How many business improvement initiatives can a company manage at any one time?

Operating a business in these challenging times is certainly not easy. In the last two posts, I introduced a number of strategies that make sense during an economic downturn. One of these strategies can best be classified as a sales strategy – that is, how to reignite opportunities that one would otherwise expect to stagnate when the economy is in difficult straits and businesses are adhering strongly to the philosophy of hoarding cash because “cash is king.”

The other strategy looked to the internal workings of a company and focused on how a company might best use underutilized resources that are suddenly available because sales are lagging. In this context, we discussed the development of best practices and the optimization of internal processes.

It is on this internal opportunity that I would like to discuss in today’s post.

The internal business process redesign discussion begs the question as to how many initiatives can a company manage at any given time. Is there an optimal number and if there isn’t, how does one determine how many initiatives are manageable so that business opportunities and the needs of clients continue to be addressed?

In all of my research and studies, I have yet to come across a discussion that addresses this particular question. To address this question, I will rely on my thirty years of experience as a CEO and consultant and share with you what I have learned from my experiences as a strategist.

To perform this analysis, one must:

  • Understand your company’s strategic goals
  • Define what tactics are required to support these strategic goals
  • Establish what each department must do to achieve the strategic goals
  • Determine the time and effort required by departmental staff to support the achievement of the core goals that essentially enable the company to deliver value and stay in business

What remains after performing this analysis is the amount of time available for personnel to address new improvement initiatives.

In other words, this analysis is predicated on assessing the company’s priorities and the core roles that must be fulfilled. After all, customer support personnel must perform their support function or the company risks client defections. Sales and relationship professionals must be engaging prospects and customers to assure growth. Accounting and internal support staff must make certain that the infrastructure exists so that the organization can run efficiently. These are the prime functions of these departments.

So is there an optimal amount or maximum number of initiatives a company can manage? As best as I can tell, the number of enterprise-wide initiatives that a company can swallow is typically between one and three. (Note added 11/09/08: Interestingly, several weeks after this post was written, the Obama Transition Team was enagged in a similar conversation and may have reached a similar conclusion.)

The reason that I believe this to be so is that I have concluded that most people have a difficulty managing more than five significant goals or projects simultaneously at any given time. And if one considers that the average person has two or three core functions for which he or she is accountable, this only leaves so much space for professional and organizational development without impacting the core responsibilities that each of us have.

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