When people talk about the market prioritizing efficiency, they mean the bar for Return on Investment (ROI) has been raised. Investments with shaky return prospects need to be cut, and areas of high investment need all the attention.
INVESTMENTS TO CUT:
- Features with unclear customer impact
- New projects with 2+ year payback periods
- Products with low margins or expensive customer acquisition
- Acquisition channels with relatively low payback
- Underutilized or redundant software
- Excessive management or overlay headcount
INVESTMENTS TO DOUBLE-DOWN:
- Customer retention efforts
- Projects to generate savings, improve CCC, and drive efficiencies
- Direct response growth tactics with fast paybacks
- Experiments that are core to strategy or showing promising signs of success
- Employee retention and culture programs
Executing any of the above starts with listing your investments and figuring out where to draw the line given the expected return profile. Businesses generally invest in the 3 Ps: people, purchases, and projects. The right frameworks and processes for prioritizing and justifying investments is the starting point for delivering market-leading ROI (efficiency).
I’d welcome feedback if you disagree with any of the items I listed or would like to add other ideas.