Successfully steering companies through uncertain economic and geopolitical climates requires clarity on strategy, along with disciplined implementation. With endless items competing for attention, it’s critical that boards focus on top priorities and limit distractions.
Define core business priorities, and devote agenda time accordingly. How many meetings end up far less effective than they could have been because a minor issue takes up a disproportionate amount of discussion time, cutting short critical dialogue on major issues? If the core strategic issues are clear, along with why they are priorities — such as those driving company profit and loss, long-term positioning, key risks or people matters — the board and committee chairs are well-positioned to redirect less pressing topics to other venues. For example, deferring an item to management or subcommittees enables those issues to be handled thoroughly, but not derail the board’s agenda. Concerns and creative ideas should not be stifled, but a disciplined approach to assess and determine how to best manage issues yields better results. Board members can lead by modeling proactive and thoughtful inputs when crafting agendas as well as during meetings when raising and responding to issues.
Be decisive on what activities to stop, hold or reduce, and limit distractions. Success flows from both what the company does and does not do with resources. To drive progress on core priorities, companies must decline other activities. If a business initiative does not show high commercial potential or other high value to the company, consider whether it should be discontinued, paused or reduced pending further insights that may change the analysis. Most companies do not excel when trying to do too many things; teams are typically unable to execute projects well when moving in many directions. Often, business initiatives gain traction for reasons such as being interesting, trendy, familiar or sometimes emotional attachments have developed. While it can be tough to off-ramp appealing projects or products, long-term business success requires focus.
Recently in an advisory discussion, a CEO described to me four business lines the company was pursuing, spending ample time on all of them:
- One product had near-term potential to make large profits at scale within a year with major brand partners.
- One product had enormous long-term industrial potential because of a unique technology breakthrough.
- A third product, in consumer retail, was low-margin and difficult to operationalize because of bespoke product cycles in a sector experiencing dampened demand.
- The fourth was an add-on to pursue additional credits for the product available in an adjacent market, currently in a down cycle.
I asked whether the team should refocus most of their time on the first two and park or reduce the third for now, as it sounded clear that those were the most actionable opportunities with the highest achievable return on investment. My advice was to pause the fourth option to keep the focus on profitable business execution. If the company is able to scale up its core offering, it may generate bandwidth to pursue diversified product lines with more risky business cases.
Boards can play a vital role in sharpening company focus and enabling the executive team to take a disciplined approach. Today’s operating environment offers no lack of distractions and paths to consider. Leaders can differentiate strategy by fostering a purposeful, decisive culture to build on core strengths, then broaden out.