The Power of Prioritization: from the board room to the shop floor

An organization's essence lies in its actions. Building on our previous discussion on the importance of leadership providing the strategic vision for an organization, let's delve into the activity essential to translate vision into action: prioritization.

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Every organization, regardless of its size or domain, grapples with the challenge of prioritization. It's not merely about choosing which task to tackle first; it's requires aligning these choices with the organization's strategic vision. An effective prioritization strategy is intrinsically tied to an organization's marketplace success, financial prosperity, customer satisfaction, and talent retention. Given this, natural questions arise about, how should organizations go about prioritizing and can the same model be used across the entire organization?

Changing how priorities are set is a powerful signal for changing culture

Agile organizations replace traditional, often politically-driven, hierarchical prioritization in favor of models grounded in data and the foundational agile principle: "...satisfy the customer..." There are numerous agile prioritization models available. At the core of every agile prioritization model is an unwavering commitment to delivering customer value.

For a deeper dive into value metrics, I invite you to explore my piece on Value vs Vanity metrics

The remainder of this article is dedicated to differentiating between the different prioritization models and identifying a single model that organizations can use for all prioritization. A survey of prioritization models shows that beyond the central role of customer value in prioritization, three additional dimensions come into play: business value, complexity, and effort.

?Business Value

This gauges the potential impact on specific business outcomes and ensuring that value created is aligned with the organization's objectives. E.g. increasing the sale of replacement parts due to poor quality in manufacturing would not be aligned with the organization’s objectives.

How to use: Strikes a balance between what customers value and what benefits the business and ensures that the link to business strategy is considered

Complexity

A solution's intricacy must be considered. While more complex solutions may seem manageable, they require meticulous attention to detail. Simplicity often equates to robustness and speed of delivery. Complexity estimates also often include an indication of the effort required.

How to use: Helps to spot seemingly promising solutions that may be cumbersome to execute. Since effort is often included, using complexity removes the need for a separate effort dimension.

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Effort

Estimating effort seems straightforward, but is fraught with pitfalls. A typical misstep is treating effort estimates as absolute truths, leading to unrealistic expectations and delivery delays. We've all seen how this plays out, especially when IT estimates become embedded in SOWs (Statements of Work), creating an illusion of contract-like certainty.

How to use: If using effort estimates, they are best used as a tie-breaker between otherwise equal priorities. Otherwise they should be used with caution, since assigning importance to effort estimates, which are known to be inaccurate, can skew priorities.

?Effective prioritization creates alignment between actions taken and the organization's broader vision

Looking across the spectrum of prioritization models, the DVF (Desirability, Viability, and Feasibility) model stands out as the most comprehensive, without requiring the extra work of the RICE model. DVF provides a balanced approach, seamlessly combining customer value, business value, and complexity. Using DVF can bring clarity to your prioritization, whether you're looking at broad, multi-year projects or smaller tasks within a two-week timeframe.?

Beyond task sequencing

Effective prioritization creates alignment between actions taken and the organization's broader vision. The DVF model supports this by harmoniously blending customer value, business value, and complexity. It serves as a guide, helping businesses navigate the challenging landscape of choices, from broad multi-year programs to specific short-term tasks.

Impacting Culture

The culture of an organization is revealed in its actions, and these actions are primarily shaped by how priorities are set. Changing how priorities are set is a powerful signal for changing culture. Setting the right priorities can significantly elevate an organization's position in the market and its relationship with customers and stakeholders, setting up a powerful, reinforcing loop.

This is Article 2 in the prioritization series

• The Leadership Compass: Steering the Ship with Strategic Vision

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