The Australian Small Business Blog

Sunday, July 09, 2006

What is Most Important?

Recently, the US ambassador to the UN commented that the Secretary General had 9000 mandates. He then noted, when you have 9000 priorities, you have none.

This happens in business too. Owners do not prioritise their resources. None of us have infinite resources- not even the UN. We therefore must say, what are our key priorities? They are ones that are the most urgent. The ones that will create the most value or prevent large loss if implemented first. The ones that give you the biggest bang for your buck. Often called the low hanging fruit.

These priorities could be to increase sales or reduce costs so that you can be more competitive. They could also be externally driven- due to regulation or some external event which creates an opportunity for your business. Priorities are either operational, or strategic. Examples of operational priorities may be a deadline for a delivery or a tender, whereas examples of the strategic may be the creation of a new product range or the formation of an alliance. The key difference is that the former is business-as-usual and the later will result in a business transformation.

Firstly, create a list of all your current priorities. For each, determine a value (or loss of value) and a probability of occurrence. Then identify which of these have an external driver. For example- the deadline for your tax return or the closing date to participate in a Trade Show. Split the priorities between operational & strategic.

Some priorities may be long term. You should create a deadline for these as they will otherwise never be completed. An example may be to create a business management system. This is a goal whose value is difficult to quantify, but can increase productivity significantly. It is also a goal which might take some time to implement, particularly for a larger company. So the objective might be to have the systems fully operational over a 12 month period. You would also have milestone objectives each quarter, so that it is not all left to the last minute.

Once we know our priorities, we still need to balance the strategic against the day-to-day priorities of our business. The strategic priorities always seem to be the ones we leave to last, yet they are the ones will have the greatest impact. The squeaky wheel (operational priorities) always seems to get the oil. To prevent this, we must create time in our schedule that we use only for the strategic priorities.

Most business owners spend all their time fighting fires and working in their business rather than looking at ways to prevent fires from starting. While they are doing this, their business will never improve. Setting priorities means leaving some things for later. When you try doing everything at once, you achieve nothing. Ask Kofi Annan.

Dr Greg Chapman is the Director of Empower Business Solutions and is a Business Coach based in Melbourne Australia and provides advice on Marketing Strategy and Business Planning and Systems.

The Australian Small Business Blog

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