Prioritizing work starts with a strategy. Strategy can be determined in many different ways but it's important that senior management is able to clearly articulate its strategy and determine some 'knock-out' criteria to quickly eliminate things that do not or will not contribute to the overall strategy. For instance, quickly eliminating a product or service, either current or in development, that contributes less than 5% of revenue, will get rid of a lot of distractions and waste and allow the business to focus on prioritizing really valuable work within its available capacity.
Prioritization itself is about ensuring we are clear about the value each piece of work or initiative will deliver so that we can allocate our limited resources appropriately. To effectively prioritize, we need to create, as much as possible, an objective view of what is important to the customer and the business and we do this by defining a set of value criteria and a common taxonomy or language. Accepting our limited resources as constraints, it is this set of value criteria and common language that allows us to make a balanced comparison between initiatives.
The following process works best when it's a regular, iterative activity. It needs to become a part of an organization's core operating rhythm. Early iterations will uncover wasteful, non-value work while later iterations will streamline the process of comparison and prioritization. As the process matures, the organization will become more adept at devising truly valuable initiatives (the consideration of value will gradually shift to be considered earlier in the process) and prioritization will be more about ordering initiatives rather than filtering.
A lightweight approach to governance is required to ensure the process delivers the desired outcomes and that ego, personal gain and politics are left at the door. Senior management is expected to own the strategy and value criteria and has the responsibility to challenge the projected efficacy of initiatives to deliver the strategy. General management and their leadership teams are expected to own the initiatives (along with their feasibility, capacity and capability to deliver) and have the responsibility to determine the priority order of work. Early iterations can benefit from an impartial facilitator but the expectation is that the process becomes self-managing as it matures.
Value criteria (and the associated ranking scale) creates a common, qualitative, and importantly, a more objective language of value across the organization. By defining the value criteria and a qualitative scoring system (the calculator), initiatives can be quickly compared with each other. Examples of value criteria include customer value, business value, technology investment, and risk mitigation.
This runs contrary to traditional models of setting financial targets and then identifying activities to meet the targets. By defining value outcomes, initiatives are evaluated for their contribution of value. The impact on the bottom line becomes a secondary outcome of the work. Further, by allocating a number of inward-facing and outward-facing objectives, a balance can be struck between growing and strengthening, diversifying and consolidating.
It is possible to employ weightings to emphasise certain desired outcomes over the work planning period. However, one must be cautious of introducing confirmation bias. The weightings should be kept small to adjust focus (perhaps fractional values) and avoid swamping the influence of the value criteria. The value criteria with qualitative descriptions should be the primary method of prioritization and it is preferable to adjust and improve these rather than apply weighting factors to fix a poor scale.
Select the best qualitative description of the value created by the initiative and use the calculator to generate an initial stack-rank score. ‘Stack-rank’ simply means to organise the initiatives, physically as cards on a wall or virtually in some digital format, in order of their stack-rank scores.
Early attempts to evaluate initiatives may uncover the need to provide better quality information about each initiative. But this doesn't mean that a full business case is needed. Often a 'rapid discovery' can be used to determine minimum information on an A3 canvas. Typically the minimum information required to allow for a balanced comparison between initiatives is:
Armed with the information above, it is easier to compare initiatives based on their relative value to the customer and/or the business. The “what happens if we do nothing” piece of information is particularly useful in the conversations in the next step.
The initial stack-rank is used to create a quick priority order. The most important part of the prioritization process is the review - through conversation and debate - and adjustment of the order according to exceptions or other reasoning. As the order is adjusted, be sure to capture the assumptions made along the way as history of the decisions.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.