If you run an organization, consult or coach with organizations, lead an organization, or just want to make sure your organization grows to you have a plan for achieving what you’re after, then this video about business plan coaching is going to be right up your alley. It covers the 3-Step Strategic Planning Process that I use for Organizations, entrepreneurs, and other leaders I coach…
In this video (and below), we’re going to cover Step 2, the “prioritize” step in this business plan coaching process that I use with organizations:
We’ll also talk about…
- The 3 Steps to Strategic Planning
- Why do you need to prioritize?
- 80/20 Analysis
- Strategic Goals VS “Greedy Goals”
- The Theory of Constraints
- How to PRIORITIZE
- What to PRIORITIZE
…but before we do that, here’s a quick review or overview of the three steps to this strategic planning process for any organization:
- Step #1 is called the Capture step.
- Step #2 is where you’re going to take everything you captured in Step 1 and Prioritize it, so it’s going to be a prioritization process.
- And then finally, we have Step #3, the Organization step
01:01 Let’s get into a little more detail about each of these steps:
First, the Capture step:
In this step, all you’re doing is finding every goal, change and solution for this organization and you’re just capturing all of that.
Step 2, Prioritize:
This is where you’re actually taking everything that was captured in the Capture step and deciding what’s most important (and what’s not important as well).
And third, the Organize step:
The organize step is where you’re taking these priorities and you’re structuring a plan that makes sense to everyone. Part of Organization is creating clarity so that your team and you can be clear on,
What were the priorities again?”
01:43 Here’s a really, really important note… Every single step is completed in writing: Capture, Prioritize and Organize.
Today we’re going to cover the Prioritize step, and I’m going to assume that you’ve already completed Step 1. If you haven’t, HERE’S the link to that video, so feel free to check that out before you continue with this video:
But assuming you’ve watched it, let’s go ahead and move on…
02:09 Now, that you’ve captured all the ideas for goals, changes, and solutions for your organization, you need to hone these ideas down into the most important golden nuggets that are most valuable to include in the organization’s strategic plan.
Why do you need to prioritize?
Why do you need to prioritize? The first reason is that organizations don’t have the time, money, and resources to execute everything that you’ve just captured. The great ideas help your organization, but everything else, and this includes “good” ideas, costs your organization something.
02:43 Prioritization is really the basis for all the results that happen in the organization.
Think about it…
Priorities lead to decisions.
Decisions lead to a destiny.
We can all understand that the ultimate destiny that an organization achieves is going to be based on the decisions that happen in that organization.
But the decisions that are made…
…are based on the priorities.
In fact, decisions are simply clarifying (executing, or acting upon) priorities. They’re basically driven by priorities.
03:18 In key decision moments, you need to know what’s most important to make the best decision. The competitor that wins will have executed more priorities and higher priorities.
The bigger problem is that there are so many low priority things competing for and demanding your focus, that If you don’t make a conscious effort to control your focus and decide in advance which priorities you’re going to focus resources on, (i.e., where you’re going to put your money, time, and energy (and the money, time, energy of the organization), you’ll be so pulled by secondary demands that you will soon the find the organization’s in reaction rather than building a business based upon priorities you’ve designed.
04:00 Now, let’s explore some of the basic precepts of prioritization. Let’s start with 80/20 analysis.
In general, 80% of the progress in your business will come from 20% of your ideas, plans, investments, et cetera.
Most of the things in your organization do not produce the results you desire. You need to work out what efforts make up the productive 20% so that you can invest resources, money and effort in those and eliminate or delegate the rest.
- 80% of the progress within the organization comes from 20% of the effort, time, resources, investments, et cetera.
- 80% of the profits and profit growth in most organizations tend to come from 20% of the customers.
So as you review this Capture that you’ve built, this list of ideas and actions and goals, ask,
- What is the 20% of our list that the organization needs to focus its time, energy, and resources on, to achieve 80% of the desired results?
- Are there any common threads between these 20% ideas?
- Are there any additional similar ideas that are just as valuable?
- How could you consolidate the organization’s resources in order to expand or accelerate the execution of these 20% type of ideas?
05:24 Hopefully, you’re getting the point.
This is about focusing energy and power on the most important and highest priority, the most valuable ideas…
- Trying to expand on those
- Trying to have those multiplied
- Trying to put the most into those rather than wasting resources on the other 80% that doesn’t do a lot.
What are less valuable ideas (speaking of what doesn’t do a lot!) that need to be scrapped, sidelined, or eliminated in order to make room for these 20% ideas?
Strategic Goals VS “Greedy Goals”
05:55 Here’s another precept that I think is really important to understand, especially in very small organizations with small teams, and that’s the idea of strategic goals.
Some goals are simply desires for progress in a specific area. Talk to a team member or business owner… they’ll say,
Well, you know, I’d really like to make more money. I’d like to achieve a certain level in revenue”…
…or something like that.
They’re just like, “Wouldn’t that be nice?”
Those are “greedy goals”… goals that are purely focused on the fulfillment of a selfish outcome, with no comprehension of HOW to get there or what it’ll take to achieve it.
06:26 Strategic goals, however, are landmarks along a specific path towards the ultimate desired result. These pathways are strategies that you’ve selected, so it’s a particular direction, it’s a way through the obstacles, or around the obstacles, or under / over the obstacles, towards the “greedy goal” that we all know that we’ve got.
These strategic goals, these strategies, they answer the question “How”…
How specifically will we achieve our desires?”
06:57 The point of strategic goals?
You keep your focus on the strategy that will bring you to the ultimate vision (the ultimate destiny) that you want to achieve, rather than just dreaming about “how nice it will be” once you’re there.
If we don’t focus on the strategic execution, if we don’t focus on the ways that will ultimately get where we really want to go, chances are, we will lose focus, the goal won’t become a priority anymore, and then we won’t execute…
We won’t get it done.
We may not even be clear on what we need to get done because the strategic goals haven’t been articulated.
The Theory of Constraints
07:31 The next idea that I’ve personally found so helpful in working with my business clients (also working within my own enterprise) over the years, is this idea of the theory of constraints. The question that we’re left with when we think about strategic goals is,
Which strategy is best? There are so many ways to get to a particular result, which strategic goal is optimal?”
07:58 There’s always one answer for every specific situation, and the answer is whatever strategy fully resolves the primary constraint, the primary issue that holds the organization back the most from real progress.
We define a constraint as something that restrains, slows, or prevents optimum progress or a specific level of result.
There is always one primary constraint on any system that holds it back from the next level of progress or results.
08:30 So if you look at this pipeline, you can think of it as a way to transmit some kind of air, water or something through the pipe to get the most product out from left to right.
Let’s use this as an example…
Solve for the constraint.
Let’s identify the primary constraint and actually resolve it. That’s the job here.
08:56 If you look closely, you should be able to figure out, “Number one is a minor constraint. Number three is more of a constraint. It’s definitely more than number one.
But number two, that one really stands out.
It’s the number one bottleneck.
It holds the most product or whatever this “thing” is back from getting through.
You could resolve number three and number one, but you’d still have the same mediocre results. Chances are you’d have no progress even though you’re solving other issues.
09:32 So how do you do this? How do you find the primary constraint in your business?
You want to identify the primary goal first.
Do you want more profit, or revenue, or customers, or widgets?
List all the constraints on that goal, and test for each constraint.
Whichever constraint most impacts or constrains the progress towards the goal (or constrains the goal) is the primary constraint.
If this constraint was fully resolved, to what degree would that positively impact the goal?
That’s the question that you want to ask. So if you had three constraints and you ask that question,
If this constraint was fully resolved, to what degree would that positively impact the goal?”
And if you said,
That would impact it as Level 5 and the other one would impact it in a positive way at a Level 10,”
You know which constraint is the primary constraint.
Does that makes sense?
10:21 We only have so much time to discuss this concept.
We’ve just scratched the surface of the theory of constraints, and if you’d like to learn more about it, I would suggest that you go right to the source, which is this book called, “The Goal,” by Eliyahu Goldratt:
It’s a fantastic book that will give you an in-depth understanding of the theory of constraints.
This has been groundbreaking for my clients and my business personally. Once I really got my hands around this, it helped me to direct my focus to things that would truly grow my business rather than the ten other things that were really good ideas, but really weren’t the greatest in terms of sourcing the next level of growth for my organization.
How to PRIORITIZE
11:07 Now we’ve covered some basic concepts that you can take advantage of and utilize in order to think through how you might prioritize. Now, let’s just get to the actual step-by-step of it, how do you do this?
In this process, you’ll identify three priority levels.
Level 1 is the top priority.
You get this done this year or you die. These are what we tend to call BHAGs (Big Harry Audacious Goals).
Level 2: This is something that really needs to get done this year.
These are “shoulds”. Think of this level like, “Hey, this should get done.”
Level 3: It would be nice, but there’s no way that gets done this year.
Level 3 is more of a fantasy, and you’d be surprised how many fantasies are really good ideas, really smart, or really exciting…
It’s important to understand that even those, no matter how exciting they are, if they’re Level 3, they’re fantasies. There’s no way that gets done this year, if we’re being smart about the priorities.
12:08 So how do you mark these three priority levels?
Get your capture list out that we created in Step 1.
Level 1, The BHAGs, you just circle them. It makes it really obvious what the top priority goals are, and you’re only going to have a few of these.
…Don’t go circling half your list.
12:26 Level 2, These are the shoulds, and I would highlight all the shoulds.
Whenever I have a giant capture list of (like 40 to 90 items), I’ll go through it and I’ll just highlight everything that I know that should get done, “that should get done, that should get done”, etc., Highlight anything you think really stands out, is not just attractive, but very, very important, like something that really needs to get done this year. If it really should get done, highlight it.
12:49 Then finally, Level 3, the fantasies, just cross those out.
You don’t want to erase them. You don’t want to scratch them out completely.
Just strike them through.
You can always come back and rewrite them so you don’t forget what those are, because sometimes we make mistakes.
Sometimes the things that we thought were fantasies are actually Level 1 goals, so just strike through them and you’ve got a record of what those fantasies actually were.
13:16 So let’s actually go through a step-by-step process that I would take if I was working with an organization to create their priorities.
Step 1, Cover the obvious.
We’re just going to highlight anything on your capture list that should get done this year, and you can include the obvious BHAGs, the obvious do or die. I would just highlight everything that absolutely must get done or really should get done… the high priorities… and you may end up highlighting 50% of your goals.
13:43 Also, cross out any obvious fantasies in Step 1. If you’re thinking,
That’s not going to happen this year,”
…just go ahead and scratch it out immediately.
That’s Step 1, just cover the obvious stuff.
Step 2, Resolve the remaining items.
Now you’re going to review all remaining items and resolve them. Look at each and every item that remains that hasn’t been scratched out or highlighted, and ask,
Is this item a fantasy or is it something that really needs to get done this year?”
Decide between fantasy and “needs to get done” and mark it accordingly, just scratch out the rest, and highlight whatever is left.
14:22 Step 3, we’re going to identify any BHAGs.
Now it’s time to identify any BHAGs (any Level 1 goals) and review all the highlighted items because everything that’s highlighted was either a “do or die goal” or was a “should”. Just circle anything that’s obviously a “do or die goal”.
Finally, Step 4, you’re going to resolve any remaining BHAGs.
Review the remaining highlighted items. Is there anything else that should be considered a “do or die goal”? Really think about it and then mark them accordingly.
14:54 So now you know the steps in this process. Hopefully, that’s pretty simple.
What to PRIORITIZE
Let’s talk about what to prioritize.
There are different mindsets that you might have around your priorities this year or in your current state of business.
Prioritize to SURVIVE
So let’s start with the lowest level. This is if you’re just trying to survive.
There’s a different way to prioritize if you’re literally just trying to keep the doors open…
Trying to keep the business going
Trying to keep enough money in the bank so that you can continue to keep the business alive.
…and that’s survival prioritization. So keeping the organization alive is required, of course, for anything else to be possible.
15:32 If you’re not going to survive until next year, then everything else (all the other priorities that seemed like such cool ideas) is probably not going to be that helpful. In that case, really consider:
- cash and debts
- keeping people satisfied
- team members or partners
- maintaining key resources
If the organization gets to the point where suddenly a key resource can’t be taken advantage of (or can’t be used anymore), then it’s essentially lost. In that case, is the organization even going to be around much longer? Think about
- human resources
- vendor resources
- other tangible or intangible resources that are key
16:14 Prioritize to GROW
If you’re surviving (let’s say things were okay)… Maybe you’re not growing like crazy, but you’re not going to die tomorrow (or anytime in the next 12 months).
Then, you might want to prioritize to GROW this organization.
In that case, progress for your organization depends on many things above and beyond survival priorities.
To go beyond treading water, consider:
- growth and sales
- revenue or cash flow
- customer growth
- growth in profit and margins
- growth in brand or customer awareness
- growth in systems and efficiencies
- growth in organizational structure, culture and team
- growth in the company mission, vision and values
- any primary constraints in each of these areas
Prioritize to THRIVE
17:07 Finally, let’s say you are growing like crazy right now and things are really going well. We might want to prioritize to THRIVE, to really perfect things, to optimize.
There’s always another level beyond your current results, so really think about what’s not perfect yet.
- What could be even better than your organization’s current results and performance?
- What long-term visions aren’t yet gaining traction or getting significant focus?
- Consider any constraints on these areas as well.
17:38 The reason I included this discussion is that I wanted you to thinking about the current state of the organization.
Is it survival?
Is it growth?
Or is it thriving and perfecting?
What’s YOUR state?
Why should we care about your current personal prioritization state?
Because you may be in a state of mind of survival, even though your organization is growing.
That could be a real mismatch in terms of how you think about planning for the business versus what planning and what prioritization the business really needs from you.
Depending on your mindset, and depending on the state of the organization, things could radically change in terms of how you prioritize all the different things that have been captured during Step 1.
18:20 Any great business leader with a vision, and enough smarts to think about these areas, will take enough time to work with their team to make sure that everyone is on the same page in terms of the critical priorities… the critical things that must be executed on in the short and long term in order to produce the vision, and ultimately deliver on the mission of the organization as well.
18:43 That’s the prioritization step.
I hope that you learned a lot about prioritizing what you’ve captured in your first step of the strategic planning process, and if you have any questions about the Prioritization step, Step 2 of the 3-step strategic planning for organizations, feel free to pop them into the chat.
I’d love to hear your feedback, so make sure you leave a comment with your thoughts or questions.
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Jeffrey T. Sooey
CEO, JTS Advisors
Founder, Coaches Training Blog community