At a recent client meeting you could sense the slow burn of frustration on the supply chain executives face – despite an excellent pedigree to deliver high performance, extensive cross industry success – his forehead lines were visible – when he asked – how do you “TURN the BEAST” around when we have so many projects and versions of priorities that it seems impossible. The BEAST was his company. AROUND was the financial performance. I asked – “what criteria do you use to say YES or NO to strategic projects now?”
There was a collective moment of silence around the table –meaning – there really were no common criteria being applied.
This is one of the most common issues we observe as a point of frustration for CEO’s and executives – too many projects or initiatives going on. The never-ending requests for “more resources”, more money, more time grind on a CEO’s ear and are symptoms rather than causes of “not being able to say no.” Funny – it’s a simple two letter word that when used in the strategic context is significantly important and has a more powerful impact to the EBITDA line than being able to say yes. …so why do many organizations fail to say no?
The cause of not being able to “say NO” (which is a conscious chosen alternative) is due to not making a common set of strategic criteria visible, measurable, and quantified. You may think you have made strategic criteria visible but unless the criteria can be readily recited by the executive team your chance of any real focused effort and cohesion within the ranks is close to nil.
The result of invisible strategic criteria is as one would expect:
- debating alternatives ( launch this product anyway, start this initiative as well, or bring on more resources to finally get it done –all well intended by not focusing on the cause)
- creating criteria that skews priorities for a particular function or region
- thickening walls between functions as they compete for resources
- developing inertia creeps up and becomes a norm before anyone is aware
These points of non-performance are all damaging and are the result of not having criteria to guide your organization’s strategic and operational decision making. The good news?
There is a simple fix- which does require discipline– starting with the CEO and executive team – but one that pays significant value the first time it is applied:
- Make your criteria visible and allow all strategic projects or priorities to be equally evaluated against the same criteria.
- Encourage those in your company to test their “burning priorities or projects” against the company-wide criteria and you will in fact be surprised that many projects melt away.
To improve your organization’s use of strategy to guide decision making and remove the effects on your organization consider making your strategic criteria visible. Below are a standard starter set that will initiate within your company the ability to say no (or YES) and which you can TEST and SCORE alternative projects against.
|The cause of not being able to “say NO” (which is a conscious chosen alternative) is due to not making a common set of strategic criteria visible, measurable, and quantified. You may think you have made strategic criteria visible but unless the criteria can be readily recited by the executive team youMaximize Revenue||Absolute $||X to X|
|Does it Maximize Revenue Growth (Share)||% CAGR||X to X|
By making this issue visible as well as the strategic criteria to guide decision making you will be surprised at how quickly you can turn the beast around. High performance is a decision making discipline.