Quick tips on how to prioritize projects
Relying on a lengthy decision-making process when a potential revenue-creation project arises often results in a lost opportunity. Using Agile principles to prioritize business projects helps to make your product or service development process more effective and more efficient, to save your organization time and to protect or even generate revenue.
But before your organization sets out on a prioritizing mission, it’s important to know some of the main issues that companies tend to face when trying to prioritize their projects.
Common Challenges to Prioritization
1) An inability to actually acknowledge that prioritization is needed
There’s a tendency in many business environments to simply say that no matter what comes your way, it must be done without first assessing its contribution toward the company’s strategic objectives. If you have the capacity to keep up with everything, great, you can do this; otherwise, you need to prioritize because not everything that comes your way is equally valuable.
2) Paralysis through analysis
The tendency to overthink and overanalyze every opportunity before taking action is a major barrier for many organizations. Will more analysis really give you a better answer?
3) Having too many people involved in the prioritization process
In larger groups, you’re more likely to have conflicting priorities and difficulty reaching consensus. Being in this position is a symptom of a lack of delegation of authority and responsibility, which often results in prolonged arguments that are typically won by the most forceful or the highest paid, or worse, in deadlock.
4) Lack of transparency
There must be shared understanding of what’s expected of all those who participate in or are affected by prioritization; the rules of the game, so to speak. For example, when people don’t agree on criteria for judging how any project (or a piece of a project) contributes to the company’s overall goals, they will only consider how the work affects their local objectives, which frequently turn out to be hidden personal ones. In such circumstances it is impossible for a prioritization process to come up with fair and repeatable outcomes.
How to Prioritize Projects
The best way to deal with these challenges is to have a very clear set of rules for defining priorities and base them on a model that’s transparent, understood and consistently applied. That way you’ll avoid people constantly trying to renegotiate priorities to meet their individual needs.
Be sure to have a clear definition of who gets to prioritize and why those people get to make the call. If certain members of your team have the knowledge and experience to make better decisions for the company, don’t hesitate to give them the responsibility and the authority. Not only are you likely to be much happier with the decisions made, you’ll also avoid the problem of having too many people involved in the decision-making process.
From there you’ll need to define some form of value model that can be used for prioritizing. That value model will serve to explain why the project is valuable to the organization. The model needs to accommodate time sensitivity and risk factors for each project. Be able to quickly determine if the opportunity is going to expire before your company is able to take action to capitalize on it. Within Agile principles, something is better than nothing. Don’t waste time trying to make the “perfect” decision based on “perfect” data. Rather, make the best decision possible given what you know at the time and with numbers that are good enough. Better still, split your projects up into smaller pieces and prioritize those instead of one big lump of work. If you can do this, you’re likely to find that prioritizing gets easier.
Consider the Cost of Delay
The solutions for dealing with prioritization challenges can be made all the more real if project leaders can calculate a project’s cost of delay. For instance, if you considered what it could cost your company to bring a product to market in three months instead of three weeks from now, you will have quantified a cost of delay. In commercial organizations, a quick way to arrive at a useful cost of delay figure is to consider four factors, each expressed as an amount of money: increased revenue, retained revenue, avoided costs and decreased costs. In government organizations, revenue usually requires a different set of considerations such as reputational risk, service quality or service coverage (and thus is much more difficult to quantify as money).
If you are able to break your projects down into smaller yet still deliverable units of value, you can apply the cost of delay idea at that level, too, and prioritize or re-prioritize accordingly. This lets you determine if you’re truly working on the most important thing relative to your goals. It is here that project leaders should help company owners understand that prioritization is inherently about trade-offs, and that assigning a value to ideas competing for resources is an effective way of making trade-off decisions.
When you’ve prioritized your work once, don’t stop. Prioritization is an ongoing conversation rather than an occasional one. Things change, so be prepared for regular check-ins to keep everyone focused on what’s most important in terms of the organization’s strategic objectives, and as you learn from work already completed, to seize opportunities to improve your product or service throughout the development process.