A Broader Implementation Toolkit
Hierarchy of Purpose
Vision and mission have been very popular concepts, yet they tend to be made up of fancy words, often developed by consultants. The terms are often mixed up and their differences are not understood. Therefore, they are hardly ever used when strategic objectives are set, and as a result staff don’t know what really matters. Use purpose instead.
State the purpose of your organization and the strategic vision supporting this purpose. The purpose has to be sharp and clearly understood by anyone working for your organization. Amazon’s purpose – “to be earth’s most customer-centric company” – is compelling enough to avoid any ambiguity within the organization.
Another remarkable purpose was the one set by Sony’s co-founder Akio Morita, when Japan was seen as a cheap product-copycat country. He established that Sony’s purpose was to “make Japan known for the quality of its products,” Japan, not Sony. Their purpose aimed at a higher dimension than their own company—bold, yet extremely inspiring for their employees.
The number of priorities an organization declares is revealing.
If the risk appetite of the executive team is low, they will tend to name a large number of priorities; they won’t want to take the risk of not having the latest technology, missing a market opportunity and so forth. On the other hand, if the executives are risk takers, they tend to have a laser-like focus on a small number of priorities. They know what matters today and tomorrow.
Define the priorities that matter most to your organization now and in the future. Take the example of Amazon: its purpose clearly puts the customer in the center.
Everyone working at Amazon will know when they have to make decisions that the ones related to customers will always come first. Or like Emma Walmsley, CEO of pharma giant GlaxoSmithKline pharma giant, clearly states: “Everyone at GSK is focused on 3 priorities – Innovation, Performance, Trust”.
Strategic initiatives and projects, when successfully executed, bring the organization closer to its purpose and its strategic vision.
Nowadays, companies have a large number of projects running in parallel, mostly because it is easier to start projects than to finish them. Very often capacity, rather than strategy, determines the launch of projects. If people are available, the project is launched. If not, it is just dismissed.
But which projects should organizations really invest in and focus on? And who wants to risk missing a big opportunity? By using the Purpose and Priorities, senior executives are able to identify which are the best strategic initiatives and projects to invest in. This can also help to identify projects that should be stopped or scrapped.
Although theorists suggest developing formulas that automate the process of prioritizing and selecting ideas, my recommendation is not to use such a systematic approach. The exercise is mainly to provide management with different orientations and viewpoints, and ultimately the decision has to be made by management based on human intelligence.
Prioritizing at an organizational level is incredibly difficult. Large organizations are made up of individuals with their own strong sense of what matters.
Every individual in an organization has their own list of priorities. These are by their nature self-serving, informed as much by personal ambition and aspiration as by any sense of alignment with the organization’s strategy. Yet, as shown in the example of Samantha, employees are the ones who implement the company’s strategies. They perform the day-to-day business activities and deliver the projects. They also have to make many minor decisions and trade-offs every day.
Creating clarity around the priorities and the strategic projects of the organization will ensure that every employee pulls in the same direction. It is important to allocate the best resources to the most strategic projects and liberate them from day-to-day operational tasks: projects are delivered more successfully when they have a fully dedicated team and a strong, committed and proactive sponsor.
Traditionally, performance indicators don’t measure priorities and seldom indicate the progress made towards fulfilling a company’ strategy. Project metrics tend to be lagging indicators (performance in the past) and measure inputs (scope, cost and time) instead of outputs. Inputs are much easier to track than outputs (such as benefits, impact, sustainability and goals).
Identify indicators linked to the organization’s priorities and to the outcomes expected from the strategic projects. Less is more in this case, so one or two for each area will do the job.
When Satya Nadella took the role of CEO Microsoft in 2015, he announced a new corporate mission: to push productivity, everywhere, across all platforms and devices. Pursuing that mission meant changing the way the company measured success. In an interview in The Verge, he explained: “We no longer talk about the lagging indicators of success, right, which is revenue, profit. What are the leading indicators of success? Customer love.”
It is better if people can remember by heart how performance is measured. The ultimate goal is to have the few outcome performance indicators embedded in people’s minds.