Prioritizing in troubled times: go after your benefits!
We’ve said it before (at the start of Corona), but we’re saying it again because this topic remains highly actual: Having to deal with changes in the market as an organization, is not new. Having to deal with changes that continuously follow up on each other in such rapid succession, is.
On top of that, prices increase heavily due to current economic and political crises, which make it harder for organizations to do business. Consequently, life in general gets more expensive. People want to be compensated for this by their employer. This results in increased resource costs (for both commodities and people) and put pressure on budget exercises. Just recently, we all read in Belgian newspapers that big cities need to cut of 10% of their budgets. And not only governments, but also organizations in the private sector experience the same challenges. How to manage all those changing factors and continue to get strategic projects executed within time and estimated budget? In other words:
How to get the portfolio roadmap back on track?
Where to start?
Organizations are forced to define new priorities to tackle the changed world. Reviewing and shifting in project / portfolio priorities is the way to go. Knowing that when you are done with this exercise, you should be prepared to do it all over again due to another change in the market… You’re not the only one if you don’t know where to start.
5 tips to efficiently support project selection without getting physically injured:
- Reviewing your strategic portfolio is not a one-time-shot
No matter if your organization is working in an agile, hybrid or project-driven way, you need to review your strategic portfolio at least quarterly. Only this way you will be able to cope with changes in the market and don’t get behind on realizing your strategic goals at the same time.
- Use Pareto (80/20) & knock-out criteria to keep focus.
The 20% largest initiatives represent 80% of the available capacity or resources. Focus your prioritization discussions on this short but strategic list; this is where the choices need to be made. Clearly communicated knock-out criteria can already reduce project lists from the beginning.
- KIS: Compare what can be compared
If you want people to understand and accept why certain decisions were made, Keep It as Simple as possible from the beginning. Let any project initiator link his/her project to the one category/benefit it contributes the most to (Growth, Cost reduction, Risk avoidance, …). You sharpen the business case and avoid getting into complex multi-criteria models that e.g. try to compare a marketing project with a safety project…
- Benefit ownership must be clear
By linking every project idea to one company benefit in the previous step, you are grouping projects that can be compared with each other (= program management). A next simple step is to make sure that the ownership for a benefit is clear. Whether the benefit is cost reduction or customer satisfaction, you let one benefit owner evaluate and rank all projects that claim to contribute to his benefit (If manager X will be evaluated on NPS evolution within 1 or 2 years, he/she is the one prioritizing all ideas who claim to contribute to that, whoever in the organization entered them).
- Simple questions are hard (to avoid)
The more complex your model gets, the easier for a board NOT to decide. A simple question to a board might still be hard to take but is hard to avoid: if all your valuable ideas are in relevant categories (by strategic goal/benefit) and every category is ranked by the benefit owner, then you can limit yourself to a question that everybody understands: “How much money do we want to put in each category? What is the current priority of growth versus efficiency versus risk reduction?”.
Can you use support in reviewing your portfolio? Don’t hesitate to get in touch. With 20 years of experience in strategic portfolio and program management, we know what will help your organization to get back on track and move forward.