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Project Prioritization Methods: The Pros and Cons

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May 7, 2014 11:59:00 AM

Tail_on_the_Donkey

I was at a 6-year-old’s birthday party the other day, and they played Pin the Tail on the Donkey. You know the game: you put a picture of a donkey on the wall, except poor Eyore has no tail. Then you blindfold one of the children and give them a tail attached to a pin and off they go…. the tail gets stuck on the nose, on the donkey’s legs but almost never on the tail.

And while the blindfolded player fumbles around, the rest of the room erupts into yells of “higher!” “lower!” “left!” and “right!”

What does this remind me of? I’m afraid I was put in mind of a typical project prioritization process.

Project Prioritization Methods

There are a number of ways in which organizations select projects. This list sets out the most common project prioritization methods.

#1: Allocate budgets to departments to spend

Pros

  • Allows each department to set its own priorities

Cons

  • Departmental priorities tend to be poorly aligned with each other

  • Mish-mash of projects, some pointing “in opposite directions”

  • Lack of process and oversight leads to inefficient use of resources

  • Subject to “local biases” (e.g. this just blew up – we have to fix it as top priority for our department to work”, but it might not be so important at the corporate level)

#2: Exec prioritization meetings where an advocate presents each project

Pros

  • Simple to understand

  • Executives like to flex their muscles

Cons

  • Very time-intensive for executives

  • Decisions often made for political reasons

  • Typically, “loudest voice” gets projects – not driven by true business priorities

  • Potentially very difficult for project manager-advocates to “take on” senior executives 

#3: Spread-sheet based project scoring (decision matrix, or similar)

Pros

  • Cheap

Cons

  • Lack of mechanism to build consensus around criteria weights means this is really just a black-box with poor buy-in

  • Politics creep in again as the spreadsheet owner potentially gets to “manipulate” the outcome

  • Does not scale with the number of projects or number of “evaluators” of those projects

#4: Value-based collaborative project prioritization (using AHP)

Pros

  • Rational and based on business goals
  • Collaborative, delivering buy-in so more projects succeed
  • Breaks down "stove-pipe" mentality
  • Helps reduce politics
  • Quick to implement

Cons

  • It costs money... but not that much

  • Unless you're already doing it this way, you'll need to change your prioritization process, but it's worth it

Free sounds great (I'm looking at you, Mr Spreadsheet Jockey), but it's typically not as effective as doing it properly using value-based prioritization. And let's be clear, organizations that prioritize and actively manage the portfolio can achieve 40% more value than those that don't.

One of the most common methods to do this kind of prioritization is analytical hierachy process (AHP). It's been around for a while and is very powerful. AHP is highly collaborative which helps build support for the portfolio - important at the execution stage.

In fact, using AHP is like taking the blindfold off. Suddenly you can pin the tail on the correct part of the donkey (the “ass”, if you like) every time.

If you want to learn more about value-based prioritization, this webinar (by James Brown, no less) will set the scene and will give you concrete steps to getting started. It's an action-packed, fun-filled overdose of project prioritization knowledge.

Just watch the 6-year-olds!

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