What do I mean by prioritizing your priorities? Why is it important? Why is it hard?
It’s fairly easy for any business to come up with a dozen ideas for improvement – and most businesses wouldn’t stop there, generating dozens of possibilities. The challenge for any leadership team is to pick the right priorities to focus extra attention on among all those many options.
It’s easy to say, “You should have 3 big rocks that you focus on.” It’s muuuuch harder to say, “These are the 3 rocks that will give you the best outcome.” Why is it harder? Because there are many variables to consider in coming up with the answer. I’ll highlight 2 as examples:
- What’s the balance between financial outcomes and intangible outcomes? You could work your staff hard for two years, get your financial results up, and then sell your business for great personal gain. But many small companies have more connection to their employees, and so are willing to support work-life balance at the expense of financial performance. In that case, you can’t just decide on priorities based on financial ROI.
- What if short-term success and long-term gain are not aligned? Often they aren’t! Short-term, it almost never makes sense to upgrade your systems. But if you never upgrade systems, that will eventually undermine your results. How do you balance those competing interests? How do you decide whether long-term payoff is the right thing to aim for now?
So this is a hard task. Why not just avoid it?
Because focus is a key part of success. Spread yourself too thin, and you won’t have the energy to see your initiatives through to success. As we all know, juggling 6 balls is far harder than juggling 3 balls.
Although there are tools that can help you prioritize your priorities, this is not something that is driven by tools. A SWOT or Gap analysis will not solve this problem. A 1-page sheet that puts long-term vision, annual goals, and quarterly objectives…will not solve this problem.
The center of this solution is wisdom and judgment. It takes experience, insight, creativity, foresight, and thoughtfulness to prioritize your priorities. Whereas operating a business is more akin to an industrial “assembly line” process, guiding a business is a craft that has as much art as science. That’s why venture capital looks foremost at people when considering an investment.
One of the great things about working with Stage 2 companies is that there is usually a strong team operating the business, and any gaps they have in operations can usually be filled with a toolkit from EOS or e-Myth or Rockefeller Rules. Whether they are a strong team leading the business depends a lot on their ability to prioritize their priorities and pick the right things to choose on.
I’ll be posting a self-assessment soon for you to gauge how your team is at leading your business. So…well…this is just the placeholder until I get that! But if you’re reading this and are interested, send me an email – or give me a call and I’ll share what I have in draft form.
The Futurist magazine had an article several months ago titled, “Innovating the Future: From Ideas to Adoption” by Peter Denning. In it, Mr. Denning described “the work of innovators,” which included 8 types of activities that need to take place for innovation to happen.
The article is interesting to consider when thinking about how small business innovation happens – especially for Second Stage companies.
Remember, growth companies are often led by very inventive and creative people – which is a huge asset in the start-up phase. But in Stage 2, that needs to be supplemented with structure and discipline. Denning’s 8 innovation practices offer a good model to show what’s going on in growth-company innovation.
Second Stage companies are good at these 4 of Denning’s innovation practices:
- Sensing new possibilities
- Envisioning a compelling story about the possibilities
- Leading and mobilizing people to adopt innovations
- Embodying the innovations in their own actions
On the other hand, Second Stage companies are typically weak at the other 4 of Denning’s innovation practices:
- Gaining preliminary customer buy-in to start innovating
- Overcoming resistance to change and creating customer commitment to try the innovation
- Helping customers integrate the innovation into the environment and stick with it
- Managing all commitments to completion
What’s the difference between those 2 lists? The first one – the things Stage 2 leaders do well – leverage inventors’ strengths of vision and passion. The second one – the things Stage 2 leaders struggle with – involve dealing with the complexity of customers, teams, cultures, markets, and projects.
As I say again and again, the only way to deal with all that complexity is to create some structure, process, and systems to handle it. Not a lot…but some.
All 8 of Denning’s innovation practices are important to commercializing new ideas. So, it’s no surprise that many Second Stage companies have a lot of great developments going, but struggle with making money from them.