How to Prioritize Projects
Select your PMO Leaders above and explore the questions and answers below for comprehensive insights into how to build an effective project prioritization framework.
What Market Trends are Driving the Need for Better Project Prioritization?
This starts with answering the bigger question of how are organizations addressing the bigger need for business agility. Organizations don’t have as long as they did in the past to adapt and respond to the needs of the industry, the economy, their client base and their own innerworkings as an organization. Organizations must now evolve sometimes overnight. That means that project prioritization is synonymous with business agility. Meaning we have to be in a position where we can easily and quickly get the information we need to adjust and respond and adapt to the stimuli coming into the organization and drive faster decisions making. Organizations today, because of the need to be flexible, adaptive, and have business agility, need to be in a position to adjust their current prioritization as needed on the fly. So that means a greater need for organizations to have an adaptive and flexible prioritization framework. We aren’t just prioritizing projects once a year now. We have to be looking at it constantly and at a minimum looking every quarter at where our priorities are and where we must shift in order to stay competitive and responsive to the global marketplace.
As always there are too many projects being proposed, and often approved, than can be delivered. And as the pace of business continues to accelerate, it is increasingly essential that organizations are investing in the right work. It’s not just about not focusing on the right stuff if prioritization is off, it’s about wasting money and effort on the wrong things. That not only fails to deliver value, it potentially takes organizations in the wrong direction entirely.
The pandemic has accelerated the speed of digital transformation, but not as a destination in itself, but as an enabler of the ability to continuously evolve organizations through technology to deliver innovative, value-based solutions to clients while streamlining and reinventing internal operations to be as efficient as possible. That can’t happen if you aren’t prioritizing where to spend your discretionary dollars, or even how to split between discretionary and operational expenditure.
What is the Importance of Project Prioritization?
Organizations have so many different things that they are working on, and project prioritization helps make sure you’re working on the right projects, at the right time, with the right people. If we think about the type of work done in an organization, there is operational work and there is project work. Operations has it’s natural cadence. You have SOPs that are defined that shows you have to do the work, but projects are unique. They are something that gets approved that is outside of standard operating. If you work on every project all at once, we probably don’t have enough resources, we’re pulling our resources too thin, we’re probably not accomplishing our day to day jobs as well. It’s important for us to build a process in order to define the rules of prioritization and then walk through that cadence on a regular basis with your leadership team so that you are able to ensure the right people work on the right projects at the right time.
How Would You Recommend Getting Started With Prioritizing Projects?
Don’t try and run before you can walk. Start with the basics and master those. That means:
- Centralize demand – you can’t prioritize projects effectively if you have different ‘pots’ of proposals based on business area, type of work, etc. It shouldn’t matter if a project has been identified as the result of a support ticket or a strategic objective, whether it’s from IT or sales, it should feed the same backlog so there is just one prioritization list.
- Understand where things are going wrong right now – it’s easier to stop doing the wrong things than it is to start doing the right things. That means know where projects are being approved, understand which areas are doing well and which are doing badly, and recognize the amount of money and effort that is being wasted.
- Know your capacity – how many projects are you capable of delivering? Then allow for variances, change and contingency and don’t approve more than you can actually execute on.
What Steps Would You Recommend to Improve Project Prioritization?
I think the primary steps you need to take to help improve your project prioritization is to involve your leadership team. As in any part of an organization, our leaders are key drivers to help us be successful. If we in the PMO are trying to build a project prioritization process without the input of the business, most likely we aren’t going to take into consideration critical factors that would help us prioritize projects better. For instance, if we’re an organization that has strong ties to compliance or regulatory and we’re not considering that as part of the portfolio decision making process than we are missing out. I think it’s really critical to understand the true scope and business priorities when we work through prioritization decision making. So, involve your executive leaders to help you build out the right process to make sure your meeting the business needs because after all the business is our customer. The PMO is delivering on business projects and we want to make sure we are working on the prioritization that they feel is the most important to the organization.
What Does an Effective Project Prioritization Framework Look Like?
The purpose for project prioritization is to ensure that the resources, not just people, our time, our money, our focus, our cost of not doing something are laser focused on what makes the most sense in the moment. Every project prioritization framework that you implement must be nimble, flexible and adaptive. We are not in a place anymore where we can simply prioritize once a year. With a global environment and marketplace that we are in these days, we have to make sure that whatever we put in place is adaptive and flexible can help ensure the organization in agile in its ability respond to change. The most effective project prioritization framework is one that takes place before the projects are starting and continues to be revisited throughout the year as the organization needs to respond to changes in the environment.
What Does Project Prioritization Success Look Like?
It looks like healthy conversations are happening. Which again means, we do not all agree or we suffer from group think or all agree to make a bad decision together perhaps, but that we have a way to get to the healthy conversation, a decision, and move on without feeling like “I wasn’t heard,” or “that was unfair,” “the boss is playing favorites” and all the other natural normal stuff we might otherwise feel. There are a couple of really cool techniques on this. My favorite is Leadership as a Service (LaaS). This is different from the more general notion of servant leadership, but it is a way to do servant leadership, so you can get to team based decisions, have the healthy conversations, establish a timeframe, honor it, and make the decision and move on.
What are the Most Common Project Prioritization Challenges?
So I hear about all of the symptoms of project prioritization. People say that we need to get rid of politics or we need to check our egos at the door, but that’s just not human. That’s not reality for human beings. We’re political social creatures and we react to our environment in a way that we think we need to succeed. The key is channeling that in a way where it stays healthy.
How Does Project Prioritization Help Strategy Execution?
As organizations are needing to become more nimble and flexible and they are setting themselves and their fiscal year, they need to look at how do we ensure that all of the strategic initiatives that we create come from the strategy. How do we make sure that the projects that are created aren’t created in some separate vacuum, but that it starts at the top with the top with the strategy and allows for the products and projects to come from that that strategy. Therefore allowing projects to stay aligned with the strategy of the business from the very beginning. Then project prioritization processes and tools need to be tied to strategy definition, strategy execution and strategy realization. The ideal and most effective project prioritization tool, process and framework needs to be able to work toward the entire strategy process instead of the specific strategy delivery of projects.
How Does the Right Approach to Prioritizing Projects Impact the Business?
I think we have come a long way on this one. I think in the past, or maybe still with some organizations, the approach was heavily politicized, lots of back room dealing, lots of compromises, and lots of compromises done in a bad way where we get half of everything and not really achieving any of the business objectives. But, maybe achieving some individual political objectives inside of the organization. So I think that the core element that we have been seeing progress on is promoting the right kind of healthy conversations. So disagreement is understood. Of course, we are all different human beings, hopefully we have a good way to make a group decision that doesn’t require unanimity but does require all voices heard and a proper way to discuss why we disagree and finally have a way to come to some sort of conclusion to make a decision and move on. Lots of ways to get to those healthy conversations, but the key is does it promote those healthy conversations from people who are expected to disagree.
How Does Project Prioritization Need to be Addressed at Different PMO Maturity Levels?
At the PMO Squad, we’ve come up with the Project Management Journey. This is a maturity model about how mature organizations are at delivering projects. There are five milestones that organizations work towards over a period of 5-10 years. It’s starts out at Ad Hoc project management – when a project manager, maybe not even a defined role or title of project manager, is doing a project. They may be an accidental project manager, they may have never been trained in project management, they may not have standard templates or people in the organization might not understand how project are delivered. Ad Hoc project management organization is going to prioritize their project portfolio very different than an organization that’s at milestone 3 which is organizational acceptance of project management. Really, the prioritization process evolves overtime. As the organization matures and more functions and pieces of an organization buy-in to the project management than your prioritization process will evolve as well. Ultimately, where you want to get to, of course, is that super mature organization that has aligned strategy and execution. Where your project portfolio is being prioritized by leadership teams to ensure that everybody is collectively working towards key strategic initiatives. Ultimately, your company priority and company organizational maturity level grow together. An Ad Hoc organization won’t be doing it as well as someone more strategic.
How should organizations go about implementing proper project prioritization?
Like so many other aspects of business it comes down to people, process, and tools. On the people side of things, the focus should be on helping all employees understand why it is important to have an effective and efficient approach to prioritizing work. This is proactively answering the ‘why’ questions that people naturally have when they are asked to change how they operate and it serves to give context and gain buy in to the other changes.
Process is all about the mechanics of the work – the ‘how’ and ‘what’. This is where standard approaches to prioritization are introduced for every type of work and every business area. Those approaches should be developed in conjunction with as many disparate stakeholders as possible, but the focus must be on consistency – allowing one exception soon leads to allowing ten exceptions and you suddenly don’t have a standard approach to prioritization.
Tools are the enablers. You can’t standardize prioritization of all work across all areas in spreadsheets! It won’t work, and it won’t be accepted by users. Instead, you need the ability to capture information in a standard manner, you need workflow to help users provide that information, you need the ability to report and analyze on the information captured, and ultimately you need to be able to feed work management systems with the prioritized items to facilitate better delivery.
What steps can organizations take to solve for project prioritization?
I think the biggest thing about project prioritization is making sure that we have real clarity and direct line of sight of the overarching business objectives or business strategy that we are here to achieve. Because so often, we get pulled into what I call the “solutions space” on what solutions a given project is there to deliver. We forget the problem that we are asking the solution to solve for us. So I think if we’re a bit clearer on the purpose or business objective then the prioritization discussion and challenges becomes far easier.
What is the role of the PMO in project prioritization?
The PMO usually the home of where all projects are executed and completed. Oftentimes the PMO is also the place where the project portfolio is maintained. The project portfolio, of course, is the complete list of projects. How you determine which ones you work on is usually done through the project prioritization process. So if we think of the PMO as the owner of the portfolio, the business usually owns the prioritization. The PMO then works with the business to build the rules. What are the ground rules to help determine which projects within the portfolio get worked on. To me, that’s the real value of the PMO. When we can build the standard operation procedure for prioritizing work that then gets executed and delivered. The PMO is serving as a value add function within the organization. So the business owns the rules, the PMO owns the portfolio and collectively you work together to prioritize what gets done and when.
What are the common pitfalls of inaccurate/inefficient project prioritization?
The simplest answer is that the wrong projects get approved and at least some of the right projects don’t get approved. That’s real wastage and lost opportunities. It can easily result in underperforming as an organization and the loss of standing with customers and against the competition. It can also result in a loss of moral among project managers and teams, increased turnover and reluctance to be involved in future projects.
If the real underlying issues aren’t understood it can also result in PMOs being blamed for the problems and restructured or disbanded, further hurting the ability to address prioritization and other project related issues.
What are common objections your clients face regarding project prioritization?
One of the biggest challenges that many clients face when starting with project prioritization is understanding the effect the business and stakeholders are having on the project delivery process by not setting up a proper project prioritization process. So once we have the strategy and strategy definition phase, we must make sure the products, the programs and projects come from that strategy as opposed to a bottom up approach. Therefore ensuring we can maintain that alignment right from the start. From there, we need to help our clients understand that in order to set up these projects for success from the start, we must make sure that are aligning these projects with initiatives and business objectives and aligning resource to those objectives to ensure the desired business benefits. What often happens is that PMO leaders are brought into organizations that they must “fix project management” when the project management process may need some improvement but most of the challenges are happening at the front end of it before any of those projects ever start. So, we need to make sure with our clients that the key to their success of project delivery and strategy realization is making sure that the processes are set up from the start to effective monitor, govern and prioritize the portfolio initiatives that are aligned with the strategic objectives. When you’re starting out and you’re told to fix project management, do a little root cause analysis that ensure you’ve got your projects prioritized properly so that your resources can be assigned to those projects in the most effective manner and then staggering that work out to create the optimal and maximal throughput for the year. That’s where you’re going to ensure that you don’t hit challenges regarding the strategy lifecycle.
What roadblocks do teams face when trying to get better at prioritizing their projects?
The project management journey and steps organizations evolve in face different challenges. If you are an Ad Hoc organization for prioritization, it’s going to be very difficult to get a leader to make a decision as to what project to work on. You’re probably going to get a response back, “They are all important – work on all of them.” But, as your organization matures and you build templates and processes to create standards across the organization, you’ll start to see a change in mindset. So, the challenge might not be work on all of them. It may be, “How do we determine the best way to prioritize?” What sort of scoring model should we put in place to prioritize projects? How do we align resource management with project prioritization decision. So, maturity really ties into the challenges that you face. If you are very immature as a project delivery organization, everything is a challenge. You have to start building small incremental wins. As you get more mature and have standards built, now you get into the more mature deeper challenge that you would face in a process definition. Wherever you are is probably going to determine what kind of challenges you face in your project priorities.
How to get internal buy-in for proper project prioritization?
It’s the healthy conversation part that’s really the key missing ingredient. The reason we’ve had all these conflicts and compromises and back room dealings and politicking is because people feel like they are not being heard. Like we’re not having a cohesive group discussion where we air out our normal differences that we will of course have. Then get to something that we can all live with as an attempt to execute on the strategic goals of the business. Not every decision we are going to make is going to be the right one, but the fact that we can have a healthy process to get there. Accept that the outcome might be suboptimal, but learn from those failures and apply it going forward to enhance team unity.
What stakeholders should be included in project prioritization?
Project prioritization should be standardized across all business areas and work types so there needs to be a broad set of stakeholders. That needs to include:
- Executives – determining the funding needed for strategic priorities
- Department heads – protecting their interests, identifying dependencies on other work, and validating resource impacts
- Strategic PMO, Enterprise PMO, or equivalent – the function that will be accountable for effective management of the portfolio. This may be multiple functions depending on how work is being prioritized across the enterprise
- HR, L&D and procurement – understanding the implications on resource needs. This is an often-forgotten stakeholder group but engagement is essential
- Finance – validating investment levels, capital vs. operating expenditure and cash flow needs
- Internal audit / risk departments / functions – confirming compliance and analyzing risk distribution across time and business areas