Executive consensus is the starting point for identifying and selecting initiatives, and is formed when your organization’s strategic business objectives (SBOs) have been identified.
The prioritization of the strategic objectives enable focused action throughout the organization.
The objective is to achieve agreement upon the prioritization of key strategic objectives, by taking into consideration each parties’ interests, needs, agendas and reaching a collaborative action plan.
The issue many executive suites have is that individuals within the group have different priorities according to their function.
For example, an organization has the following SBOs:
- increase market share in existing markets;
- expand into new markets and segments;
- improve product quality;
- standardize and streamline cross-functional processes;
- reduce expense base;
- improve customer satisfaction score; improve employee satisfaction.
An executive in Human Resources may prioritize ‘improving employee satisfaction’, and judge ‘reducing the expense base’ as having a relatively low priority. A Chief Operating Officer may rate reducing business expense as the most important priority. This presents potential discord within the organization, limiting the potential for accurate allocation of resources. Initiatives fail to be maximized since their strategic impact cannot accurately be assessed.
Once an initiative’s strategic impact has been identified there are tools that can be used to compare the parameters defined above against this strategic impact. Parameters may include: risk; complexity; cost; business value; resource utilization; EPS or EBITDA shareholder value return.
Without executive consensus, the rest of the organization cannot make an informed decision on which are the most important projects.
The inability to accurately evaluate the strategic impact of initiatives will be felt throughout the organization and highlighted on the bottom line.