Very few organizations have the luxury of committing to a range of projects without having an effective way of prioritizing these. One could argue that this issue is more likely to be experienced by organizations that are relatively immature in their operational excellence or strategy execution journey. We’re not necessarily finding that. As companies continue to look to cut waste, improve efficiencies and improve the effectiveness of their strategy processes, project prioritization has become a hot topic.

1. Project Prioritization Becomes More Strategic
Very few organizations have the luxury of
committing to a range of projects without
having an effective way of prioritizing
these. One could argue that this issue is
more likely to be experienced by
organizations that are relatively immature
in their operational excellence or strategy
execution journey. We’re not necessarily
finding that. As companies continue to
look to cut waste, improve efficiencies
and improve the effectiveness of their
strategy processes, project prioritization
has become a hot topic.
Last year, i-nexus conducted a Strategy Deployment Maturity assessment. One of the survey
questions had to do with the way in which goals and projects are being prioritized. Here are the
options available with summarized results.
Level 1. Aside from major strategic initiatives, project prioritization is largely driven
by local management agendas
18.75%
Level 2. Aside from major strategic initiatives, project prioritization is largely carried
out by prioritization of project ideas against predefined criteria (typically using a
weighted evaluation matrix).
In addition to feasibility and resources, these criteria will often include alignment with
strategic objectives, but this will typically be subjectively evaluated.
31.25%
Level 3. Project identification is increasingly driven from a more strategic review of
actual business performance vs. expected performance.
 In addition to the major strategic initiatives, there is on-going attempt to align the
operational improvement projects with the annual performance improvement goals
identified in the goal cascade.
 Process based diagnostic tools such as Value-Stream Mapping are used to pinpoint
improvement opportunities and the potential impact of these opportunities on the
KPIs that track achievement of the strategic/operational goals is considered during
project prioritization.
43.75%
Level 4. On-going project prioritization is an integral part of the hoshin cascade and
periodic operational review meetings. See Infographic Hoshin 6 Stages
 The derivation and chartering of projects is driven through the Hoshin Kanri
process through the development of A3′s for each goal and ultimately each project.
 The chartering of projects includes specifically identifying the impact that the
project will have on the KPIs that track achievement of the goal and identifying the
resource implications of the projects such that the portfolio of projects can be
optimized to maximize the impact of goals and fit within the available resources
allocated through the Hoshin Kanri deployment process.
 A distinction is clearly made in project prioritization between the actions plans to
realize objectives (developed through A3 thinking) and the
actions/countermeasures that need to be implemented to bring performance back
6.25%

2. on track based on PDCA analysis of problems that occur during implementation of
the action plans.
Essentially, the challenge in
prioritization is to make the
right decisions for project
investments with regards
budget and resource
allocation, based on the value
that they will contribute to the
business. In all cases where a
company has a business
strategy in place (which one
would hope would always be
the case), the value to the
business will be best measured
based on a projects alignment
with and support for the
business strategy and
objectives.
This is supported in the survey results above where level 3, in which the majority of respondents felt
their organizations was placed at the time, included prioritization based on alignment to a strategic
review and measurement of actual business performance vs. expected performance.
While only 6% of respondents felt their organization
was in the 4th level, this is not surprising given that,
although Hoshin planning is being implemented in
many areas, we’re still a little time away from a large
number of case studies and the accumulation of
widespread experience in the area.
Effective project prioritization therefore requires the
establishment of a governance structure to ensure
adherence to an agreed policy and process for
prioritization. Here are some useful tips in this regard:
 A prioritization matrix is often the best tool to
use to rank projects. While most organizations
will choose different criteria within their
prioritization matrix, the alignment with the
strategy and demonstrated impact on the
achievement of strategic objectives are the most critical factors for project selection.
 A prioritization matrix does help to take some of the emotion out of the process. It also
provides a consistency in related decision making that should become respected – if not
immediately, then over time. This is particularly so as the criteria used should provide
significant input into the measures and metrics to be used to determine the project’s
success, hence the need to align to strategic business objectives from as early In the process
as possible.

3.  It’s important to realize that the filtering process should start as early as the idea generation
for projects. Even at this early stage, ideas need to be filtered and evaluated by a clear set of
criteria so that those that are not going to have sufficient impact on the business success will
never come to life.
 Of course, project prioritization also
means that tough decisions have to be
made. This might include closing down a
high profile project if it is not delivering or
no longer directly supports the strategy.
But the sooner this is highlighted and
management can take informed decisions
in this regard, the better.
 In practice the process often filters in
increments. A large number of prospective
projects can be quickly excluded based on
the agreed criteria. This provides sufficient
time and focus for the evaluating team to
then discuss the remaining contenders in greater depth and to take a deeper dive into the
benefits and resources required.
The i-nexus Strategy Execution software solution fully supports complex organizations through
project prioritization process including use of the prioritization matrix. This includes from the outset,
enabling staff anywhere in organizations to generate, capture and evaluate ideas for improvement
projects and after successful evaluation and prioritization, ideas can be simply promoted into
projects in i-nexus. It would also
include access to a full suite of
program governance reporting,
delivering personalized, fully
drillable reporting to the in-boxes of
all key executive and management
stakeholders.
Watch this demo for an oveview.
These features are some of the
reasons for the growing demand by
successful businesses for the
solution and growing recognition of
i-nexus, including as a Gartner 2014
Cool Vendor in Business Process
Management.
Most importantly, i-nexus also ensures that a holistic view of projects across
the organization is possible. In so doing, the solution clearly shows standard
performance indicators aligned to strategic breakthrough objectives, enabling
a common framework for communicating progress and the need for action,
which could include the prioritization or reprioritization of projects. This
ensures that the relevant information and tools are available for the company
to strategically plan, prioritize and manage company-wide execution
processes. This could include through use of an effective EPMO or strategic

4. PMO, taking into consideration the available capacity and capital across the organization and how
this aligns to achievement of overall strategic business objectives and goals. See also our latest blog
on The Role of the PMO in Strategy Execution
The i-nexus strategy execution suite includes market leading Hoshin features and implementation
tools and we take pride in implementing our software quickly and professionally to support our
client’s strategy execution success. See i-nexus.com/watch-hoshin-demo and request a callback if
our solution could support your success.
I welcome your feedback and comments
Paul Docherty, i-nexus Founder & Executive Director
Let's Connect on LinkedIn
e-mail: paul.docherty@i-nexus.com
i-nexus