Effective strategic guidelines have three clear aspects: they are linked to the corporate vision, they identify critical vulnerabilities, and they focus on what matters most.

The dilemma of strategic choices

Strategy isn’t a matter of choice; it’s a matter of choices . Few companies succeed based on a single big bet. They win through a series of trade-offs —regarding target customers, product, reach, and resources—that reinforce each other to create value. However, trying to describe every major choice in detail leads to information overload. Any strategy that attempts to address every important decision will be too complex to communicate, remember, or use as a guide for daily action. In strategy development, complexity is inevitable . But when it comes to execution, complexity kills . 

To implement their strategy, many companies commit to a handful of company-wide objectives that clarify the choices that will matter most in the coming years. These strategic priorities serve as pillars to ensure that different parts of the organization move in the same direction. They are a common tool for strategy execution, particularly among large companies.  

In a recent MIT Sloan study, 71% of S&P 500 companies reported an explicit set of priorities .  

Why many priorities fail

In many cases, however, strategic priorities fail to align the activities of the entire organization. Too often, objectives become ineffective due to vague or generic terms (such as “being the best in the industry”) or are riddled with buzzwords (such as “cloud-based” or “collective collaboration”).  

When developing a strategy for execution, managers often want to start by establishing their strategic priorities. The urge to get straight to the point is understandable, but it’s a mistake. The first step in developing effective priorities is to clarify whether the strategy should reside at the corporate level, the business unit level, or both. Once that’s clear, management teams should address three questions:  

1. What is our vision?

Why corporate vision does matter 

The most conservative managers often dismiss corporate vision as superficial and unrelated to the practicalities of execution. However, we have found that linking strategic priorities to a long-term aspiration—whether framed as a vision for a better future or a corporate mission—can improve the likelihood of a company successfully implementing its strategy.  

The risk of being trapped in the present 

Too often, leadership teams get stuck in the present when setting strategic goals. They analyze what’s working, assess current challenges, project the legacy business a few years into the future, and prioritize activities that will keep the business running much as usual.   

The temptation to anchor strategy in the status quo is understandable. Traditional companies can be predictable, comfortable, and often profitable. Unfortunately, this encourages executives to prioritize incremental improvements to win the last war rather than preparing for the next one. 

The role of an inspiring vision 

In dynamic markets , the most value-adding objectives are often novel or non-routine: for example, launching disruptive innovations or embedding digital capabilities across the enterprise. Corporate visions can help managers move beyond the status quo and encourage them to think more broadly and creatively about the steps needed to achieve the desired future. Elevating novel initiatives to the level of strategic priorities increases the likelihood that they will receive the sustained attention and investment necessary for success. 

Linking strategic priorities to the company’s vision also facilitates communication of those priorities among managers. Employees often perceive strategic priorities as yet another disconnected mandate (adding to the constant stream of key performance indicators, success factors, values, and initiatives) emanating from headquarters. By framing strategic priorities as stepping stones on the path to a desired future, executives can weave the objectives into a broader, more compelling, and enduring narrative. 

Connecting vision, inspiration, and commitment 

Employees who align with the company’s aspirations are more likely to commit to the priorities that support that vision. Profit-driven companies that can articulate how their offerings improve the lives of their customers or other stakeholders also have opportunities to inspire employees. IKEA ‘s vision , for example, is “to create a better everyday life for the many people,” which it pursues by offering a wide range of functional and stylish furniture at prices most consumers can afford.  Google , for instance, aspires to “organize the world’s information and make it universally accessible and useful.”   

Before diving into a debate about priorities, leaders should pause to consider their corporate vision, mission, or purpose . Is it vivid enough to counteract the specifics of the here and now? Is it inspiring and distinctive enough to communicate priorities to employees, ensure their commitment, and motivate them to persevere when times get tough? If not, executives should invest time in articulating a vision that can help break free from the constraints of business as usual and infuse meaning into their strategic priorities . 

2. What are our critical vulnerabilities?

Facing complexity without getting trapped 

Any strategy that attempts to outline every relevant option will be far too complex to guide action. To propel the company toward its desired future, leaders must navigate the treacherous pitfalls of strategic complexity. Many teams become so bogged down in the sheer number of strategic choices and their interdependencies that they end up drowning in the details. Other teams veer to the opposite extreme, ignoring complexity and setting goals based on little more than intuition. Neither approach is ideal. 

Instead, teams should acknowledge strategic complexity but work toward simplicity. One practical way to bridge this gap is to create a visual map of the company’s key choices. This highlights what matters most.  

An easy way to do this is to write your organization’s strategic options on sticky notes and arrange them on a whiteboard. You’ll want to capture the key attributes of your target customers (one per note), the benefits of your value proposition for those customers, the necessary capabilities and resources, barriers to entry, and any other options that are critical to the company’s future success. In our experience, the more, the better—at least initially. You can revisit them later to consolidate and eliminate items. 

Identify critical interdependencies and vulnerabilities 

The next step is to draw lines to show the interdependencies between the different options. The goal is to identify critical vulnerabilities: the elements of your strategy that are most important for success and also those most likely to fail in execution. Identifying critical vulnerabilities requires judgment and intuition; it cannot be treated as a simple checklist exercise. However, some general guidelines can help the team identify the most promising points of intervention on the strategy map. 

We’ve found that the most critical elements of a strategy tend to be those most closely connected to other options. Therefore, a good place to start is by identifying the points on your strategy map with the most connections. As the team assesses which elements are most critical to success, ask yourself which elements contribute most to value creation and capture: How does a particular option increase customers’ willingness to pay? How does it reduce costs? How does it discourage new entrants or help the company capitalize on the most promising new opportunities? An order-of-magnitude estimate of the financial impact, even if based on incomplete information, will be better than relying on intuition. 

Techniques for discovering weaknesses 

A few simple techniques can help teams assess which elements of their strategy are most vulnerable. One exercise involves putting yourself in the shoes of a startup determined to revolutionize its business. Looking at the company from its perspective, what is the weakest link? Where would the competition attack it? Similarly, how would a well-funded competitor from an adjacent market attack your company?  

A pre-mortem exercise can be a quick and effective way to identify weaknesses and obstacles. This can be done by dividing a group of managers into smaller groups and asking them to visualize what things will look like in five years if the company fails to execute its strategy. By looking back from the future, they can identify factors that could derail the strategy. 

In many cases, identifying critical vulnerabilities will be an iterative process spanning several sessions, giving team members time to gather and analyze data, test hypotheses, and resolve interdependencies among options. This process can help teams identify critical vulnerabilities that will inform their choice of strategic priorities. 

3. What should we prioritize?

The difficulty of choosing courses of action

Once a team has identified its most critical vulnerabilities, it needs to determine the best way to address them. For every solution, there will always be uncertainty regarding the time and resources required, the competitive response, technical feasibility, and the likelihood of success. Questions about interdependencies will further complicate the approaches to be taken.  

Launching a digital business can give you a head start on new entrants, for example, but it can also cannibalize the profits of the traditional business. Consider how Netflix’s foray into online streaming largely rendered its DVD rental business obsolete. 

Beware of too many initiatives

Sometimes, teams respond to a wide range of options by trying many things at random in the hope that something will work. Among the companies we studied, this approach is quite common. However, the danger of this strategy is that distributing corporate resources across too many objectives can deprive critical initiatives of the means they need to succeed. 

In a survey of managers from over 300 organizations, only 10% of respondents believed that all of their organization’s strategic priorities had the necessary funding, staffing, and management support to succeed. The rest stated that some or most of their company’s strategic priorities would fail, not due to market changes or competitors, but due to a lack of resources. 

Making Difficult Trade-offs

To avoid wasting time, effort, and resources, leaders must make trade-offs between competing and potentially conflicting goals. Discussions about how to resolve trade-offs are always difficult because they produce “winners” (who receive more resources and attention) and “losers” (who may see their pet projects ruined and their personal importance to the company diminished).  

Leadership teams often try a number of things to avoid conflict: juggling multiple priorities, agreeing to vague generalities, requesting endless further analysis, or waiting for total consensus to emerge. However, when it comes to setting strategic priorities, the absence of conflict is usually an indicator of failure rather than a sign of healthy discussion. 

Rules for making effective decisions

By working with numerous companies over the years, we have developed some resources to help teams make difficult decisions when setting strategic priorities: 

• Keep the discussion anchored in critical vulnerabilities to stay focused on the most urgent problems to solve. 

• Before discussing priorities, gather a data set on each vulnerability so that team members can work from the same facts. 

• Before discussing potential priorities, the team should agree on ground rules for how the discussion will be organized . For example, companies might establish rules for discussing alternatives, who can speak and when (e.g., senior leaders speak only after everyone else has had a chance to speak), or how to select from multiple options. These rules can serve as a guide to correct the course when the discussion starts to stray. 

The priorities that really matter

Strategic priorities can ensure that employees at all levels of the organization are working on the most critical activities. The most effective priorities are those that align with the corporate strategy, are linked to a broader vision or mission, and address critical vulnerabilities. The questions and tactics in this article can help leaders develop strategic priorities that maximize the likelihood of people working on what matters most.