In our second blog post from the series, 5 Key Ingredients to Fueling a Successful Product Launch, we will be exploring how to prioritize effectively.
From individual projects to the whole portfolio, the projects you select today will determine the shape and prosperity of the business in the future. However, if there are too many projects with unclear scope, how do you identify the projects with the best potential?
Part 2: How to Prioritize Effectively
Most people organize priorities based on urgency and importance. But with too many priorities, lines become blurred. Lots of companies lack focus, with too many projects and not enough resources. You need to assess your whole portfolio and ask yourself the following questions: Am I doing the right projects? And am I doing the right projects correctly? Successful businesses focus – they do fewer projects, better projects and the right mix of projects. A sharper focus means better prioritization.
You can improve your decision quality with the right information, and to do this you need to assess your whole portfolio. Explore and compare alternative scenarios. What is the probability of success? The latest portfolio management software can do all the hard graft for you and assess your entire portfolio, which enables you to analyse, prioritize and decide. It can master the complexity of prioritizing across a broad range of initiatives that have different objectives, potential rates of return, investment risks and constraints. It should focus on investment allocation, value maximization, strategic alignment, and portfolio balance. Therefore accelerating your best projects, focusing your resources better and managing risk verses return.
According to the Project Management Institute, “Because organizations tend to run several projects concurrently, project portfolio management is a key competence to flexibly adjust to environmental changes and maintain competitive advantages.”
Ideally you require a Project Management system that incorporates the following principles:
- Uses both hard and soft information – financial metrics and supporting qualitative inputs
- On-Line business case and “project profile” questionnaires capture key criteria in a repeatable and concise format – provides the fact base to feed the prioritization process
- Financial and strategic criteria – Typical criteria include Financial Return, Strategic Value, Organizational Fit, Innovation, Probability of Success, Market Attractiveness, Competitive Advantage.
- A flexible scorecard system to combine and aggregate the criteria applicable to prioritization – fully configurable to your business.
- Weighting system – to assign relative importance levels to criteria and scorecards
- Pairwise comparison process – to tune the prioritization model to reflect decision makers mindset
- Utility functions – To normalize diverse financial and numeric measures into a consistent scale of “worth”
- Stage Gate Linkage – Very simple prioritization criteria at early feasibility stages, expanding to more rigorous criteria and financial metrics at later stages when more information is available.
Flexible and powerful Project Management tools ensure you can make more informed decisions and bring objectivity to what can otherwise be a diffuse and cloudy task. There are very few decisions that are more important than prioritization. From individual projects to the whole portfolio, the projects you decide to select today will determine the shape and prosperity of the business in the future.
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5 Key Ingredients to Fueling a Successful Product Launch
Collaboration and Communication – The Key to Success
Managing Risk in New Product Development
The Importance of Appropriate Governance when Launching a New Product