Portfolio Planning — Why project scoring doesn’t have to be as tough as it is

Author: Danny Gans

Ah, fall. Leaves are changing, the sun is setting earlier and the smell of pumpkin spice in the air. But for portfolio leaders this time of year often reminds them of another looming obligation – portfolio planning. The dreaded process and often unavoidable debate over what projects will be taken on, which products will be invested in, and what will be sentenced to the backlog. While this is likely an inevitable endeavor, it really doesn’t need to be as painful of a procedure as it often is. In fact, I’m here to tell you that portfolio planning can be much simpler than most portfolio leaders have come to know. The secret? Project scoring. 

Yes, getting a scoring model is tricky and will likely involve a number of animated discussions. It will even require a good hard look in the mirror for many organizations as you attempt to not only define what is most important to the business but even assign a ranked value to that metric. But I promise you, once you have the model in place, your portfolio will become that much better for it and you might avoid some additional headache.

The Problem of Prioritization: Politics, Outliers and the Unexpected

Most PMOs and PMs have experienced some form of the following scenario: You’ve got your resources allocated, your timelines set and all of your tasks assigned. You’re on target to accomplish all of your goals and maybe even come out ahead on some of your deliverables. You’re feeling like a PM rock star. Then you see it in your inbox. The request to shift all of that work aside and focus solely on a completely new project that wasn’t in the plan. Adding to the complication is that this new outlier comes from someone high up in the management chain. Then another email. A client needs a deliverable moved up far sooner than expected. Then another. Soon, your best plans are seemingly in shambles. Now what?

In an October 2020 Gartner report titled “Depoliticize Project Prioritization With a Decision Framework,” analysts Mbula Schoen and Tina Nunno outline this exact challenge, writing, “When decision makers lack or misapply the empirical criteria needed to objectively make trade-offs between competing initiatives, politics and a “whoever shouts the loudest” scenario is often allowed to take over.” However, loudest does not automatically equal most important. The solution to this dilemma is not to give in, nor is it to automatically assume their project isn’t actually important just because they’re being pushy. The solution is to implement a project scoring model that allows an unbiased method for selecting and prioritizing projects. 

Getting Started with Project Scoring

In a recent webinar, “Prioritize Your Projects — Rinse and Repeat” we talked about project scoring in depth and broke it down into five commonly used categories — Business Alignment, Impact/Disruption, Technical Support, Risk and ROI. Keep in mind that organizations can adapt them to their own unique needs but this is typically a good start. In order to come up with a model that works, you’re going to have to find a way to ask questions that help you differentiate the important from the less important. 

Before you can even begin to prioritize projects, you must first have a handle on your business goals. They, above all other criteria, will help you navigate which projects deserve primary focus even when a decision seems nearly impossible to make. For example, if the number one priority of your business is longevity, projects that deliver that end result would automatically score higher than other projects driven by other values. On the other hand, if ROI is your priority, then selecting projects that maximize your investment would be the key to advancing business goals. Start by creating a set of questions such as:

  • What is the primary goal of the organization?

  • What are secondary goals?

  • How do we realize those goals through project management?

  • What projects fulfill these goals?

  • What underlying factors can complicate decision-making?

  • What factors are immovable obstacles that must be worked around? 

Using Weighting/Valuation in Project Prioritization

We can use the example of an emergency dispatcher to illustrate the idea of prioritization. In an emergency call, a dispatcher launches a pre-determined process of gathering information, assessing resources and determining where the call fits in the queue. They ask questions about the nature of the emergency, the immediate danger to the caller, the risk to life and property and multiple other questions. This helps them “score” the call to determine its urgency and prioritize it against the available resources at the time. 

Sometimes, selection is not as simple as whether or not a project fits in the “high priority” category. Referring back to the dispatch analogy, not every emergency call is as easy as deciding between a cat stuck in a tree and a house fire. For example, what does a dispatcher do when there are three car accidents and only two officers available to attend the scene? That is where the true difficulty in delegation lies and it is where the operator begins to examine the weight of one decision over another. Weighting also supports decision-making in urgent project management decisions. It takes the broader buckets and gets into the nitty-gritty details to help make the best option more clear.

Let’s say your primary focus is to prioritize projects that align with the business goal of generating increased revenue. Two projects then come along and both fit in that bucket. However, you only have the resources to deliver one. Further complicating the scenario is the fact that both project owners are of equal authority within the organization. This is the example that weighting was made for. Short of the unlikely possibility that both projects are completely identical in every possible way, there will be factors such as timing, delivery, resources, risk, effort, impact and disruption that will eventually push one option ahead of the other.

The Analytical Hierarchy Process

The process above can be even further developed to create an Analytical Hierarch Process. This can be used in a mathematical equation to determine the best possible outcome. The steps described above can be applied to the single goal and weighed against a given criteria to support a decision using these steps:

1. Define the problem and measurement criteria

2. Produce a hierarchical order based on these components

3. Define the alternatives

4. Establish priorities amongst the criteria using pairwise comparisons

5. Get the relative weights

6. Apply the weights to the alternatives

7. Determine priority of alternatives

8. Conduct a sensitivity analysis against the model

This example can be demonstrated with the example of purchasing a family car. Further distilling this down and weighing sub-factors to further narrow the selection might give an output like the below.

As you can see, each layer of the hierarchical process takes the PMO/decision maker further from office politics, emotional investment and other non-business factors and brings clarity to prioritizing which projects best fit the desired organizational outcomes.

Implementing Project Scoring

Developing a model for project scoring requires diligence and cooperation. A few steps you can take to help implement a scoring model include:

1. Create a committee: This should represent multiple decision-makers and team members so you have broad perspectives. Additionally, it gives you a nice coalition of invested cheerleaders who can share the message across their departments/spheres of influence.

2. Decide on criteria: It is important to develop your scoring model based on business goals, be it enhanced customer service, increased revenue or any other factor you deem important. Since you have a committee, you’ll have a variety of insights you can rely on for refining those goals.

3. Roll out your scoring plan: This gives you an opportunity to set expectations and smooth any rough edges.

4. Develop a supporting process: This is where you create the framework for measuring projects against your proposed criteria. It’s far easier to create and continue buy-in when the parameters are clearly outlined from the get-go.

5. Right-size your scoring model: Not every organization needs an intense scoring model filled with decision trees — sometimes a few basic metrics are enough to easily determine priority. Conversely, some companies might desperately need those extra weights and metrics to accurately determine a project’s importance.

Don’t Let Improvement Stagnate 

Developing a project prioritization framework is not a one-and-done kind of undertaking. Yes, you can absolutely get the bulk of the big changes completed, but there will always be a need for subtle adjustments. We need only look at the current times to understand how important the ability to flex can be. Don’t be overly focused on getting it right — you will always need to adjust and adapt. At KeyedIn, we call this “replanning for continued success.”

  • Create a system of continued prioritization with scored and rated backlog. You should always have pre-screened projects ready to go, with each one scored for where it falls in the queue.

  • Develop a standardized intake process for review and approval. Everyone should have to follow the same protocols to get their work on the docket. Create a system that has one entry and one process for determination. Close any loopholes or backdoor methods for approvals — every project comes in through the same door and is measure by the same metrics.

  • Schedule regular reviews to check for alignment and changes. Businesses change, customers change and the economy changes. Make sure you’re aligned with business goals and that business goals are aligned with company needs and the current trends. Then you can ensure your scoring model continues to produce the best outcomes.

Don’t Neglect Measuring and Reporting

If you want to know how your project prioritization system is performing, you’ll need to follow the same protocols you use for a successful Agile PPM strategy; that is, you’ll need a solid reporting strategy that will allow you to measure your outcomes. This also has the benefit of allowing you to frequently take the pulse of your scoring criteria to make sure it is actually helping you prioritize the proper projects. If, for example, your goal is increased ROI and your reporting shows you are consistently falling short, your scoring criteria or your weighting system might be conflicting with that goal. By measuring outcomes against goals, you can quickly ascertain where the loose ends are and shore them up.

Conclusion

While planning is an important and complex process, implementing a scoring model can help you not only in your selection and prioritization, but also in your re-prioritization of your most important projects. Avoiding the pitfalls of developing a project prioritization system lies in following best planning practices, doing the hard work in the beginning and then honing it as time goes on. Addressing these cautions and considerations from the outset will ensure not only that you build a winning strategy from day one but also that you have a strategy that is scalable and supportive of company objectives so you can rest easy and might have your portfolio planned in time for turkey day. 

To hear more about this topic, watch the recording of our webinar, Prioritize Your Projects – Rinse and Repeat.