Office life: Three simple priorities

July 9th 2009

FROM THE ECONOMIST INTELLIGENCE UNIT

In this article written for Executive Briefing,, Stephen Lynch, Chief Operating
Officer at business coaching consultancy RESULTS.com, argues that leaders can
be more effective by focusing on less.

Many leaders have a distorted concept of “management by objectives” and think

that because they have set financial and operational targets for the year and
quarter, their leadership duties and responsibilities are complete. Nothing could be
further from the truth.

Instead, as General Electric CEO Jeff Immelt believes, “Every leader should be
able to clearly explain and repeat the top three things the organization is working
on. If they can‟t, then they are not leading well.”

This applies to leaders at every level of an organization. Every leader should be

able to articulate the top three action priorities their team is working on this
quarter – aligned to overall company strategy. It is even better when this concept
can be taken to a higher level of granularity, and every key individual has their
own personal top three action priorities for the quarter. If you can combine this
level of focus with a culture of accountability, your organization will become truly
effective at executing strategy.

Achieving this level of focused simplicity requires a discipline we only see in the
most effective companies. Not only do they set objectives, effective leaders clarify
and engage their people to execute the specific action priorities (inputs) that will
lead to the achievement of the desired objectives (outputs).

Clarifying your top three action priorities drives organization alignment.

Organizations lacking this level of specificity, and with only vague mandates and
financial targets from leaders, can easily become unfocussed, distracted and
bloated. Many companies (and leaders) still try to do too much, and try to be all
things to all people.

Management thought leader Peter Drucker emphasized the need to “concentrate

on the few things that will produce the greatest results.”
Your "don't do" list

To keep a company focused, Drucker wrote of a concept he called “purposeful

abandonment.” This entails figuring out what activities to stop doing. You or your
company may have invested time and resources into an activity in the past, but if
it no longer is a good strategic fit for the future, you must abandon it.

According to Drucker, “The first step in a growth policy is not to decide where
and how to grow; it is to decide what to abandon. In order to grow, a business
must have a systematic policy to get rid of the outgrown, the obsolete, and the
unproductive.”

Drucker lived what he taught. It is said that after he wrote a book, he never read it
again. He abandoned it. When he had a new idea, he wrote a new book.

When do you stop investing time and resources into activities that have achieved
their purpose? When do you decide to pull the plug on those activities that never
seem to quite achieve their original promise?

Drucker‟s “purposeful abandonment” is very similar to Jim Collins‟ “stop doing

list” concept. In the book Good to Great, Collins advised business leaders to “take
a look at your desk. If you're like most hard-charging leaders, you've got a well-
articulated to-do list. Now take another look. Where's your stop-doing list? Those
who built the good-to-great companies made as much use of „stop-doing‟ lists as
„to-do‟ lists.”

Like most success disciplines, this concept sounds deceptively simple, but it is not
easy.

Studies in psychology show that people tend to fear loss more than they desire
gain, and will strongly resist having things taken away from them that they
perceive an attachment to.

Leaders resist abandonment because it runs counter to what they have been judged
on throughout their careers – which is to grow revenues and profits. How many
executive‟s resumes brag about projects they pulled the plug on? They are
conditioned to want to fix and grow things. Unless something has been an outright
failure, it can be difficult to convince leaders that activities they are involved in
should be abandoned. Vested interests and egos tend to perpetuate the status quo.

The ability to have a long-term strategic viewpoint defines true senior leadership
potential. Effective leadership calls for continual pruning and weeding.
Abandoning activities is not as sexy as acquiring them or building them up, but
it‟s just as important – and often the most overlooked aspect of leadership.

This is particularly true in firms where there is relentless pressure to get bigger
and bigger. Drucker argued that such organizations "confuse fat with muscle" and
equate "busy-ness with economic accomplishment."
Yesterday's star product may produce profits now, but it soon becomes a barrier to
the introduction and success of tomorrow's breadwinner, Drucker asserted. “One
should, therefore, abandon yesterday's breadwinner before one really wants to, let
alone before one has to. Of course innovation is risky. But defending yesterday –
that is, not innovating – is far more risky than making tomorrow."

Drucker suggested setting aside one day per month for “abandonment meetings.”
At such meetings, a business activity is reviewed, with the object of deciding to:
(a) stay the course, (b) keep pursuing the activity but change tactics, or (c)
abandon the activity altogether.

Consider the following:

 Which of your activities are failing to deliver the desired results?

 All strategies have a finite lifespan. Have changes in the environment
made your strategic assumptions obsolete, and do you need to abandon
a chosen strategy?
 Are you investing in tomorrow‟s opportunities, or milking yesterday‟s
cash cow dry?
 What people in your organization are failing to make worthwhile
contributions?

Chances are there are elements in your organization right now that you need to
consider for pruning or abandonment:

 Strategies
 Product or service offerings
 Customer segments
 Geographic locations
 Offices & manufacturing facilities
 Technology
 Reports
 People

To paraphrase Drucker: “If it no longer advances the strategic goal of the

organization, it is a distraction, and must be abandoned.”

Smart leaders focus their organizations by practicing purposeful abandonment.

They continually prune to keep the plant healthy by ignoring and eliminating
those activities and investments that no longer a good strategic fit.

Smart leaders achieve simplicity by clearly articulating their top three action
priorities for the quarter, and then relentlessly focus on implementation of these
three priorities.

Source: The Economist Intelligence Unit