In fact, it’s actually a strategic decision and whether you prioritize your projects effectively depends on two things: the clarity of your strategic intent and the accuracy of the expected value generated by each project.
If you can understand how to achieve these two, then your project prioritization and its effectiveness can go a long way to shifting your position in the competitive landscape of your organization.
Project prioritization is how high-level business focus translates into execution. When a company struggles to differentiate between important and unimportant work, stagnates within the market or with innovative ideas or even fails, the problem isn’t bad processes – it’s a lack of focus on a more strategic level.
Project prioritization has a strategic and a technical side, and both need to work together to see prioritization be a true success. Trying to solve the technical side without addressing the strategic first is a recipe for failure – and if you fail to plan, you plan to fail.
Any project manager can come up with reasons to promote their own projects. And most project managers do. But linking the project to the bigger picture, arguing for its potential business value, and following a consistent set of criteria based on a long-term strategic vision to evaluate projects is an approach very few businesses adopt, but one that should drive every business decision made.
In fact, when a company fails at project prioritization, it’s usually due to one of the following reasons:
There is an underlying cause that can be responsible for all reasons; an insufficient understanding of what good strategy actually is.
The absence of a real strategy is arguably the most common reason for failed project prioritization and one that most executives in large corporations fail to avoid. They don’t understand what prevents them from developing a great corporate-level strategy and for large organizations with years of market presence, the biggest enemy is complacency.
So how exactly does complacency destroy corporate-level strategies?
By making risk the company’s number one enemy. Complacent leaders avoid risk in their strategic plans, instead promising big results. Their projections show huge growth, but their action plans focus on maintaining current processes, without creating something new or driving innovation, but this approach doesn’t work. It generally handicaps the organization and denies it the opportunity to focus its efforts on one breakthrough move. Therefore, at best, the organization delivers mediocre results, without ever actually delivering on the growth projections.
Prioritizing projects is essentially the management of conflicting intentions at a higher level of the organization.
Too often, leaders determine a small set of strategic priorities and align every project with at least one of those priorities. This is a great move until a decision between two conflicting priorities has to be made.
For example, imagine that the goal is to achieve customer satisfaction rates of 95% and one project will increase satisfaction by 2%, while another project will decrease satisfaction by 1%. The obvious decision would be to choose the first option and go ahead with the project that will increase satisfaction. But what if the second project is twice as fast and half the cost of the first one? What if it’s a new product that the competition doesn’t have and customer satisfaction is only important for entrenched products?
The decision becomes much harder to make when there are no clear rules to follow. This is where organizations need to have a robust process in place that can handle these types of conflicts.
This one screams a lack of strategic thinking and maturity. It takes the demand for the company’s services or products for granted and, in the case of a sudden shift in market conditions, leaves the business in a heavily disadvantaged position.
Availability of resources should never dictate strategic priorities. On the contrary, resources should be bent and reallocated based on the strategic needs of the company. Don’t approve projects because you can fund them, free up resources to feed the projects with the biggest business impact.
When it comes to project prioritization, strategy should always come first. By understanding and following these three steps, you can make sure your company is making decisions based on what’s best for the business, not just what’s possible in the short-term.
