by Ram Charan

Posted on Wednesday, April 11, 2007, 12:00AM

As the old saying goes, if you don't know where you're going, any road can get you there. That's why you need to establish specific goals.

But once you have those goals, you need to create a path for achieving them. In other words, you need to turn those goals into reality, and that's where establishing priorities comes in.

The Road to Fulfillment

Priorities are the road the organization follows to accomplish the goals. Or, to be more precise, they're the roadmap that organizes and directs your business toward meeting its objectives.

The right priorities keep the organization's physical and emotional energy focused on the important things, in the midst of all the day-to-day stress of life at work where everything can seem urgent and important. Priorities provide clarity and focus for you -- and for the people who work for you.

This means, of course, that the priorities you establish must be laser-sharp, clear, specific, and most of all doable. There's nothing that drains the energy out of an organization faster than failing to complete an impossible task.

Step by Step

Priorities will of course vary from business to business and from time to time. What is constant, however, is the skill required to select and effectively implement them.

You can build your know-how of setting priorities by doing these five things:

1. Focus.

There's a tendency to set too many priorities. People do so because they think they must do everything, they want to cover all their bases, or they're afraid of choosing the wrong ones. Whatever the reason, this approach is simply not practical.

If everything is a priority, nothing is. Having too many priorities is the same as not having any, because you'll spread your finite resources too thin. When it comes to priorities, you need to identify a handful -- and that's the right word; there should be no more than you can count on one hand -- that are absolutely vital to your organization. That's where you concentrate your energy.

2. Communicate, communicate, communicate. Repeat, repeat, repeat.

You have to sell your ideas and get buy-in from the people who will have to carry them out, in order to ensure that they don't deviate from the course you've established.

As a rule, people are good listeners. So why do you need to constantly repeat your message?

First, because people listen selectively. The first time you state the priorities, they might filter out any messages that have to do with changing how they do their work. Repetition reminds them they must adjust their attitude and approach their jobs differently.

Their initial focus is often at the micro level. They are concentrating so much on how what you're saying affects their area that they miss the bigger picture. It may take a while to shift perspective to the bigger picture -- the macro view.

For example, often in a turnaround situation, conserving cash is a key priority. Getting that message to sink in could change how the people in marketing, to choose one department, approach their job.

Typically, marketers lobby to create large amounts of inventory to meet potential demand. Knowing the importance of cash could get them to work with production people to develop more reasonable forecasts so the company can reduce inventories without risking stockouts. Or they might change their ad strategy, going regional instead of national, to conserve ad dollars.

3. Be sure you have the right people in place to carry out the priorities.

If people lack the skills needed to act on the priorities, you won't meet your goals. This means you must assess your direct reports and your organization's talent overall. Do your leaders know how to work horizontally and across silos? Making priorities a reality almost always requires them to do so.

Do they have the necessary capabilities? To stay with the marketing department example, people who've worked only in advertising and promotion may not have the skills to help a company become customer-centric, if that's one of the new priorities.

4. Reallocate resources.

Allocating the organization's limited resources makes priorities real. The flow of resources -- people and money -- is the true indicator of where a company is headed. Setting priorities without allocating sufficient resources to achieve them tells everyone that you weren't serious about the priorities in the first place.

You must also withdraw resources from areas and activities that are no longer tied to the priorities. This has a dramatic impact on the organization.

Your decision is visible -- people will see that one unit is going to get more resources, another less -- and invariably it results in altered power bases within the firm. The biggest business unit might no longer get the lion's share of resources if its market is slowing.

You can help leaders withstand a shrinking budget by explaining simply, clearly, and repeatedly why you've chosen the priorities you have.

5. Create a feedback loop.

You need to know that your message about the new priorities got through. To make sure, create a mechanism to find out if behavior has changed in light of the new priorities, and if resources, including people's time and attention, have in fact shifted.

Successfully implementing the new priorities will energize the organization. Discovering where things aren't going as well will give you a chance to improve.

The Right Stuff

There may be literally hundreds of steps an organization must take to meet its goals. But you have to determine which four or five are absolutely vital to ensure that your company moves forward.

There's no sure bet that you'll select exactly the right priorities to achieve your goals. It will take some emotional fortitude to choose them, stay focused on them, redirect resources in light of them, and follow through so they actually get done.