How to successfully prioritize the needs of your business

Growth can be compromised by breakdowns in strategic thinking and failure to prioritize business objectives. How can businesses effectively overcome these challenges and achieve their ambitions?

Alisha Jernack, Partner at Mazars, advises senior management teams in family-owned and owner-operated businesses on growth and change strategies. Her experience spans a range of industries, including manufacturing, service-led companies and transport and logistics firms.

Alisha, in your experience, how do high-performing, medium-sized businesses best shape and define their objectives?

For many companies, they’re not clearly defined, instead focusing on day-to-day needs and putting out fires. Truly successful organizations work hard to understand where they are today – and where they want to be. That’s often the difference between staying mediocre and performing the same year over year – or being a high-performing company that delivers long term sustainability and shareholder returns for years to come.

What are the best practices for defining priorities?

It is always critical to start with an in-depth, diagnostic analysis conducted by an independent third party to gain an understanding of where the company is today, and where the shareholders want to be.

This is important because many businesses are family firms with a lot of granular involvement. A third party brings objectivity to the diagnostic and identifies where gaps exist.

The assessment should cover all of the core areas of the business, including finance and risk, management mindset, business operations, market, product, and customer analysis, as well as technological and organizational capabilities. Next, they should devise a strategy to bridge any, and all, gaps.

External data is a key component, providing robust insight for management teams on how they stack up against others in their sector. This can then be compared with historical performance data to gain an accurate understanding of the true potential of the business going forward.

There is also a lot of value in analyzing existing internal reporting such as financial forecasts and how frequently they are created and revisited. Any financial forecast going forward should be developed in parallel with strategic plans and serve as a means to measure success, monitor costs against priorities and adjust plans with a full understanding of the financial implications.

How do clashes between the personal objectives of business owners and wider business strategy most often occur – and how do you prioritize one over the other?

Clashes are common because medium-sized businesses are often family-run and passed down from generation to generation. Aligning business objectives and shareholder needs is imperative to success. Family members will often have different priorities, leading to differences of opinion on direction.

It’s about looking holistically at the business, understanding what’s important to each of the shareholders, and factoring this in during diagnostics, but before defining strategic scenarios. 

How, in your experience, do companies benefit most from prioritization?

By having a structured approach, you can build consensus. Without prioritization, we often find that management teams are overwhelmed, not knowing which direction to go first. This, in turn, can easily lead to corporate inertia. The list stays a list and sits in a drawer without being acted on; the business owners revert to what they’re used to.

Focus is also important. We recommend prioritizing no more than three to five breakthrough objectives at a time. This enables tasks and resources to be allocated effectively, enabling accountability and delivery.

What if priorities need to evolve?

The importance of carving out time every month as a team to review progress against objectives can’t be underestimated. Meetings need to be diarized formally, as you would board meetings. Monthly strategic reviews will enable you to monitor progress against KPIs – and allow you to be agile, adjust assumptions, reprioritize objectives and reset timelines and expectations where you need to. External involvement from a business specialist can bring objectivity, and in-depth sector experience, to this important part of the process.

Learn more about effective strategy and planning support for businesses at mazars.us.