Posts Tagged ‘Prioritization’

PostHeaderIcon Connecting Strategy and Tactics

The great Chinese military strategist Sun Tzu had it pretty much spot on:

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

Having a great strategy isn’t worth a whole lot to anyone unless it’s backed up by solid tactical execution capability – which means project management.  And no matter how good the project managers are, individual excellence in project planning and control won’t overcome cross-project resource overallocations and poor outcomes if projects are not strategically aligned and properly prioritized. The trick therefore is to unite the two in a strategic implementation framework.

The Missing Link

Properly connecting strategy and tactics involves the disciplines of portfolio and program management. This crucial linkage – often missing or incomplete – bridges the gap between the promise of strategy and the actuality of operational results. Portfolio management, most importantly, establishes executive oversight for project selection, project prioritization (see Project Prioritization Criteria), funding and resource allocation (see The Goals of Portfolio Management). Program management provides the governance and architecture for defining, planning and controlling broad strategic initiatives comprised of interdependent projects (see Project or Program).

Important Questions

The hard part of course is putting this all into practice. A few fundamental questions can help maintain the right focus; for example:

  • Do we know how strongly each declared strategy is supported by our current projects?
  • Do we believe we have the optimal mix of projects to fulfill our strategy – taking account of various business needs, execution constraints and operational imperatives?
  • Do our strategic programs clearly lay out the relationship between objectives, projects, deliverables and benefits?
  • Is each program properly coordinating the component projects using a single integrated master plan?
  • Are cross-project resource contentions identified in advance and resolved proactively before progress is impacted?
  • Have success metrics been identified for projects, for programs and for portfolios, and are they being tracked and reported systematically?

PostHeaderIcon Project Prioritization Criteria

Sorting the Best from the Rest

For most organizations, a critical component of portfolio management is a framework for prioritizing project work. This involves evaluating the merits of current and candidate projects against a common set of criteria and using the results to rank-order the importance of those projects for the purposes of optimizing the portfolio (see “The Goals of Portfolio Management”). But which prioritization criteria should be used?

Strategy Drives Priorities

Criteria should be directly driven by strategies – assigning a single criterion for each strategy is a good starting point. They should also be multi-dimensional in the sense that they appropriately balance strategic concerns across differing perspectives, such as financial, technical, commercial, process, people and customer; typical examples include:


  • Revenue, Profitability, Investment cost


  • Solution complexity, Innovation quotient, Technical risk


  • Market need, Market growth, Commercialization risk


  • Efficiency, Quality, Time to solution


  • Skills development, Existing resource leverage, Functional interdependence


  • Business impact, Customer satisfaction, Image

Note that criteria lie on a continuum of tangibility; while some are easily quantifiable for any project, the more intangible may be challenging to rate.

Keep it Simple

Once established, each project is scored against the prioritization criteria to determine its strategic fit and importance. Well-defined prioritization criteria and scoring models allow for clear differentiation between “clear winners” and “obvious losers”. Too often however, this all gets over-complicated. Here are a few guidelines to ensure that the prioritization framework is practical as well as accurate. Criteria should be:

  • few in number
  • measurable
  • mutually exclusive
  • linked directly to a business strategy
  • appropriately balanced for the portfolio’s type of projects.

To quote Einstein: Keep it as simple as possible – but no simpler.

PostHeaderIcon The Goals of Portfolio Management

Not such an easy target

Project portfolio management is gaining traction inside organizations as business imperatives, competitive pressures and the availability of better tools create a compelling value proposition. Effective portfolio management responds to fundamental questions, such as:

  • What projects are going on?
  • How well do our projects support business strategies?
  • Are we investing in the most appropriate way?
  • How far are resources overstretched?
  • How well are projects meeting performance targets?
  • Are project priorities clear and being acted on?
  • Are projects delivering anticipated benefits?

Three Overarching Goals

All these types of questions point to measurable indicators of portfolio efficiency, which is itself driven by achievement in meeting the three primary goals of portfolio management:

1 – Align Projects with Strategy

WHY? To validate that each project is evaluated on it’s own merit for contribution to strategic objectives.

HOW? Establish impartial criteria for judging project importance. Strategies must be the starting point for determining these criteria – which naturally implies that strategy needs to be clear. Weight the criteria to reflect the more important strategies and avoid excessive focus on financials.

2 – Maximize Value of Utilized Resources

WHY? To achieve the best return from available funds and people.

HOW? Consider alternative investment options for each individual candidate project. Insist on accurate resource forecasts for all projects. Use phase-planning on major projects with stage-gates to control execution. Optimize project resource utilization in conjunction with strategic importance.

3 – Achieve Balance

WHY? To ensure appropriate attention is given to necessary, internal capability-building projects as well as those exciting, high-earning customer-facing projects.

HOW? Set up separate sub-portfolios or ‘domains’ for projects of a similar nature, each with their own relevant prioritization criteria. Systematically re-assess project investments, execution performance and delivered benefits across domains.

The Bottom Line

Getting all this done requires (a) strong top-down support, (b) the right framework to operationalize portfolio optimization, (c) a highly effective Portfolio Support Office, and (d) proper project management in place across the organization. Deficiencies in any one of these will always compromise success.

PostHeaderIcon Linking Projects to Strategy… er, what Strategy?

All good portfolio managers know that their organization should select and value projects with respect to its chosen strategies. This is intuitively rational given that strategy lays out future direction and projects exist to transform that vision into reality by satisfying needs for change and improving on what was or what is.

Ocean pier in the mist

Blue Ocean or Misty Ocean?

The reality however is that core company strategies are oftentimes not widely communicated, or at least, they are not well understood across the organization. I confess this does not make much sense to me. Why spend time conceiving Blue Ocean strategies or creating Balanced Scorecards if the outputs (and importantly, the consequences for project work) are not plainly articulated to all? (Ok, I’m forgetting the cost reduction or downsizing strategy which tends to be conveyed without much ambiguity).

The Future is Now

There are some exceptional standouts of course – I once consulted at a global bank that had its core strategies posted on everyone’s cubicle – but in the main I meet disturbing numbers of managers and PMO staff who readily confess that their organization’s strategies are pretty much invisible or at best opaque. (When I hear this, my mind heads off into scenes from the visionary 1927 movie “Metropolis” which portrays a segregated world of workers slaving underground, achieving goals without vision, while the ruling elite above the surface – the Thinkers – make grand plans without knowing how things work).

Without clear strategy, we have no context of purpose. The entire organization needs context of purpose. Purpose inspires. Without clear strategy, good ideas and smart programs cannot be developed, projects cannot be optimally aligned, evaluated and prioritized, and resources cannot be effectively mobilized and motivated.