In the last two columns, we explored techniques for leading in a complex environment –not by managing tasks, but by focusing on outcomes. We talked about defining those outcomes clearly and then translating them into “future perfect events” – observable states that tell us we’re on the right path. In this column, I want to look at the next challenge: how to orient your team in the near term so they can move you and your enterprise towards those future perfect states.
And let’s face it. This is the real work of leadership in complexity. It’s here where the difference between mere management and true leadership becomes apparent.
Because true leadership is not about setting objectives, managing timelines or enforcing processes. It’s about giving your team the tools to navigate in real time. That means they need to know not only where you want them to go. But critically, they also need to know how they can tell whether or not they are getting there. With this information they can make effective decisions that respect your intent – WITHOUT requiring your input.
And that is where the magic happens. When the world is complex – when plans can’t be trusted and events unfold in unpredictable ways, you don’t need a detailed playbook. You need a compass. You need to know how to keep going – without going in circles. If your team has the compass, they will keep making progress even in the face of contingencies – even while they are in the process of letting you know how the world has shifted under your feet.
The key to providing your team with the compass is, frankly, getting your priorities straight.
This of course is a “truism.” One of those things that is often said but seldom meant to be helpful. That’s because we often talk about priorities as if they were self-evident. But they rarely are. In a world of limited resources, conflicting incentives, and constant change, priorities are choices. Often, they are the hard ones.
This is why it’s not enough to say that something is “important” or even that it is “critical.” In practice, if everything is important or critical, then nothing is. The key to surviving and thriving in an environment where contingency is a fact of life is being able to make tradeoffs. Teams can only develop that ability when the leadership is brave enough to make the high level choices about priorities and leave it to the team to interpret those priorities in responding to daily events.
At this point it is vital to go back and cover a subject I have previously covered in some detail – and that is the fact that you can never make everything a priority. The forces driving your decisions are always going to be in tension. If you don’t explicitly select which of these forces to prioritize you will end up wandering around in circles as you respond to each driving force in turn.
In a previous article I explained the system I use to describe the forces driving a business. They are Cash, Profit, Assets, Growth, and People. You can read my earlier column if you want to know more about why I think this model works.
The main point, though, is that these are not merely categories – they are, in fact, forces that are always in tension to some degree because they cannot all be satisfied at the same time. Choosing to prioritize on always comes at the expense of the others. That’s why leadership matters: because someone has to decide which tradeoffs are worth making, and when.
The most effective way to do this is simply to talk about priorities. Decide which of these forces will be the focus for you and your team – and then stick to that priority until enough progress has been made. Priorities can shift over time, but not every week. Teams need stability in order to align their actions and make meaningful progress. So, when you pick a priority, it needs to hold for long enough that the work can adapt to it.
But setting the priority is pointless if you don’t know whether it is being respected. But how will your team – know whether they’re respecting the priority you’ve set?
That brings me to the central idea of this column – the redefinition of the “KPI.” Usually this means Key Performance Indicator and these KPI’s are often used to create a “dashboard” that is reviewed by management periodically to evaluate the health of the business.
But I want to offer a new definition: KPI = Key Priority Indicator.
A Key Priority Indicator is a measure chosen by the leader to help the team know whether they are honouring the priority they’ve been given. It is like a Key Performance Indicator – in fact, it may even be one of a larger set of such indicators. The “Key” is, though, that there can only be one or maybe two Key Priority Indicators. It must be the thing which you insist on measuring and insist on sharing with the team – regularly and candidly.
It’s not a universal benchmark. It’s not about comparing teams or hitting targets for their own sake. It’s a signal – chosen deliberately – that helps people evaluate whether they are aligning their actions with what matters most right now.
Let me give a few simplistic examples:
If your priority is Cash, then your KPI might be “days of cash on hand” – a real-time signal that tells you whether your decisions are protecting the company’s liquidity.
If you’ve shifted focus to Growth, your KPI could be the rate at which new deals are closed – a sign that your sales cycle is generating more revenue per unit time.
But if your priority is Profit, you might track “gross margin rate” to make sure that you are not focused on how much work you are bringing in – but actually how much of that money is staying in your account.
What matters is not the metric itself. What matters is that the metric reflects the priority, and that everyone understands why it was chosen. And, crucially, they need to know how it is calculated so that they can understand how they might contribute.
You don’t need everyone to make the priority their only job. But you need them to understand that when they have choices to make, they must respect the priority. If an extra software license is going unused because a developer left the team – in a cash-priority situation someone should suggest cancelling it. In contrast if the team is growing and getting a new release out the door is the priority, and there are not enough licenses to go around then someone on the team should be suggesting that investing in another license would remove a bottleneck.
If you are in a growth-priority situation the technical team needs to be fully alive to the opportunities to help the sales team land deals by providing support or demos. Similarly, if you are in a cash-priority situation the sales team needs to be focused on deals that need the least effort to close.
The list could go on… The point is that in a complex environment, it’s rarely possible to execute every step of a plan – as planned. Choices will have to be made. Your job as a leader is to download the ability to make appropriate choices to your team by giving them a clear criteria by which to make them. You do this by setting, emphasizing, and evaluating your priorities. If done well, it will not be hard to motivate the team. No one wants to be the person who is NOT contributing to what is important. The hard part will be making sure you set priorities, that you communicate them clearly and stick to them. Progress on the KPI must be a key message week and week out. It must be something from which no one can hide – including you.
Outcomes and Future perfect events help you cut through complexity to find the direction you need to go. But without a rigorous process for setting and evaluating priorities you and your team will not know how to navigate in the messy world of contingency to keep moving in the right direction.
This is a key leadership moment – because leadership is the art of influencing human behaviour so as to achieve the mission in the manner desired by you, the leader.
By setting and respecting priorities you let people know what achieving the mission requires. But it also gives them guidance about how to know they are contributing. And then it challenges them to decide to contribute in a way that they feel is effective, in a way that motivates them to do more.
And when you have a team that is motivated to move your KPI in the right direction you no longer need to manage them.
Because you are leading them.
