Identifying the Right Priorities for Your Organization
Most companies today struggle with having too much to do with too few resources.
It’s a problem for Fortune 500 Corporations and it’s a problem for two-person start-ups. How do you optimize your people, your company’s most precious resource?
Portfolio prioritization is a key way to address this issue. Prioritizing your organization’s needs as a “portfolio of work” will help you to align your available capacity to the most critical work. The key is:
Understand your company goals and the relative value of each.
Score your projects against your weighted drivers.
Understand the required effort for each of the potential projects/work.
Quantify the available capacity of your teams to deliver work.
Bringing these four factors together in a quantitative manner, will empower you to properly prioritize.
1. Understand your company goals and objectives and the importance of each.
To do this, Excelerate uses a scoring methodology. Most companies will have annual or quarterly objectives such as grow revenue, reduce customer service issues or develop innovative products. Your company could have all three of these objectives at once however, each one should be weighted against the others. For example, if your customer service organization is hemorrhaging operational costs, perhaps it is weighted as more important. On the other hand, if topline revenue is your key performance indicator to your board, perhaps it is weighted more critically.
There are a variety of ways to support a group of people in weighting their value drivers and the right solution should be customized to your business. One way we help our clients to weigh company goals is to allow the leadership to vote on each goal or objective, using a weighted scale. We limit the number of “this is the most important” votes for each person, and then allow everyone multiple “least important” ratings. In the end, by adding up the votes for each of the goals or objectives, you will have a nicely weighted set of Priority Drivers for your projects.
2. Score your list of approved projects against the weighted drivers.
Before you can score your list of projects, it is important that you have completed a Return On Investment analysis on each of your projects. You need to understand what value the project drives for your business, the risk of not doing the project, and the total cost of ownershjp for the solution. Projects lacking a net positive ROI should not be on the list to be scored.
Next you need to then determine which projects support which of your weighted priority drivers. Does the scope of that project support revenue generation? If so, give it the number of points you assigned to your grow revenue driver. Does it also improve operational efficiency for our customer service team? If it does, then allot it those points as well. Does it help product development to create innovative products? If it doesn’t then it won’t get the innovation driver points. When you understand the scope and value of the project, it is easy to determine which priority drivers it supports. Projects receive points based on the weighted drivers they support to create a ranked list of projects.
3. Define the Level Of Effort (LOE) for your projects.
Considerations for LOE include the cross-functional nature of the effort (more cross-functional usually mean they are more complex), the actual labor hours needed to accomplish the work and collaborate, and the length of the project. Make sure to consult with the people who understand the work best. They can give an honest assessment of the level of effort. Also, make sure to look at LOE by team or role, not just as a whole.
4. How many people do you have, and what percentage of their time can be spent on this type of work?
How many developers, BA’s, managers, etc. does your organization have? Do they split time between new projects and supporting legacy systems? How much time per week will they have available to support this work? Conducting a time tracking analysis is a great way to get to these numbers.
Bringing it all together.
Available capacity vs. demand (projects) analysis against your force-ranked project list can be done with a variety of tools. Many PMO tools offer Portfolio Management modules. You can even use MS Excel. The point is to have your list of scored and ranked work, the level of effort for each of those projects (this is the demand), and the available capacity of your teams. You then simply run down the list to see where the cutline of available capacity runs out. Projects above the line can move forward. While projects below the line will need to wait until capacity becomes available or priorities change.
Managing your company’s demands as a prioritized portfolio of work will enable you to align key resources to the highest priority work. This simple exercise can drive tremendous value to your organization.
Written by:
ANN TOFOLO
With over 20 years of experience leading organizations through transformations, Ann helps Excelerate’s clients to navigate the complexities of modern business and considers herself a connoisseur of fine breakfasts.