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Strategy Matters: How To Develop Criteria For Achieving Business Goals

When the economic picture shifts, so does the criteria for success. Here's how to achieve your business goals under a new or revised strategy.

Nilofer Merchant

When the economic picture shifts so does the criteria for success. How do you know you're winning? How do you change goals when the competitive ground is different, yet still keep the team aligned? Criteria development is crucial to the establishment of new or revised strategy.

If your business offers a competitive product or service and has customers who are able and willing to pay, your next step should be focusing on stability. That means making and saving money, eliminating waste, hiring and retaining the right talent, and achieving your company goals.

But saying stability is far easier than achieving it. Reaching the elusive state requires developing strategic goals and that means developing criteria to inform those goals.

Criteria Development

The goal of criteria development, is to learn what matters to your team and organization so you can choose from various strategy possibilities. Here are some of the questions you'll need to answer:

  • Where do we want to be?
  • How will we know when we're winning?
  • What will success look like?

Criteria development specifies which particular vision of success will drive your ongoing choices. Organizations often use directional phrases like "getting traction" and "achieving momentum" as substitutes for articulated goals. Such phrases are not specific enough to allow alignment within the team or the organization. The more specific the goal is in people's hearts and minds, the better they will make decisions that support the vision.

Not all success factors are equally important. Be sure to explicitly identify which particular success factors are crucial early in the criteria development process.

Criteria development is essential because there will be many choices made during the strategy creation process. It's vital to know why A is selected over B. Publically developing criteria is important because it helps people state what is important to them as a team, a division and as an organization -- it helps them internalize why the strategy is important. Having clear criteria up-front keeps the strategy creation process focused on what is good for the business. It allows the team to work from a shared vision as they approach the goal.

The following table includes several sample criteria:

Criterion Explanation
Size/Revenue
It will be big enough to be a material focus for the division.
Timeframe It will match our needs in # of quarters/years to yield.
Portfolio It will match our portfolio of products / services / offers.
Region It will appear in regions where we are strong.
Certainty We will have the right data available to make a good decision.
Affinity We will need to follow what our team wants, and they really want to do this.
Defensive Move We will do it because we want to prevent others from doing it.
Sales Model We will already be set up to sell it.
Customer The account type will match buyers that we know how to reach.
Leverage It will use our core strengths (product, channel, know-how) best.
Service We will be able to perform to meet customer satisfaction expectations.
Profitability It will support add-on of items like professional services.

There are two key points to remember about criteria development.

First, keep in mind that the purpose of criteria development is to expose tacit assumptions about the project goal. It's about helping the team come to a common understanding about what matters. There may be disagreement about what success looks like. If so, discussions during criteria development will test people's assumptions about what really matters to the team and the organization. The discussions will also verify that the assumptions are current and valid.

Second, the act of making criteria explicit will help each team member know how to make decisions at any point in the process where they need to make a trade-off. People will be aware of the logic and beliefs underlying the strategy and will be able to articulate them.

Hallway Conversations

Criteria development isn't a heavy-duty exercise. Criteria meetings are short and to the point. If your team is used to working together of highly familiar with the issue you're trying to solve, you can poll people in the hallway and test to see if there is a natural consensus about the markers of success.

Ask participants to make criteria explicit so that a common language for what you are trying to do can be developed. With an aligned team, simply summarize what you've heard. Most important and not to be skipped -- present the results for the entire team to validate and ratify at your next meeting.

If your team isn't aligned, discuss criteria and what you are trying to accomplish at a meeting. "How will we know when we are done?" is a simple question that can be used to start the visioning process. Get people to think about what the end-solution should look like before they consider options.

Another question is "Imagine you're looking at a series of options that we could do and pointing and saying, 'That's the ONE!' What about that solution would make you sure?" This question helps people make their decision-making criteria conscious and helps them communicate explicitly what will drive the decision for them.

Asking what the criteria should be before you have any ideas to work with allows later decision-making processes to be cleaner and more neutral. Without any particular idea to focus on, you can fully consider what would be best for the business.

When criteria aren't made public and explicit early on, people tend to invest in ideas, then let the ideas drive the criteria selection later. This is a mistake. Focus on the criteria first and use them to drive the creation of additional ideas.

Exit this phase of criteria development with a clear picture of what success will look like. This means something that everyone agrees on and that can be described in concrete, simple language. When everyone on the team can describe it in a very similar way, you know you're there.

See more Strategy Matters columns by Nilofer Merchant

Nilofer Merchant, CEO of Rubicon Consulting, is a global high-tech industry thought leader and trusted strategic adviser for companies such as Adobe, Symantec, and VMware. She publishes and speaks frequently on strategy, innovation, and leadership.

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