Recently, I’ve seen some organizations attempt to justify why lean process design and operational excellence can eliminate the need to prioritize. Their rationale is: If we do things faster and better, we can do it all! Why waste time prioritizing!?
I’m reminded of management guru Peter Drucker’s statement, “There is nothing so useless as doing efficiently that which should not be done at all.” Or if you prefer a more pop culture spin, look no further than Alanis Morissette’s line in “Mary Jane” when she sang, “Well it’s full speed baby… in the wrong direction.”
In The Resource Management and Capacity Planning Handbook, I introduce a framework I call The Capacity Quadrant. At a high level, the four areas of excellence that lead to effective capacity planning are:
- Visibility – Seeing the big picture of demand and capacity
- Prioritization – Understanding which work is most important
- Optimization – Making the most efficient use of your resources
- Integration – Instituting multiple levels of planning to align the organization
Collectively, these areas operate in synergistic fashion. After all, it’s hard to prioritize if you don’t have the full picture of demand. It’s hard to optimize your resources if you’re not sure which work carries the most value, or what your true capacity vs demand picture looks like. And none of it is sustainable without the planning models in place to assure projects and people are aligned with current strategy and that high value items have the resources they need.
Is it good to have lean processes? Absolutely! But don’t be misled into thinking this supersedes the need to prioritize.
As for HOW to prioritize, generally I’ve seen a variety of methods, often with several used in combination:
- Composite, weighted Benefits/Risk score (this includes intagible benefits)
- Financial Indicator (such as NPV)
- Subjective priority (e.g., from a SME or process owner)
- Strategic Alignment (e.g., alignment to specific strategies, business units etc.)
- Urgency/Importance score
Common benefits cited in the benefits/risk score are:
- Regulatory/Contractual (mandatory work would garner a high score here)
- Strategic Alignment and Importance – including both the degree of alignment (strong fit vs. weak) and level of impact to business
- Financial Return/Profitability
- Competitive Advantage
- Business Operations (e.g., efficiency, responsiveness, reliability)
- Probability of Commercial Success
- Strategic Leverage (e.g., can spawn other products, not easily copied by others, long market life, etc.)
Typical risk areas to include are:
- Technical Complexity
- Program Complexity (e.g., number of stakeholders, use of outside vendors, use of offshore resources, number of intra and inter-program dependencies, extent of organizational or geographic reach, processes impacted, etc.)
- Existing Skill Base
- Availability of people and facilities
Using some combination of these methods as input, you can then assign a priority. Note that prioritization and ranking are two different things. The ultimate priority assigned, based on some combination of the above methods, is best as a priority “band” or grouping. I typically see 1-n ranking as only being effective for a competing subset of projects in a portfolio. Depending on the nature of your organization, it’s often counterproductive to attempt to force rank the entire portfolio and keep it current.
For more on prioritization, see my other blog post on this: Top Considerations for Project Prioritization.
Well, there you have it, the whys and hows of prioritization. I’d love to hear from you. What works well in YOUR organization?