As a leader, you’re required to make hard decisions that impact the future of your organization. Invariably, there are multiple projects to evaluate, differing opinions in your management team on how to proceed, and a long set of business priorities to address. Most times there are more projects than resources to complete the work. I once inherited a portfolio of over 50 projects for which we could resource only 10 in the defined timeframe. So being able to prioritize is key, and organizing your options into a set of measurable initiatives that can be reviewed in a logical manner is what will set you apart.
“Don’t be a time managers, be a priority manager.” ~ Denis Waitley
So how do you make this happen?
First, it’s important to say that you need a process. Reviewing a portfolio of projects is a regular occurrence, so defining a repeatable process will breed familiarity, comfort and efficiency over time.
It starts with a list of all the projects that you want to evaluate. Each project should have a business brief or business case that provides insight into the potential financial rewards, strategic importance and technical feasibility of the initiative.
You use this information as input into a project prioritization matrix (like the one you learned in Six Sigma training). This matrix allows you to put numbers next to pre-defined criteria, weigh them according to your business objectives, and line them up based on numeric totals. It all starts with what criteria you use – I suggest you consider the following:
- How does the initiative align with the mission, vision and strategy of our company? It all starts at the top – what does your company want to be and how does this initiative fit into the plan.
- Does the initiative in question offer some type of business synergy? If you have a technology project there might be synergies gained from using a platform that you already own. Maybe you want to buy a manufacturing operations, so you might ask, “Can the products we already make, be manufactured on this equipment?” Synergies offer opportunities to save money or speed a project through completion.
- How much cash flow will the project kick-off? Cash-flow is still king to most organizations, so it’s critical that you measure the cash a project will generate over a defined time horizon. There are several financial measures that can be used (ROI, ROCE, DCF, etc.). Speak to your CFO about the guidelines to follow.
- What is the likelihood of success and/or predictability of the results? Each initiative must be viewed through the lens of potential success. An unclear picture of potential success should not necessarily stop you – but, all things being equal, projects with a higher probability of success must be judged as a stronger option.
- What is the size of the market, the growth expectations and the competitive landscape? You don’t want to invest time and money in a project with limited upside. It’s critical you evaluate your options with a clear view of potential, and market dynamics.
- How will this initiative enhance your brand equity? Branding, next to cash-flow, is the most important contributor to business success. Projects that support, enhance and strengthen brand equity, should be viewed in a favorable light.
Once you have the criteria you will use to evaluate each option, then together with your team you will go through and score each initiative. You end up with a prioritized list for which you can further discuss and evaluate the projects that sit at the top.
You may decide to do further analysis on the top projects – simply as a check. Or, perhaps you want to review the projects that fall just beneath the “cut” point to reconfirm the initial findings. The point is that the numeric prioritization highlights the top projects, but should not stop discussions and debate within your team.
So, go ahead and start scoring and prioritizing your projects. Having a formal review process and methodology will bring structure, clarity and great rewards. Plus, it will show your team that you are a strong and organized leader!
What do you think? I’d like to hear from you.