HBR Guide to Managing Strategic Initiatives

CHAPTER 5

A Better Way to Set Strategic Priorities

by Derek Lidow

Smart leaders understand that their job requires them to identify trade-offs, choosing what not to do as much as what to do. Grading the importance of various initiatives in an environment of finite resources is a primary test of leadership.

To meet this challenge, leaders often turn to rank ordering their priorities; it is natural and easy to make a list. When I work with leaders on the crucial task of priority setting, however, I caution against rank ordering. It can be tremendously demotivating to managers to be assigned a rank, and it all but guarantees dissension and turf wars between team members.

A better way to establish priorities is to put rank ordering aside and return ...