Three years ago, I wrote an article advocating that companies prepare to disrupt their own business model. Inspired by notable speaker and author Professor Robert Wolcott of Kellogg, who had spoken at a conference I had just attended, the article challenged business leaders to consider the following question:
“What will happen to my business when people stop buying (whatever it is we are selling)?”
At the time, Dr. Wolcott underscored that having an open mind would help business leaders consider how they can pivot to stay relevant, even as their current offerings phase out.
Right now, with the COVID-19 pandemic closing many businesses, having an open mind is not only a benefit to pivoting to meet the needs of a changed economy, it is imperative. Companies that try to continue doing “business as usual” may find that they have no business to return to.
For the sake of argument, let’s say that we all agree that pivoting in some way, shape, or form is not optional. Okay, let’s do it. But wait – what exactly are we going to do? We have limited resources – possibly now more than ever – in time, money, and skillsets. Prioritization is definitely a must.
There are two ways that AJC helps companies prioritize. The first is a 2-factor “Impact/Ease” method that is often used and easy to follow. It is great for filtering down a laundry list of possible quick wins in order to determine what items will have the greatest impact and be relatively “easy” to complete. Teams can draw up a simple 2×2 matrix and plot their ideas on it as shown below to give a basic comparison and align on low hanging fruit. Ideas that fall in the “High/High” quadrant are the ones that should be done first:
The second is 3-factor criteria-based method that we adapted from the engineering tool “Failure Mode Effect Analysis,” or FMEA. This method is more structured, offers more objectivity, and can be tailored to meet different needs. We call it the AJC Prioritization Planning Tool, and have added an additional dimension for regulated industries to make it even more robust for situations where regulatory considerations must be prioritized to stay in business. This Prioritization tool is recommended for times like this – when a full pivot is needed to stay relevant, and Quick Win “low hanging fruit” changes may not be sufficient to achieve the kind of disruption which a post COVID world is going to require.
Below is a blank template of the AJC Prioritization Tool. It is reasonably self-explanatory, though we will walk through our recommended approach for completing it.
First, consider who should be involved in this exercise. Are you a leader who has great ideas and leads a small business to the point where doing this on your own may be the most effective way to get started? Or do you have a Leadership or Executive Team who should be a part of the process? Regardless of how you do it, figuring out who is going to be a part – even if that shifts over time – will ensure that your key stakeholders are aligned.
Second, give everyone a little “pre-work.” Ask them to think about ideas they have for your business to pivot ahead of the session in which you work together. If it is just you doing this, you can also jot down ideas on your own. Limit the duration of this, especially if you are working with a team, to a week or two at the most – the group will likely come up with additional ideas when they get together, and you don’t want to get stuck just because it is hard to get started. If that is the case, skip this step, and ideate as a group.
When you get together, the team working on the ideating should come up with three distinct criteria against which every idea will be evaluated. Do you want to earn more revenue? How important is net margin? Does this have to fit with your existing products and services in a way that “makes sense?” Do you have an existing customer base that you could tap into with a completely different offering that may increase your likelihood of quick sales? Is your internal culture so strong that you want to be sure that whatever you do preserves the integrity of your employee relationships? Consider and update the tool if any of the criteria should be weighted differently than the others. Perhaps your read of the tea leaves suggests that if you don’t generate immediate cash flow, you won’t have a business to come back to, and that requires a double weighting compared to your other criteria.
Once you have come up with your criteria, it is highly advisable to give objectivity to the scores of 5 = Best, 3 = Medium, and 1 = Worst. For example, if Net Margin is one of your criteria, perhaps a score of 5 would be 15 – 20% net margin, 3 would be 5- 14%, and 1 would be <5%. Some companies will allow gradient scores of 2 or 4 for the “gray” areas, and that works too.
After that, list out your ideas in the template. You could pre-populate, do it together, or a combination where you add the ideas people came up with on their own, then riff off each other a bit to add new ideas as you work together.
Next, score each idea against the criteria that you have jointly developed. This should not take too long, and if team members disagree even after some limited debate, you can always average or take the value that most people agree on. If you are in a regulated industry, use the last column for the binomial determination if the idea is required for regulatory reasons (1 if yes, 0 if no).
The tool then helps you with the next few steps. It will automatically multiply the weighted Prioritization Number for each idea, which will be the product of each weighted score. For example, if the weights are all 1, then the highest score obtainable is 125 (5*5*5). The lowest would be 1 (1*1*1). Now you can sort your ideas by Prioritization Number, as well as by the binomial “Regulatory” 1 or 0, and use those scores to determine where to allocate your precious resources in order to pivot successfully in this uncertain time.
Congratulations! You have just turned the inherently subjective task of brainstorming into a thoughtful objectively prioritized plan, and hopefully everyone on your team is aligned to what now needs to be done.