What Should Take Priority? A method for prioritizing projects and opportunities to align with your business strategy.

Objective:?As your business continues to grow and uncover potential opportunities, you should have a written strategy playbook on how to choose and prioritize each project. To consider each opportunity or idea, it should first pass a “sniff test” before additional time and resources are allocated. Assuming the opportunity passes the sniff test, it should then be put through a priority matrix to understand how and when the project will be executed. Because all companies have a finite number of resources, it is important to prioritize each activity to reach maximum success.?

Step 1- Sniff Test:?Before any opportunity or project idea is adopted into the strategic plan, a simple sniff test can weed out?less?desirable opportunities by asking three important questions. If all three answers to the questions below are yes, it should move to the priority ranking phase. If one answer is a no, it should be reconsidered. If two questions are answered with a no, the opportunity should be filed away for potential future consideration. If all three questions are answered no, they should be thrown out completely.?

1.?????Does this opportunity align with our business goals, mission, brand, and strategy??

2.?????Do we have the resources, and is it in our wheelhouse?

3.?????Can we do it better than our competitors, eventually securing first or second place in market share??

Step 2- Prioritize:?Assuming the project passes the sniff test, the next step is the priority ranking process. Every project that your company will encounter will have associated opportunity costs. Even if the project turns out to be accretive to revenue and profitability, every project or opportunity runs the risk of making the company lose money, time, and resources when comparing it to other projects that were delayed or overlooked. The goal is to prioritize each project and opportunity to be in line with the company strategy, extracting maximum ROI from resource input. Prioritizing projects should consider the steps below.

1.?????Business Value: All projects should bring value in the form of revenue generation, brand equity, and business relationships. Value should not be limited to revenue generation and profitability. Some projects may realize no revenue or may even be unprofitable. In some instances, that might be the desired objective because value is measured from the perspective of brand recognition, relationships, satisfying customers, and building a foundation for future revenue/profitability growth. The essential criteria to assess value are:

a.?????Revenue generation and profitability

b.?????Brand equity, reputation growth

c.??????Satisfying customers

d.?????Building relationships

e.?????Strategy Alignment

2.?????Urgency: Many projects will need higher levels of urgency to realize their potential or prevent loss. However, urgency should not be confused with importance. If a project is urgent but prevents higher-priority projects from being adequately managed, its priority should be reconsidered. The highest priority projects should be urgent and important. A valuable tool to use when deciding on urgency is the Eisenhower matrix.?

3.?????Dependency: Every project has some level of dependency on other variables, whether those are preceding projects that need to be completed or projects that are reliant on other variables to be successful. Listing out all dependencies is a critical step to assigning a priority ranking to each project or opportunity. When thinking about dependencies, these things should be considered.?

a.?????Tasks involved in the project.

b.?????Roles of stakeholders involved in the project.

c.??????All tasks and projects that need to be completed beforehand.

d.?????Business functions that will need to be involved.

e.?????Is the project reliant on resources that the company does not currently have?

4.?????Scope: In this exercise, the scope should be defined regarding timelines, costs, and how many stakeholders will be involved. Obviously, there are constraints to your company’s ability to be successful if the project is too big. The two main constraints are time and money. Each variable should be estimated to understand if the project is possible and what steps must be taken to move forward if the scope exceeds current resources (refer to dependency). Another solution to move forward if the scope exceeds current resources is to reduce the scope (features or objectives). Some of the questions regarding project scope that should be considered are:

a.?????Stakeholders- Who needs to be involved?

b.?????Bandwidth- What time do they have available?

c.??????Skillset- Do we have the current skillset?

d.?????Budget- Is there room in the budget?

e.?????Financial- What are the capital requirements? Will outside capital be required?

f.??????Timeline- Does the project have a required timeline to be successful? Can we meet that timeline?

g.?????What is the estimated ROI?

5.?????Timing: Different from the timing discussed above, in this exercise, the time to revenue, payback/breakeven timing, and time to profitably should be considered. Depending on the stage of the business, the importance of timing can change. For example, during the startup phase, the time it takes to generate revenue might be more important than the full market potential of the project, the amount of revenue possible, brand recognition, or relationships. This is an important discussion, as some opportunities might not totally align with the company strategy but will help fund other initiatives.?

Conclusion:?With the finite resources that are available to your company, it will be worthwhile to put priority on all your projects and opportunities. This will allow you to stay directionally correct, allocate resources to the highest priorities, increase?quality?and value to your customers, efficiently grow the company, and maximize return on all investments. It is important to track the right data and do the appropriate research to be effective in prioritizing your efforts to reach goals that align with your overall strategy. Priorities are an ongoing effort as you will run into more opportunities and ideas for new products, partnerships, internal projects, or services. With this method, you will be able to reorganize when situations arise.?