Rotman Management — Spring 2017

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often capacity, and not strategy, determines the launch

of projects. If people are available, the project is

launched. If not, it is dismissed. By using the answers

to the first two points of the hierarchy of purpose, ex-

ecutives can identify which are the strategic initiatives

and projects that align best with their purpose and

priorities. It also helps to identify projects that should

be scrapped. My advice: Although some theorists sug-

gest developing formulas that automate the process of

prioritizing and selecting ideas, my recommendation

is not to use such a systematic approach. The ultimate

decision has to be made by senior management, based

on human judgment and intelligence.

4.PEOPLE: Large organizations are made up of individu-
als with their own strong sense of ‘what matters’. In
most cases, these are by their nature self-serving, in-
formed as much by personal ambition and aspiration,
as by any sense of alignment with the organization’s
strategy. Yet, as shown in the example with Sam, em-
ployees are the ones performing the day-to-day busi-
ness activities and delivering on projects. As a result,
they have to make many minor decisions and trade-
offs every day. Creating clarity around your priorities
will ensure that every employee works in the same di-
rection. My advice: It is important to allocate the best
resources to the most strategic projects and to 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 proac-
tive sponsor.

5.PERFORMANCE: Project metrics tend to measure inputs
(scope, cost, time) instead of outputs. Inputs are much
easier to track than outputs (such as benefits, impact
and goals). Identify indicators linked to your orga-
nization’s priorities, and to the outcomes expected
from the selected projects. My advice: Less is more
in this case: One or two for each area will do the job.
It is better if people can remember at all times how
performance will be measured. Finally, management
should have the right information to quickly react
to market changes and to supervise the pipeline of
new priorities.

In closing

Think of your organization’s purpose and priorities. Are all

of your employees working according to those priorities?

Are their activities prioritized to align with the best interests

of the organization as a whole? How would your priorities

change in case of a sudden economic downturn?

One of the main hidden benefits I see whenever I carry

out the first round of prioritization with top management is

that the discussion turns into a very interesting strategic dia-

logue. For example, the CEO might ask the director of sales,

‘How are we going to meet that international growth target

if currently, we only invest in existing markets? Is this sus-

tainable in the long term? What would be the consequences

of balancing our portfolio and investing more in growth and

cost optimization, and less in compliance?’

Among the organizations I have worked with—and

others such as Apple, Amazon, Lego, IKEA and Western

Union, all of which have a highly-developed sense of priori-

ties—the payoffs of a hierarchical approach to priorities are

clear: they can result in significant cost reductions, as prior-

ity activities that fail to deliver against clearly-articulated

measures will be stopped; there is potential to reduce dupli-

cation, consolidate activities and decrease budget overruns;

and there is increased alignment and focus around strategic

priorities. Most importantly, the firm as a whole will shift to

an execution mindset and culture.

Antonio Nieto-Rodriguez is Director of the Program Management

Office at GlaxoSmithKline Vaccines and Chairman of the Project

Management Institute. He is author of The Focused Organization: How

Concentrating on a Few Key Initiatives Can Dramatically Improve Strategy

Execution (Routledge, 2012) and is a visiting professor at Duke Univer-

sity’s and Spain’s Instituto de Empresa, among others. He was recently

nominated as Thinker of the Month by the prestigious Thinkers50.com.

For more: antonionietorodriguez.com.

Amazon’s purpose, ‘to be earth’s most customer-centric

company’ is clear, compelling and eliminates any ambiguity.