How should you prioritize your priorities?
In our personal lives and our professional lives, we need to set priorities. There’s always more to do than we have time or resources to do. If you are bored – then I can find you a job or two!
For an organization, it’s even more important; an individual can recall their priorities and flex them as necessary, but an organization is made up of people, and people need to agree the priorities and consider them when making decisions.
Priorities help us decide which project/ initiative to do first. With limited resources, you can’t do everything. It’s unrealistic to follow up on every idea.
The scatter gun approach
One of the pitfalls is to have too many priorities with limited, or no, logic linking them. You may want to be profitable, and create a great customer experience, and do leading research - but these priorities conflict. So, you also need to prioritize your priorities.
An easy approach is to look for the highest return on investment (whether the investment is in money, time, reputation, or whatever). Line up the initiatives in order of value (benefits / costs) and pick the highest returns. It doesn’t require much thinking. It’s a good strategy for an investment portfolio (provided you have a clever way to factor in risk and the reliability of your predictions).
It doesn’t make sense in pretty much any other context because business, and life are complex - you may head off to the East one day, and to the West the next, and waste effort, and end up back where you started!
Actually, it doesn’t make sense for an investment portfolio either, because it exposes you to unknown risk. The point of an investment portfolio is to balance risk. For example, to guard against cryptocurrency going badly wrong, you might limit your cryptocurrency holding to 10% of the whole and invest some of your money in biotechnology or agribusiness.
The “highest rate of return” is a popular approach, but not very useful in reality.
It’s easy to lose your way with the wrong priorities.
- To keep costs low - you don’t invest in research and development (don’t find next year’s products), and don’t train staff (affects recruitment and retention, and the quality of your workers).
- To maximize profitable income - you chase after profitable product lines and drop the less profitable ones (customers don’t see your brand name).
- To increase satisfaction - you bludgeon customers with questionnaires which will always get the right answer … “are you neutral, happy, or ecstatic?”
Three priorities (manage costs, maximize profitable income, customer satisfaction), which come into conflict in as little as 12 months when the customers move on - you didn’t know that they weren’t satisfied and aren’t loyal, or that their tastes have changed!
Most organizations need an overriding priority which all priorities contribute to, such as “to organize the world’s information and make it universally accessible and useful” (Google).
hierarchy of purpose
Once you know your single most important priority, you know how to prioritize all of your other priorities.
- Purpose: what is the purpose of the organization? Does it have a single purpose? What is the best way to deliver that purpose? Are there different ways to pursue this purpose, e.g. through Scenario Planning? What is the strategic vision?
- Priorities: given the purpose and strategic vision, what matters most? There will be long-term priorities, 2-5-year priorities, and short-term priorities, and they need to be consistent.
- Projects: once you know the priorities and the hierarchy of priorities, which projects merit investment and which projects need their investment recovered and put into projects better aligned to the purpose and vision? Which align and should be resourced, and which should be stopped or scrapped?
- People: some people achieve better results than others. Some are great managing individual projects but do so by cannibalizing other project resources wantonly, whereas others take a broader view. Who are the best people to manage the projects that align to the priorities? What is the opportunity cost of putting them on one rather than another project? How can you mitigate this and achieve the best for every project?
- Performance: traditionally project performance indicators have been linked to inputs, the so-called ‘iron triangle’ of time, cost and quality. Project outputs are much easier to track than (business) outcomes, such as benefits, impact, goals. It is the outcomes, and outcome-related targets that really matter. They demonstrate that value has been created and provide evidence of progress
What gets measured, gets done
But you can only enforce policies if you measure what’s actually happening where ‘the rubber hits the road’.
Admittedly, we all have our ‘pet projects’, and some people have the knack of being able to push them through whether they contribute to a priority or not!
With appropriate standards, you can determine what contribution each initiative makes to your intermediate priorities and to your top priority and decide where to invest limited resources.
Benefits management enables you to monitor the return on investment in a wide range of initiatives and determine their contribution to the priorities you have set. You will know where and when to cut your losses or when to invest more – all of which is likely to depend on changes in your business environment.
Amplify™ Strategy Execution software enables organizations to execute strategies that create value for their stakeholders. Our platform equips them to achieve goals, priorities and business impact by optimizing their investment in a portfolio of change initiatives.