We’ve been through (a) concept-type priorities, (b) specifics, (c) tough-minded initial stack-‘em prioritization, and (d) scrambled assignments: To conclude this topic today I’ll address (e) mid-course learning-based corrections, and (f) event or decision driven reprioritization.
(e) By launching priorities with very specific goals, making the list of specific possibilities extensive, and continuously challenging the team via review of those specifics, you will create many mid-course learning-based corrections. I previously laid out the specifics for the “get our balance sheet credit-worthy within 6 months” priority. Remember we created this conceptual priority, and then laced it with specifics; specifics created partially by judgment and partially by intuition. So now we’ve been underway for a while, and the team assigned to this priority creates an interim report: “we’ve discovered that we have been billing 5 days after shipping so are losing 5 days on our collections; by billing on the day of shipment we should save $3M not the $1M we estimated”, “collection procedures, originally targeted at $4M, is not achievable, customers are only 2 days late on average so practically no savings are available”, “customer terms are longer than competition by 10 days and gives us no competitive advantage; by correcting to market we can achieve $5M vs. the $2M projected”, “in addition, via this exploration, we found a new opportunity--payments are mostly coming in by mail vs. electronically so by educating and facilitating we can save 2 days, $1.5M” . The result is that the new target for the A/R portion of this objective is now $9.5M vs. the original $7M target. It goes on and on.
(f) When you face real-time decisions, your initial prioritization gets put to the stress test. Two of our initial priorities were #1 cash creation, and #3 re-establishing our market place product quality image. We know that all four of our priorities were considered mandatory, but we initially determined that #1 cash creation just had to be ranked higher than #3 product quality image because, without meeting bank covenants on cash, the company will be out of business. So, because of that, initially an investment to re-tool several products and to market those improvements was put on hold. However today we’re now assessing new inputs. First, the cash collection actual results have been above target, and those targets have been increased; second our largest customer has made warning threats to remove us from their suppliers list if there was not a quality improvement program in place. Time for a reassessment based on new realities! We now decide that #3 product quality is ahead of #1 cash creation and that specific decision is therefore made; and as a result the priorities will be--da da--reprioritized.
By following steps (a) through (f) your organization is highly engaged in gaining breakthrough results, and you and they are learning rapidly concerning the inner workings of your business and those entrusted to gain further results. The guidelines for “Pick Your Priorities” and for creating a “Living, Growing, Breathing Business Bible” follow.
The CEO's Summary Guide to Pick Your Priorities
o Original management by objective techniques are out of date and so entrenched they are usually manipulated for personal gain rather than organizational benefit.
o Create concept type priorities, those with some wishful thinking but which also that clearly represent the changes required for your organization or survive and then prosper
o Lace each with as many specifics are your imagination can create, using both knowledge and intuition in the process
o Go through the difficult procedure of stack ranking each priority; make your management team recognize that the initiatives or investments outlined in item #4, for example, will not be funded until the specifics in item #2 are achieved.
o Learn more about your organization and gain fresh thinking by assigning the priorities to others than the obvious functionaries
o Learn more about your business by thrashing through many mid-course learning-based corrections to your initial specifics
o Learn more about your progress by reassessing the specifics and prioritization as new information develops on your path to excellent performance
I have a dozen examples of this process being put into place and achieving amazing and amazingly rapid progress, both in terms of results and in learning for the next round of potential achievements. Completely illustrating even one of them would be a rather voluminous task so you'll just have to take my word for it!
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