From overload to order: Mastering prioritization for business success

Initiative overload in business is more prevalent than you think.

Michael Porter famously said, "The essence of strategy is choosing what not to do." While that sounds simple, in practice and in my experience, it's often a challenge for business leaders to let go of existing projects—even when they no longer add value or align with new strategies or the company's future goals. Instead, leaders tend to keep adding initiatives, which can lead to tangled mess of overload for everyone below the executive team.

In another well-known Harvard Business Review article, published in 2018 by strategy gurus Michael Watkins and Rose Hollister, they highlighted how many organizations struggle to manage initiatives effectively. Senior leaders are often unaware of how much they're piling on or are reluctant to let go of their favourite projects. As a result, managers and their teams are left to absorb the labyrinth of extra work, often at a cost to productivity and morale.

An excellent example of this prevalent prioritization challenge is Yahoo, Inc. In the early 2000s, the company expanded into multifarious industries—search, email, e-commerce—but this lack of focus hurt its performance. In the end, Yahoo couldn't correct course, leading to its acquisition by Verizon in 2016.

In my own strategy experience, I've seen firsthand the impact of not cutting underperforming projects or setting clear priorities. When leaders fail to make these tough calls, teams become overwhelmed, and the effects on productivity, engagement, performance, and retention can be damaging, with long-term impacts. It's important to remember that organizations only have so much to give. Furthermore, according to Brainz Magazine, transformation-specific efforts to drive significant change often fail because too many initiatives stretch resources too thin.

What is initiative prioritization, and why is it so essential?

So, the challenge is clear. Initiatives—whether they're projects, programs, or critical priorities—can quickly pile up and overwhelm an organization, causing it to lose sight of what truly drives value. Of course, the best approach is to prevent overload in the first place. Easier said than done, right? To avoid this, companies need to carefully prioritize. This means defining critical criteria, like cost, complexity, and potential financial impact, and evaluating each initiative against those benchmarks. Only the most urgent and valuable initiatives should make it onto the roadmap for execution, while the rest get left behind. In this sense, it's a two-sided coin, and what a company "chooses not to do" can be just as crucial as what it does.

It sounds simple, but it requires rigorous prioritization and discipline in launching new initiatives and tracking the time and resources they consume. It also requires courageous leadership to stay the course and simplify the focus. For companies already bogged down, the focus should shift to the benefits of scaling back. As Steve Jobs once said, organizations are at a great advantage when they learn to say no to the "hundred other good ideas that there are." They can then use their creative juices and productive energy more wisely, foster outstanding employee commitment and loyalty, and master more in the areas that drive the highest return on investment.

The vital ingredients to untangling the prioritization challenge.

Initiatives usually come from two sources. External analysis or internal insights, both aimed at uncovering opportunities or ways to improve business performance. These strategic initiatives can be prioritized using various frameworks, depending on a company's unique needs and resources. However, no matter the method, a critical first step is to gather everything in one place—mapping out all initiatives across the organization to get a full view of the landscape.

Once you have a handle on what's in play, typically, prioritization then looks at these initiatives through two key lenses: value (the financial and non-financial benefits to the business) and ease (how much effort and resources the initiative will require and how complex it is to execute). While this is a practical approach, the "ease" factor can sometimes be subjective, leading to bias. As a result, teams may underestimate the risks of projects that seem appealing or overlook opportunities that, at first glance, don't seem as promising.

From there, as I describe in my book, Outside In, Inside Out businesses need a system to rank them. A simple but effective approach I often use in workshops is a prioritization grid. It measures initiatives based on effort (such as time, resources, and complexity) and benefit (financial or otherwise). This tool is excellent at helping leaders focus, especially when every initiative somehow becomes a "top priority." It forces tough but necessary decisions about what really matters when it comes of focus and alignment. Slight nuances on this approach to consider include the following:

• Value-based prioritization: This method chooses initiatives that deliver the highest value to the organization or return on investment. Whether boosting revenue, improving profitability, saving costs, increasing customer satisfaction, enhancing ESG impact, or driving employee retention, the goal is to prioritize what moves the needle most regarding business performance. Companies can analyze financial data, customer feedback, market research, or employee surveys to understand each initiative's potential impact. Johnson & Johnson effectively utilized value-based prioritization to guide its strategic initiatives, including the rapid development of its COVID-19 vaccine in 2021. Initiatives including single-dose vaccine development, global accessibility through partnerships, and expanding manufacturing capacity all ensured maximum impact and value during the pandemic.

• Risk-based prioritization: Here, the focus is on tackling the initiatives that address the biggest threats to the organization—whether it's competition, regulatory changes, tech disruptions, environmental concerns, or damage to the company's brand and reputation. This approach often involves risk assessments, scenario planning, and stakeholder analysis to weigh each risk's likelihood and potential impact, allowing companies to focus on what's most critical to their survival in support of risk mitigation. A notable example of risk-based prioritization of strategic investment initiatives is at TD Bank. They have a comprehensive enterprise risk management framework that helps prioritize initiatives based on risk and strategic importance. Not at all surprising from a bank.

• Resource-based prioritization: This approach zooms in on the initiatives that best align with the organization's available resources and capacity—budget, people, technology, and assets. It's about being realistic about what I can do given organizational constraints. Companies can determine which projects are feasible and scalable within their current resource limits by analyzing capacity, skill sets, and infrastructure. A great example of a company that effectively uses resource-based prioritization for strategic initiatives is Toyota. Toyota's production system is renowned for its efficiency, primarily due to its detailed approach to prioritizing resources and eliminating waste. This system, often called "lean manufacturing," ensures that every resource is allocated to projects that maximize value.

• Time-based prioritization: In this case, timing is everything. The goal is to align initiatives with short-, medium-, and long-term objectives—or, as I like to say, focus on the "now," "next," and "beyond." This approach involves looking at strategic plans, market trends, business continuity, and customer needs to decide which initiatives are urgent and which can wait, ensuring that the business stays on track. A company that excels in time-based prioritization is Apple Inc. Apple is known for its rigorous product development timelines and launch schedules. The company prioritizes projects based on strict deadlines to ensure timely product releases, which is crucial in the fast-paced tech industry.

• Stakeholder-based prioritization: This strategy revolves around understanding the needs and expectations of key stakeholders—customers, employees, investors, or partners. It involves gathering insights through surveys, focus groups, or interviews to identify which initiatives have the most robust stakeholder support and are most likely to drive engagement and buy-in. It's a more customer-centric approach. Starbucks places a strong emphasis on its employees, considering them key stakeholders. Strategic initiatives at the coffee giant are prioritized based on stakeholder needs, including working conditions, job security, and higher employee wages.

Ultimately, the best way to prioritize strategic initiatives and free up valuable capacity depends on each organization's unique situation, goals, and resources. A blend of different strategy execution approaches, customized to fit the company's needs, often works best to drive order.

Strategic prioritization helps organizations focus on what truly matters.

In my experience, prioritizing strategic initiatives is crucial for organizations to master success. It helps them zero in on what truly matters and liberates resources by cutting low-priority projects. Done right, prioritization strengthens strategic conversations at the leadership level, ensuring alignment on crucial initiatives cascading throughout the organization. Once leadership embraces this mindset, priorities become ingrained in the company's culture.

Prioritization is also a powerful tool for efficiently allocating resources. By focusing on high-impact initiatives, companies can invest their time, money, and talent where they will deliver the best return—always in line with the strategic plan.

As I describe in my book a disciplined approach to prioritization sharpens focus and shows a company's commitment to achieving its goals. It communicates strategic objectives clearly to both internal teams and external stakeholders. It also keeps the organization agile, allowing it to stay responsive to shifting market conditions, customer needs, and other external changes. With regular reviews and a flexible approach to prioritizing, companies can adapt quickly, turn overload to order, and stay ahead of the curve.

By Dr. Lance Mortlock – Author of Outside In, Inside Out – Unleashing the Power of Business Strategy in Times of Market Uncertainty, EY Canada Managing Partner Industrials & Energy, Strategist & Adjunct Associate Professor