Remember, these 4th generation objectives are not a tool simply for the purpose of calculating bonuses.The primary is to have your organization grow smarter, in an exponential way, about your markets, your business, your company, your capabilities and yourselves. Last week I discussed (a) concept-type priorities, and (b) specifics for each even though your knowledge base is currently insufficient. This week (c) tough-minded initial stack-‘em prioritization, and (d) scrambled assignments. Next week I'll finish with (e) many mid-course learning-based corrections, and (f) event or decision driven reprioritization.
The priorities you develop represent the core goals of your corporation. For illustration, say you have finalized on four priorities; #1 cash creation, #2 establishing a market presence in China, #3 re-establishing our market place product quality image, and #4 reduction of expenses to fit with revenue projections. You say “it is imperative to do all of these to survive”. But there are many conflicts:
• #1 will require tightening customer payment terms and reducing inventories for rapid-to-market sales opportunities; in conflict with #2
• #4 will require a reduction in field personnel and technical support, in conflict with #3
• And on and on as additional uses of cash clash with the need to increase cash; if you’ve written these priorities with sufficient specificity and detail, there will be many conflicts.
So here’s where the real learning starts. Your team must force rank these four priorities. Stack ranking is an old idea applied to various lists, such as personnel. Don’t be lazy and do the hard work, getting into real specifics and tough tradeoffs. You may have a half-day debate on the merits of gaining cash by reducing inventories vs. gaining a market presence in China via placing inventories on location. Force ranking done correctly is tough, hard work; especially if you conclude that your company cannot survive without both these priorities being implemented successfully. But the result will be astounding, measured in learning about your business’s dynamics, learning about the abilities of individual mangers to find solutions, gaining creation of new ideas, and making big jumps in the very specific clarity of your overall direction. These outcome products make your organization smarter, faster, and more together.
Scrambled assignments is another breakthrough. 99.9% of CEO’s would select the person on their staff most closely aligned with a given priority to be one in charge of it: #1, cash creation, would always go to the CFO. Change the paradigm. Learn many things simultaneously. Put the Operations managers in charge: what does that accomplish? How well can the manufacturing manager run a project when he doesn’t have direct authority (will need inputs and insights from all disciplines)? What insights might result from a completely different perspective? How well do other functional managers (like the CFO) deal with reporting (on this priority) to someone else?
This is hard work, but the bang for the buck is high!
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