Many executives are comfortable with their current project prioritization process, one based on a “beauty parade” or a “police line-up” of projects.
Well, I recently came across some research that shows that even the traditional police line-ups can be improved. And guess what; they do it using the same approach that leading PMOs use to prioritize projects. That approach is called the analytic hierarchy process (AHP).
So, if your prioritization process still involves a “line up” - presenting a list of projects (or pitches) to executives and letting them choose – it’s time to move on.
Police Identity Parades
The leading cause of wrongful conviction is when a witness identifies the wrong person. We’ve all seen it in movies; a line-up of possible bad-guys and the fretful witness trying to choose.
Well, research shows that traditional “line-ups” are bad practice – yet this is the method that many, many organizations still use to select their portfolio of projects. It throws up both too many false positives and false negatives… just like when picking projects.
Researchers found that they got better results by showing the “suspects” one-at-a-time and asking for a yes/no answer. But the error-rates are still way too high.
Interestingly, the next step in improving police “line-ups” came for the world of prioritization – a topic close to my heart!
Researchers used the analytic hierarchy process (AHP – the same method we use in our project prioritization software to “prioritize” suspects. The result? Well, the AHP-based “identity parades” were significantly better.
What’s all this got to do with project prioritization?
Well, the core idea behind this research was to move from picking a single “bad guy” and to treat it like a prioritization problem – “which suspects are most worthy of our further investigation?” – and researchers know that AHP is a well-proven methodology for prioritization work. If you think about it;
Picking the “wrong man” is equivalent to putting a weak project into the portfolio.
Missing the correct identification in an ID-parade is like not picking a project that would have added real value.
The reduction in “wrong project”-type errors in particular was significant.
Consider the typical project selection process: the “best” projects are often quite easy to spot – they are usually strongly aligned to strategy. It’s easy to spot them (just like the one-armed bad-guy with a scar across his face).
But there are a whole lot of other projects that enjoy strong sponsorship from one team or another (that’s a polite way of saying “beware the pet projects!”), there’s almost always more demand than capacity and some (many?) of the “wrong” projects get in. This is like the majority of criminal cases; the bad guy looks, well, normal. He’s harder to spot.
Introducing a proven decision-making process like AHP can really help identify the projects that should add the most value and give you the tools to allow you to reject (or postpone) the less attractive projects.
The Magic of AHP
So why is it that this methodology works so well?
It comes down to the way humans made decisions. I could write on this topic for hours; I won’t. The bottom line is that we humans suffer from something like 150 (and counting) different biases in decision-making. These biases are exacerbated when the decision is complex or when we’re working with a group of decision-makers (whose goals are seldom aligned).
To make matters worse, we’re working under conditions of uncertainty.
AHP (and there are other methodologies) helps by structuring the decision in a way that reduces many of these biases. Done right, it’s collaborative in a way that helps reduce uncertainty, increase buy-in and deliver transparency and accountability. Much of this is down to a process of “pairwise comparison” that helps drive agreement between stakeholders especially in the definition of what “value” means.
This process is designed to minimize bias – it’s based on solid research, not an accident -- though no process can eliminate it completely.
Powerpoint, spreadsheets or even PPM tools simply weren’t designed to do this. That’s why an AHP-based solution simply works better. In our experience, it’s common to get 20%-40% more “value” from a project portfolio using this approach than using less formal processes.
So, maybe it’s time for you to get the crayons out and create your very own “Wanted” poster. It might look something like this (which is downloadable, by the way – go get creative!)