Managing by Priority

A little more than ten years ago, when I began to actively study business process redesign, I came across a book titled Managing by Priority: Thinking Strategically, Acting Effectively. The book’s author, Giorgio Merli, introduced me to a concept called time “horizons” and its role in decision making.

There are a number of ways to understand this concept. On a personnel level, think of it in terms of a typical departmental organization. A customer facing employee (sales reps, customer support staff) operate in an immediate time horizon. There job is to address whatever issue the client or prospect puts in front of them. A departmental manager typically has a longer time horizon. Their thoughts are more focused on a year or two down the road. A general corporate manger is focused typically on a three to five year plan.

From an initiative perspective, to be successful, a company has to effectively pursue objectives with three different time horizons (short, medium, and long) and at the same time manage emergency situations. If they are effective at doing so, the results of their efforts will be seen at different times.

Emergencies are typically problems to be solved or opportunities to be capitalized upon. A work stoppage or the ability to deliver a product or service caused by a “trigger” in the environment is a common example. Success rests on quick reaction times, improvisation and rapid deployment.

Short-term objectives are usually aimed at operational performance. Examples include issues related to quality, cost, processes, and financial results. Corporate leadership will typically frame these as annual objectives.

Medium-term objectives are those that concentrate on assuring that the business will still be competitive two to three years down the road. Leaders would focus on organizational capabilities after assessing where they think the competition will put the company at risk and market trends. Think new product development, retooling and significant technology improvements at this level.

The long-term objectives are more closely aligned with a five to ten year horizon. This point of view looks at where the company must be in terms of its organizational and cultural shape. It is for this reason that the word “vision” is commonly associated with long-term thinking.

If you look for it, you’ll find this pattern of time horizons appearing a lot and in places such as business process redesign, portfolio analysis and – you guessed it – strategy.

Does your mix of initiatives address all of these time horizons? More important, is your leadership team evaluating all of these time horizons when building your strategic plan?

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