Shiraz Ritwik, the Head of BFSI and CPG Growth at LatentView Analytics, explains why companies should use a mixture of metrics and industry insights to define the success of their reprioritization initiatives. This article originally appeared in Insight Jam, an enterprise IT community that enables human conversation on AI.

In Jim Collins’ classic business management book, “Good to Great,” the concept of “confronting the brutal facts” is a key principle that successful companies apply to drive their transformation from good to great—one that is rooted in data and analytics. One such company is Netflix. Started in 1997 as a mail-order DVD rental business, Netflix quickly disrupted traditional brick-and-mortar chains like Blockbuster. But starting in the mid-2000s, Netflix looked at the data on consumer preferences and noticed a clear shift: more and more were streaming programs online.

Even though Netflix’s entire business model was predicated on physical DVDs, they confronted the brutal facts of changing consumer behavior, and they adapted, becoming the first legitimate streaming service online. Their bet turned out to be a pretty good one. Since 2013, their global subscriber base has increased from 34 million to nearly 240 million.

Today, we’re confronting big, seismic changes on a yearly basis, necessitating consistent strategic reprioritization that EY has likened to riding a roller coaster. Since 2019, there have been at least four distinct phases of reprioritization:

• 2019 – Pre-Pandemic: growth acceleration

• 2020 – Pandemic: business continuity

• 2021 – The New Normal: recovery, renewed focus on growth, and digital transformation

• 2022 – Inflation and Global Uncertainty: focus on profitability

In the face of this rollercoaster, consistent reprioritization can just as easily pull you in the wrong direction as the right. So, when everything is necessary, what change happens first? Take the following steps to build a strategic reprioritization plan:

1) What’s the base of the business?

One of the biggest mistakes companies make in their reprioritization is that they often focus too closely on external factors. Yes, external factors might necessitate change, but businesses need to anchor initiatives, goals, and products towards things that are solid and will not change.

To take EY’s roller-coaster metaphor a bit further, if you’re too focused on the ups and downs of the ride—the externalities that push you towards change—you might fall off the rails. Instead, remember that roller coasters always depart from and return to the same place. They’re grounded and have a solid, stable core.

Oftentimes, this is a simple yet powerful mantra that grounds the business and keeps it laser-focused as it encounters change. But behind a simple concept is a rigorously researched, tested, and debated reprioritization that connects who you are with who you want to be. It’s what you’re passionate about, it’s what you can be the best in the world at, and it’s what drives your economic engine. Even though Netflix went through pretty seismic change, they didn’t change the core of who they were. Their mission is to “entertain the world.” It’s the delivery of that entertainment that changed, but not the mission itself.

You should start with the top 3 or 4 areas you want to affect and work backward. If you can link data to what leaders care about, you will create synergy. Think of the actionable impact you can have along each of the 3 following vectors:

• Risk reduction/mitigation

• Cost optimization and operational efficiency

• Customer centricity

2) What does success look like?

Success in reprioritization is a multifaceted concept that combines qualitative and quantitative metrics. The definition of success varies across industries and must be tailored to the organization’s specific goals and objectives.

In some cases, attribution can be very difficult. Take, for example, Zillow, the housing marketplace. In a Zillow survey, 69 percent of people reported viewing for-sale homes on a real estate website, but far fewer reported actually purchasing a house via those same websites. These sites played a role in the home-buying journey, but one that is hard to quantify.

In this case, success metrics can’t be defined by whether a user bought a house or got an agent through Zillow. The company has worked to break down and visualize the omnichannel customer journey—they want to measure the effect of each touchpoint, then predict and recommend the NEXT action in a customer’s journey. This nuanced perspective enables organizations to break down their overarching objectives into discrete and measurable pieces, allowing for a comprehensive assessment of their achievements.

3) Reprioritization across industries

Different industries require distinct approaches to reprioritization based on their unique challenges and opportunities.

• Finance: In the finance sector, particularly in risk management, the marriage of corporate strategy and risk strategy is crucial. To effectively manage risk, a holistic view that extends beyond conventional risk appetite metrics is necessary. With the possibility of a recession lingering and the pressure to continue building new solutions—especially with AI—CFOs must manage measured risk without stifling innovation. This entails considering external data points to make informed decisions that balance risk and reward.

• Real Estate: In the real estate industry, a focus on digital transformation and customer experience is paramount. Businesses must constantly question the “why” behind their decisions, study outliers in data, and drive outcomes that align with their business objectives. This requires a thorough understanding of customer behavior and preferences to ensure that initiatives lead to tangible business growth.

• Marketplaces: For marketplaces, the key to strategic reprioritization lies in predictive analytics rather than reactive ones. A dynamic understanding of shifts in customer behavior empowers organizations to anticipate purchasing trends—product preferences, customer journey friction, and fraud patterns—enabling them to make proactive strategic decisions that drive success.

From Good to Great

Netflix’s initial reprioritization was the first of many—they pioneered personalized recommendations, in-house programming such as Stranger Things, and a host of other data-driven pivots and bets. But today, they are under pressure from a growing host of rivals such as Prime, Disney+, and Peacock. This pressure has forced them to crack down on password sharing and raise prices. If they are to weather these challenges, they must again innovate and reprioritize.

Similarly, as advancements in AI disrupt the world of business, we might be in the midst of another key transformational moment. How companies confront the brutal truth will delineate who can take advantage of this and who will be left behind. But organizations that successfully navigate these shifts do so by anchoring their initiatives in foundational principles, aligning their efforts with leaders’ priorities, measuring success both qualitatively and quantitatively, and avoiding a “one size fits all” approach.