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Project Prioritization with Purpose

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Portfolio management is about maximizing organizational value delivery through programs and projects. In order to maximize value delivery, the governance teams that approve work and prioritize projects need to share a common view of “value” in order to select the most valuable work and assign the right resources to that work. Understanding the relative “value” of each program and project in the portfolio is at the heart of portfolio management and determines what work is selected, how it is prioritized, where resources are allocated, etc. In order to select a winning portfolio, every governance team needs to share a common understanding of value; without it, you’ll fail to realize the full potential of your portfolio.

However, the definition of “value” will differ at every company because every company has different strategic goals, places varying emphasis on financial metrics, and has different levels of risk tolerance. Furthermore, even within a company, each department may interpret the strategic goals uniquely for their organization. Hence, “value” is not clear cut or simple to define. Any organization that manages a portfolio of projects needs to define and communicate what kinds of project work is of highest value. The next slide highlights the portfolio management lifecycle in relation to value.

The tool for assessing project value is a scoring model, which includes the criteria in the model, the weight (importance) of each criterion, and a way of assessing a low, medium, or high score for each criterion in the model. A good scoring model will align the governance team on the highest value work and measure the risk and value of the portfolio. A poor scoring model will not adequately differentiate projects and can give the governance team a false precision in measuring project value. Chapter two will focus on developing the scoring model. Chapter three will address the process of using the scoring model to assess project value.

In the context of the portfolio lifecycle, assessing project value is particularly important in the first two phases: Define the Portfolio and Optimize Portfolio Value. When evaluating new projects for inclusion in the portfolio, the governance team must understand the relative value of the proposed project in relation to the rest of the projects in the portfolio; this will help inform the governance team’s decision to approve, deny, or postpone the project. Once there is an established portfolio, the same value scores can be used to prioritize work within the portfolio.

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Project Prioritization with Purpose

  1. 1. Prioritization With Purpose Make Smarter Decisions and Achieve Results ACUITY PPM
  2. 2. 2 Table of Contents Overview of Prioritization A summary of project portfolio management and how a value assessment supports prioritization Prioritize Your Criteria The key steps for prioritizing criteria in order to build the scoring model Prioritize Your Projects The steps to properly evaluate and score projects in order to prioritize the work in the portfolio. Communicate and Allocate Key considerations for communication priorities and allocating resources to the most import work
  3. 3. CHAPTER An Overview of Prioritization Portfolio management is about delivering maximum organizational value through programs and projects. How value is assessed determines what work is selected, how it is prioritized, and where resources are allocated.
  4. 4. 4 Portfolio management is about maximizing organizational value delivery through programs and projects. In order to maximize value delivery, the governance teams that approve work and prioritize projects need to share a common view of “value” in order to select the most valuable work and assign the right resources to that work. Understanding the relative “value” of each program and project in the portfolio is at the heart of portfolio management and determines what work is selected, how it is prioritized, where resources are allocated, etc. In order to select a winning portfolio, every governance team needs to share a common understanding of value; without it, you’ll fail to realize the full potential of your portfolio. However, the definition of “value” will differ at every company because every company has different strategic goals, places varying emphasis on financial metrics, and has different levels of risk tolerance. Furthermore, even within a company, each department may interpret the strategic goals uniquely for their organization. Hence, “value” is not clear cut or simple to define. Any organization that manages a portfolio of projects needs to define and communicate what kinds of project work is of highest value. The next slide highlights the portfolio management lifecycle in relation to value. Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview
  5. 5. 5 At the highest level, Project Portfolio Management has four basic components: Processes to define portfolio parameters and select projects that align with strategic objectives Define the Portfolio All the steps necessary to construct an optimal portfolio given current limitations and constraints Optimize Portfolio Value Ensure value is delivered by comparing expected benefits with actual benefits; drive PPM maturity Deliver Portfolio Value The Goal: Maximize value delivered to customers and stakeholders Project benefits must be protected in order to deliver maximum portfolio value Protect Portfolio Value THE PORTFOLIO MANAGEMENT LIFECYCLE
  6. 6. 6 The tool for assessing project value is a scoring model, which includes the criteria in the model, the weight (importance) of each criterion, and a way of assessing a low, medium, or high score for each criterion in the model. A good scoring model will align the governance team on the highest value work and measure the risk and value of the portfolio. A poor scoring model will not adequately differentiate projects and can give the governance team a false precision in measuring project value. Chapter two will focus on developing the scoring model. Chapter three will address the process of using the scoring model to assess project value. In the context of the portfolio lifecycle, assessing project value is particularly important in the first two phases: Define the Portfolio and Optimize Portfolio Value. When evaluating new projects for inclusion in the portfolio, the governance team must understand the relative value of the proposed project in relation to the rest of the projects in the portfolio; this will help inform the governance team’s decision to approve, deny, or postpone the project. Once there is an established portfolio, the same value scores can be used to prioritize work within the portfolio. Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview
  7. 7. Priorities create a ‘true north’ which establishes a common understanding of what is important. Without a clear and shared picture of what matters most, lower-value projects can move forward at the expense of high-value projects. -Gaylord Wahl (Point B Consulting)
  8. 8. 8 For many organizations, the process of selecting projects and prioritizing projects is merged together to develop a rank order list of projects where the governance team “draws the line” where budget or resources run out is an acceptable way to define the portfolio. Unfortunately, this approach does not result in an optimal portfolio, but is acceptable for lower maturity organizations. Strictly speaking, we should distinguish portfolio selection from project prioritization and for the purposes of this paper we will focus strictly on using the scoring model for prioritization. Gaylord Wahl of Point B Consulting says that priorities create a ‘true north’ which establishes a common understanding of what is important. Without a clear and shared picture of what matters most, lower-value projects can move forward at the expense of high-value projects. Even though experienced leaders understand the need to focus on a select group of projects, in practice it becomes very difficult. Good companies violate the principal of focus ALL THE TIME and frequently try to squeeze in “just one more project.” OPTIMIZE Portfolio Value DEFINE the Portfolio SCORING MODEL Assess value to select the right projects Prioritize projects in the portfolio Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview
  9. 9. 9 RESOURCEPRIORITY RESOURCES ASSIGNED TO HIGHER PRIORITY WORK SCHEDULE PRIORITY RESOURCES ASSIGNED NOW RESOURCES ASSIGNED LATER Higher likelihood of success due to adequate staffing Lower likelihood of success due to greater resource contentions Low likelihood of success due to uncertain resource assignments RESOURCES ASSIGNED TO LOWER PRIORITY WORK Having the right human resources available to do project work is a critical success factor. High priority projects have a higher likelihood of success due to adequate staffing. Lower priority projects may face more resource contention and have a higher risk of project delays due to inadequate resource time. Lower priority projects that get pushed out into the future have an even lower likelihood of success since these projects face challenges around project initiation and higher resource contention. Furthermore, when resources are not available to staff all of the approved projects, lower priority projects should be started later once enough resources are freed up to begin the work. However, not all projects can be initiated immediately. Understanding relative priorities can help direct the timing and sequencing of projects. In some cases, high priority projects may have other dependencies or resource constraints that require a start date in the future. In other cases, lower priority projects get pushed out into the future. In both cases, schedule priority helps answer the question “when can we start project work?” Remember, prioritization is about focus—WHERE to assign resources and WHEN to start the work. FIGURE 1: Resource Priority and Schedule Priority Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview
  10. 10. 10 Prioritization is about focus—where to assign resources and when to start the work. It enables the governance team to navigate critical resource constraints and make the best use of company resources. Higher priority projects need the best resources available to complete the work on time and on quality. Resources that work on multiple projects need to understand where to focus their time. When competing demands require individuals to make choices about where to spend their time, the relative priorities need to be obvious so that high-value work is not slowed down due to resources working on lower-value work. You have to be sure that your most important people are working on the most important projects so that you can get the most important work done within existing capacity constraints. Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview
  11. 11. CHAPTER Prioritize Your Criteria First In order to properly evaluate the value of each project, your scoring model needs to include the right criteria. The governance team also needs to be calibrated to have a common view of project value.
  12. 12. 12 Assessing project value is at the heart of portfolio management, and the scoring model is the tool to help assess value. Therefore, building a good scoring model is integral to prioritizing work. In fact, as we will see, prioritizing the criteria in the scoring model is a major component of the prioritization exercise. The first step in building the scoring model is to identify and define the criteria in the model. In the past, expected financial benefits would be a singular way of measuring project value. Although this is a tangible and quantitative way to measure value, experience shows that merely selecting and prioritizing work based on financial benefits fails to yield optimal strategic results. In high performing organizations, value can include intangible (qualitative) factors such as the degree of strategic accomplishment, customer impact, and organizational benefits. Therefore, we recommend a combination of quantitative and qualitative criteria such as: strategic alignment, financial benefit, and risk. 1. Strategic Criteria: Portfolio management is focused on strategic execution, so measuring strategic alignment as part of your scoring model is important. This would include your organization’s strategic objectives. 2. Financial Criteria: companies should incorporate financial benefit into the scoring model such as net present value (NPV), return on investment (ROI), payback, earnings before interest and taxes (EBIT), etc. 3. Risk Criteria: Finally, a good scoring model takes into account the risk factors of the project. These are not individual projects risks, but a measure of the “riskiness” of the project. Just like a stock portfolio, each investment carries a different level of risk, and these evaluations will help understand portfolio risk. STEP 1 – Define the Scoring Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 2 Prioritize Your Criteria Chapter 1 Overview
  13. 13. 13 These three scoring categories of strategic alignment, financial benefit, and risk represent the highest tier of scoring criteria (what we will refer to as “tier 1” criteria). Within each of these categories are the sub-criteria that will actually be used to evaluate projects (referred to as “tier 2” criteria). Why are two tiers of criteria needed? Let’s look at the strategic category. Some organizations simply want to evaluate the degree of strategic alignment, but since nearly all organizations have two or more strategic objectives, for the purposes of assessing project value, you should evaluate the degree of alignment across all of your strategic objectives. Projects that positively impact multiple strategic objectives are generally more valuable. In addition, having a discrete understanding of which strategic objectives each project supports will further enable the governance team to prioritize work. Each strategic objective is a sub-criterion (tier 2) used to assess project value. The three recommended scoring model categories are defined below. STEP 1 (Cont.) STRATEGIC FINANCIAL RISKINESS Strategic Objective #1 Financial Criteria #1 Risk Factor #1 Strategic Objective #2 Financial Criteria #2 Risk Factor #2 Strategic Objective #3 Financial Criteria #3 Risk Factor #3 TIER 1 CRITERIA TIER 2 CRITERIA Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 2 Prioritize Your Criteria Chapter 1 Overview
  14. 14. 14 The second step is to prioritize the criteria from step 1. This is best done using pair-wise evaluations, a simple method of comparing two criteria against each other (also known as the Analytic Hierarchy Process, or AHP). This is easily accomplished in one on one sessions with each decision maker. This evaluation is perhaps the most important step in the entire process because it will not only determine the weighting of your scoring model, but even more it will test and ultimately align the governance team’s understanding of the organizational strategies. For example, when evaluating strategic criteria, the governance team will be asked to compare strategic objective 1 against strategy objective 2. On paper, everyone probably understands why each strategic objective is important but has probably not considered the relative importance of one strategic objective compared to another. Using AHP will force each person to really consider whether the two strategic objectives are equally important or whether one is truly more important than another (when making comparisons using AHP, a criterion can be equal to, twice as important, three times as important, four times as important, etc. to the other criterion). In the example below, Decision Maker #1 believes that strategic objective #1 is three times more important than strategic objective #2. STEP 2 – Conduct Pair-wise Comparisons STRATEGIC OBJECTIVE #1 EQUAL STRATEGIC OBJECTIVE #2 4 3 2 1 2 3 4 Decision Maker 1 Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 2 Prioritize Your Criteria Chapter 1 Overview
  15. 15. 15 The third step is to review the evaluations as a team. This exercise really highlights what is most important to each member of the governance team and affords a way for the governance team to have a common understanding of value. It is necessary to highlight where the biggest gaps are between the members of the governance team and discuss why each person holds their view. In this discussion, no one’s evaluation is right or wrong, but in the discussions as a governance team new information may come to light that helps everyone align to a common understanding of each strategic objective, financial criteria, and risk criteria. Based on experience, the strategic alignment discussion is of critical importance and can surface divergent views that would never have come to light without the pair-wise exercise. Without going through this exercise, it is impossible to determine if the scoring model truly represents the governance team’s understanding of value. An example of a single comparison is shown below. In this example Decision Makers 1 and 2 believe that the first strategic objective is three times as important as the second objective. However, Decision Makers 3 and 4 believe that the second objective is four times and two times as important respectively. This governance team needs to come back together to discuss the discrepancies. The true benefit of this exercise is in the discussion that helps align the team to a common view of strategic value. STRATEGIC OBJECTIVE #1 EQUAL STRATEGIC OBJECTIVE #2 4 3 2 1 2 3 4 Decision Maker 1 Decision Maker 2 Decision Maker 3 Decision Maker 4 STEP 3 – Review and Validate Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 2 Prioritize Your Criteria Chapter 1 Overview
  16. 16. 16 WARNING: It is tempting to skip these steps by arbitrarily picking scoring weights in order to quickly score and prioritize projects. One large company wasted hours in weekly steering committee meeting debating the weighting of each criterion. In the end, the excessive discussion wore down the committee; it did not produce the right discussion. Rather, focus on the relative value of each criterion compared to other criteria; the weighting will be a mathematical output of the pair-wise comparisons. Additionally, if the governance team does not share a common understanding of value, the benefits of going through any prioritization exercise are greatly diminished and can cause more churn in the long-run. Based on experience with Fortune 500 companies, the pair-wise discussions are not only more effective but also more efficient (a single person can complete their evaluations in 15 minutes). The benefit is in the discussion among the governance team members to align on the criteria for evaluating project value. Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 2 Prioritize Your Criteria Chapter 1 Overview
  17. 17. 17 By this point, the result of prioritizing the criteria is: • A governance team that has been calibrated around how to define value • A scoring model with criteria and weighting that has been validated by the governance team and can be accurately used to assess project value. The simple example below shows what the weighting could look like after prioritizing the criteria. STRATEGIC (represents 49% of the weighting) FINANCIAL (represents 31% of the weighting) RISKINESS (represents 10% of the weighting) Strategic Objective #1 Weighting = 22% Financial Criterion #1 Weighting = 16% Risk Factor #1 Weighting = 5% Strategic Objective #2 Weighting = 18% Financial Criterion #2 Weighting = 8% Risk Factor #2 Weighting = 3% Strategic Objective #3 Weighting = 9% Financial Criterion #3 Weighting = 7% Risk Factor #3 Weighting = 2% EXAMPLE Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Allocate Resources Chapter 2 Prioritize Your Criteria Chapter 1 Overview
  18. 18. CHAPTER Prioritize Your Projects In this chapter we will cover the steps to properly evaluate projects and score them in order to prioritize the work in the portfolio.
  19. 19. 19 Step 4 – determine scoring values The last part of the scoring model is to determine the scoring values. For each criterion in the scoring model, there needs to be some evaluation of a low, medium, or high score to drive a numerical score for that criterion. In practice we can expand this to “none”, “low”, “medium”, and “high” to give the decision makers a slightly wider range of options. We do not want too many options as this can slow down the scoring process, but we want enough options to help distinguish project evaluations. A common scoring paradigm would include 0 for none, 1 for low, 2 for medium, and 4 for high. If companies want to put even more emphasis on high value, they could use a 0, 1, 3, 9 scoring paradigm. In the example below, each of the four qualitative values has a corresponding quantitative value. For each value, there is a definition to help determine to which value the project best aligns. If the governance team determined that a particular project has a medium alignment to strategic objective #1, it would score a 2. We will explore all of the calculations at the end of this chapter. 0 1 2 4 NONE LOW MEDIUM HIGH STRATEGIC OBJECTIVE #1 Little to no contribution to accomplishing this strategic objective Minor contribution to accomplishing this strategic objective Moderate contribution to accomplishing this strategic objective Significant contribution to accomplishing this strategic objective Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview Chapter 3 Prioritize Your Projects
  20. 20. 20 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Chapter 5 Allocate Resources Chapter 6 Outputs 0 1 2 4 NONE LOW MEDIUM HIGH REDUCE LEGACY IT SYSTEM COSTS Does not reduce system costs Project reduces system maintenance costs Project enables system retirement Project decommissions at least one system The definitions alone can significantly improve the quality of the project scores. The example below is relatively generic and requires the governance team to possess enough knowledge about the project and the strategic objective to properly determine the degree of strategic alignment. This can be problematic if the governance team “feels” that a given project has moderate to high alignment and therefore warrants a higher score. The scoring process is intended to make the prioritization process as objective as possible. This can be accomplished by more specifically defining the underlying criteria of “none”, “low”, “medium”, and “high”. In example #2, an IT department of a large Fortune 500 firm has a specific strategic objective to reduce the number of legacy computing systems. The criteria for each of the four options is far clearer with little need for interpretation. If the project actually decommissions a system, it scores “high”. As companies mature their evaluation process, the specific criteria for none through high can be enhanced. Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 3 Prioritize Your Projects Chapter 1 Overview
  21. 21. 21 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Chapter 5 Allocate Resources Chapter 6 Outputs 4 2 1 0 LOW MEDIUM HIGH VERY HIGH TECHNICAL RISK Solution is straight forward, conforms to our technology and architecture standards Technology commonly understood, and conforms to architectural standard with minor variations. Solution does not conform to our architectural standards; moderately challenging, but doable. Solution does not conform to our architectural standards and requires significant changes for which we have little to no experience. For the riskiness evaluations, we need to flip the quantitative values so that the highest number corresponds to the lowest risk qualitative value. By doing so, we are giving more value to less risky projects. This makes sense especially if we have two projects which may be nearly identical in value but one is far riskier than the other; under normal circumstances if we could only choose one over the other we should choose the less risky option (i.e. better risk-adjusted value). For financial evaluations, it is important to set financial thresholds that will really set the winners apart. If the bar is set too low, too many projects will get “high” scores and the scoring model won’t be of much help to distinguish the highest value work. Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview Chapter 3 Prioritize Your Projects
  22. 22. 22Step 5 – collect all necessary information In order to evaluate projects or new proposals, some amount of information is needed to understand the scope, importance, alignment, cost, benefit, and risks of the project. Based on the actual scoring model you built and your current organizational processes, you may need to collect new information. Let’s break it out in further detail. • Strategic information: during the intake/proposal phase, the project initiator should have provided some rationale for how the proposed project aligns with one or more strategic objectives. Simply stating that alignment exists is not useful; there should be an explanation of how the project supports the organization’s strategic objectives. This information should be captured in a document for each governance team member to review. If most current projects are missing this information, the Project Management Office (or other team facilitating the prioritization process) should update organizational processes to include this information going forward. • Financial information: having consistent financial information for all projects is a common challenge many organizations, but working with the Finance department to analyze financial benefits is a best practice. This will lead to consistent financial information across the portfolio. Alternatively, a spreadsheet template can be shared with each project team to help calculate financial benefits. • Riskiness information: sufficient information about the inherent riskiness of the project is necessary for conducting this evaluation. This assessment is not about the specific project risks, but about the inherent risk nature of the project. Answering questions such as: “how much organizational disruption will this project cause?” “How much experience do we have with this type of project?” “Do we have a sufficient skill set internally to deliver this project?” will help evaluate project riskiness. Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Projects Chapter 4 Communicate Priorities Chapter 5 Allocate Resources Chapter 6 Outputs Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview Chapter 3 Prioritize Your Projects
  23. 23. “Things which matter most must never be at the mercy of things which matter least.”
  24. 24. 24 Step 6 – Educate Everyone involved with evaluating and scoring projects must understand the relevant details of all projects in the portfolio. If your scoring model includes a strategic component, financial component, and riskiness component, we recommend the following roles for scoring projects: • Strategy: The Governance Team, representing the senior leaders of the organization is best equipped to evaluate the strategic value of each project. • Financials: this is easily derived from the financial analysis and no additional evaluation is needed. A Portfolio Analyst or PMO Administrator should be available to compile this information and capture it in a single data repository. • Riskiness: The Project Manager or PMO Director will be in the best position to evaluate the riskiness of a project. The PMO Director could be the singular person to evaluate riskiness across all projects in the portfolio, which streamlines this evaluation. Alternatively, each Project Manager could evaluate and score individual and share the results with the Portfolio Analyst or PMO Administrator. A group of Project Managers could come together and work together to score their projects as individual Project Managers may interpret criteria a little differently. Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview Chapter 3 Prioritize Your Projects
  25. 25. 25 Step 6 – Educate (cont.) In most cases, this requires a certain level of education so each project is fairly evaluated. This is not a small effort. Although the Governance Team may be sponsoring some of the current projects in the portfolio, they won’t be familiar with all of them. That will affect the team’s ability to evaluate and score the projects. Therefore, some level of education is needed to bring everyone up to speed. There are a few ways to accomplish this: 1. Prepare summary information of each project for the Governance Team to read on their own before the meeting (examples include: business case, charter, etc.). The advantage of this approach is to expedite the scoring exercise. 2. Prepare summary information of each project for the Governance Team to review during the meeting. Using this approach, the Governance Team would likely review a batch of projects and score them in the same session. The advantage of using this approach is that everyone will have dedicated time to review project information and discuss as a group. This option also takes longer than option 1. 3. Conduct mini project reviews in a team meeting with the Project Managers in attendance to present and answer questions. The advantage of this approach is that it gives the Governance Team an opportunity to ask important follow-up questions as well as get to know the Project Managers better. This option takes longer than the previous two options. Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview Chapter 3 Prioritize Your Projects
  26. 26. 26Step 7 – Evaluate and Score Tips for handling the evaluation and scoring: • Pilot the scoring with a handful of projects: pick a few representative projects (projects known to be high priority and lower priority, across various strategic objectives) • Conduct the pilot with the governance team in person: even after prioritizing criteria and discussing it as a team, there will still be questions about specific projects and how they align to the strategic objectives. • Build in adequate time for discussion: there will be different degrees of understanding of the projects and some projects will require more discussion than others. The value is in the discussion, so build in adequate time for discussion so participants do not feel rushed. • After the pilot, get agreement on how the governance team wants to finish scoring projects. Some teams will want to continue scoring as a group; others may want to do their scoring in advance and come prepared to discuss. • Take time to review and validate consistency of scores: some governance team members may be surprised about the scores of certain projects. It is not unusual for some medium and high scoring to be inconsistently applied. The group may have determined that a project was a “high” in one case but after review, it should really be a “medium” or vice versa. Chapter 2 Prioritize Your Criteria Chapter 4 Communicate Priorities Allocate Resources Chapter 1 Overview Chapter 3 Prioritize Your Projects
  27. 27. CHAPTER Communicate And Allocate Strong communication is a critical success factor for ensuring that the entire organization understands and works to the priorities established by the governance team.
  28. 28. 28 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Your Projects Chapter 1 Overview Chapter 4 Communicate Priorities Allocate Resources The previous two chapters have covered the building and application of a scoring model to prioritize projects. It is very significant for an organization to purposefully build and use a scoring model to prioritize work because it aligns the governance team around a common understanding of value. Too many organizations rely on gut instinct or informed intuition when making project investment decisions, but a scoring model greatly enhances strategic decision making. Once the governance team has finished assessing and scoring projects there should be a clearer understanding of the most important projects and why. This progress alone is quite valuable to the governance team. This chapter however, is focused on expanding that progress to encompass the entire company or organization. While it is good and necessary for the governance team to understand the project priorities, the rest of the organization needs to know as well in order to understand decision making rationale, be aligned with the governance team, and then focus time and energy on the highest priority work. The first item that needs to be communicated is not the rank order list of projects, but rather the process for prioritizing the work. Taking the time to share the scoring model with the organization and educate everyone on how it was produced and how it is being used will go a long way to getting buy-in and trust from employees. It also demonstrates that a sound and rationale approach is being used to prioritize work. It is imperative that the organization be brought along on the journey to understand how the governance team arrived at the scoring model. Prioritizing the criteria in the model is not merely to generate the scoring weights, but all the more it clearly communicates the relative importance of each strategic objective. This too needs to be clearly communicated with the organization. Communication
  29. 29. 29 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Your Projects Chapter 1 Overview Chapter 4 Communicate Priorities Allocate Resources Moreover, in order for this communication to be most effective, each member of the governance team needs to be a “Chief Reminding Officer”. Patrick Lencioni in his classic The Advantage discusses the importance of communication and priorities: “Unfortunately, most leaders I’ve worked with are hesitant to repeat themselves. Leaders walk away from an annual all-hands meeting and think they’ve done their job of communicating by giving a speech outlining the organization’s strategy or priorities. And they think they’ve been especially thorough when they announce that the slides for the presentation can be found on the company’s intranet. But then they seem surprised when they learn, a few weeks later, that employees aren’t acting on what they were told and that most of those employees can’t even repeat the organization’s new strategy accurately. The problem is that leaders confuse the mere transfer of information to an audience with the audience’s ability to understand, internalize, and embrace the message that is being communicated. The only way for people to embrace a message is to hear it over a period of time, in a variety of different situations, and preferably from different people. That’s why great leaders see themselves as Chief Reminding Officers as much as anything else. Their top two priorities are to set the direction of the organization and then to ensure that people are reminded on a regular basis.” Patrick Lencioni (2012). “The Advantage: Why Organizational Health Trumps Everything Else In Business”, pp. 142-143, John Wiley & Sons
  30. 30. If you could get all the people in an organization rowing in the same direction, you could dominate any industry, in any market, against any competition, at any time. - Patrick Lencioni
  31. 31. 31 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Your Projects Chapter 1 Overview Chapter 4 Communicate Priorities Allocate Resources Ongoing and consistent communication about organizational priorities is a critical success factor for making portfolio management work. It aligns the organization and will cause everyone to “row in the same direction”. As was stated, communicating at events such as all-hands meetings are necessary but not sufficient. Other venues include: • Roadshows: an extremely effective approach is to conduct a roadshow to visit every manager’s staff meeting. A senior leader and/or a key representative from the PMO can lead these roadshow meetings to get into more details around portfolio management, the intake process, the prioritization process, etc. This gives individuals an opportunity to ask questions that couldn’t have been asked in an all-hands meeting. This is also a great way for leadership to get feedback on how the organization is responding as well as address gaps that have surfaced. • Staff meetings: ongoing communication is needed and the recurring staff meetings are a great place for managers to share details of the current project priorities. • Newsletters: don’t underestimate the value of a periodic newsletter to the organization. This push communication can be very effective for providing updates on priorities and project performance. Even if people do not read each newsletter, they know where to go to get current information. • Project managers’ meetings: ongoing meetings with the project managers is a great way to discuss priorities and how it affects resource allocation and work timing to minimize disruptions to projects.
  32. 32. 32 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Your Projects Chapter 1 Overview Chapter 4 Communicate Priorities Allocate Resources People are the most important asset for getting project work done. Allocating the right people to the right projects at the right amount of time is a critical project success factor. Prioritization is for resource allocation. The prioritized list of projects informs where people need to focus their time and energy. The governance team can use the prioritized list to effectively allocate key resources to selected projects. By understanding the “true north” of the portfolio, resources can be placed where they are needed to accomplish the most important goals of the organization. This will reduce confusion among resources regarding what work they should perform. This is why the communication from the previous section is so important so that everyone is educate and affirm what is most important to the organization so that people. Resource allocation takes place at two levels: the governance team and resource managers. In many companies there is a small set of subject matter experts (SMEs) that are in high demand and whose time is gravely needed to move projects forward. In these cases, the governance team should have enough visibility into their work to be able to direct where they spend their time. For all other team members, the resource managers determine which people will be assigned to projects. Once people are allocated to projects, the individuals themselves still need to manage their time, especially if they are assigned to multiple projects. You don’t want people determining their own priorities. Although project work should be planned well enough in advance so as to minimize resource conflicts, resource contention is a reality and team members must understand both the priorities and the latitude they have for working across multiple projects. When the governance team has done their job of over-communication strategic priorities and project priorities, the Project Manager’s job is made much easier. Resource Allocation
  33. 33. 33 Chapter 2 Prioritize Your Criteria Chapter 3 Prioritize Your Projects Chapter 1 Overview Chapter 4 Communicate Priorities Allocate Resources • The governance team prioritizes strategic objectives (in the course of building the scoring model). • The governance team evaluates projects in order to prioritize all the work in the portfolio. • Based on the rankings, the governance team helps allocate a small set of critical resources (SMEs). • For all remaining project team members, the respective resource managers will determine assignments based on priorities and availability. • At the individual contributor level, each person manages their work according to the organizational priorities, especially when there is resource contention between projects. Summary
  34. 34. 34 Sources Lencioni, Patrick M. (2010). “The Five Dysfunctions of a Team: A Leadership Fable”, p.9, John Wiley & Sons Lencioni, Patrick (2012). “The Advantage: Why Organizational Health Trumps Everything Else In Business”, pp. 142-143, John Wiley & Sons Wahl, Gaylord. “Prioritizing Your Project Portfolio: Focusing Your Company on What Matters Most”. Point B. February 7, 2007.
  35. 35. 35 @acuityppm info@acuityppm.com www.acuityppm.com TO LEARN MORE ABOUT HOW TO BUILD A GREAT SCORING MODEL OR ABOUT ACUITY PPM SOFTWARE CONTACT US:
  36. 36. 36 Thank You

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