Mike Pelfini — 02 April 2024
Priority setting with objectives, resources, and time – the 3 interdependent variables – leads to critical, important, and desirable priorities.
Priority setting is a challenge for both individuals and organizations. We may tend to do too much and take on too many commitments. We may have competing objectives that stretch our limited resources too far. And we may have legacy projects that no longer serve our needs.
We need a systematic approach for priority setting to make sure our efforts, as individuals and organizations, are aligned with long term strategic goals. We need a method to make rational choices when allocating time and resources among competing goals. We need to avoid pursuing outdated or unproductive initiatives, whether because of tradition, the “sunk cost” fallacy, or other reasons.
This article will consider rational ways of priority setting, in order to allocate resources to maximize individual and organizational resources.
Make priority setting part of a regular strategic evaluation
The process of priority setting can run out of control unless it’s part of a regular, ongoing evaluation of goals and needs in the long, medium, and short term. Make prioritization part of a recurring, periodic evaluation of strategy.
At the outset, ask how the proposal will advance organizational goals or satisfy needs. How important will it be? Will it draw resources from other projects? Once a project is approved it needs to be part of a regular strategic review – particularly when new priorities and new projects are being considered.
The ongoing strategic review should consider whether the project is progressing as intended, needs to be modified, or no longer meets the organization’s needs. Regular review will avoid over-committing resources or wasting resources on projects no longer worth the investment.
Use the “T-shirt sizing” method to winnow priorities
It can be helpful to begin the process of setting priorities by creating a simple, clear set of guidelines using what one author calls the “T-shirt sizing” approach. The idea is that T-shirts are usually sold in basic sizes like small, medium, and large. Simplicity makes choosing easier, which is useful when faced with a number of competing projects.
Rather than investing time and effort analyzing each proposal in depth, it can be more productive to develop simple metrics to narrow the possibilities. What is the expected economic value of the project? What resources will the project require? How much time will be needed to realize the benefits?
Only proposals that survive the initial “T-shirt sizing” review should be considered in more depth.
Priority setting with objectives, resources, and time
Once the organization has selected projects to be pursued, it needs to assign priorities for its scarce resources and time. Ranking priorities is one way to do it. But rank ordering has drawbacks, including internal competition for resources and potential loss of morale.
A more rational approach, according to the Harvard Business Review, is to recognize that every initiative depends on three “interdependent variables” – the objectives, the resources, and the timing. A change in any one of the variables means a change in the others to compensate, as we’ll see below.
Instead of using a ranking system, priorities are grouped into three categories:
Critical Priorities: These are initiatives that must be completed within a set period of time. The objective will be strategic and crucial to the organization, such as launching a new product or closing an important transaction.
In this example, the objective and the timing are fixed and not negotiable. The only variable element is resources. Assuming the objective is critical, the organization must devote whatever resources are required to reach the objective on time.
If more than one initiative is considered critical, it’s essential that the organization determine in advance where extra resources for each one will be found if needed.
Important Priorities: These are initiatives that can provide a substantial benefit to the organization. The objective will likely be of lower strategic value than a critical priority. Again, the resources are fixed at the outset. The variable elements are the timing and the objective.
For example, the organization could allocate resources for a fixed amount of time and accept whatever objective it has achieved at the end. An example could be assigning an engineer to update software for a period of three months only. Or it could allocate resources for as long as it takes to achieve the desired outcome. In the first example, the organization has compromised on the outcome. In the second, the organization has compromised on the timing.
Desirable Priorities: These are initiatives to which the organization cannot commit specific resources or timing. They are projects to be completed when resources are available. Because desirable priorities don’t have fixed resources, they become the “bank” when resources are needed for critical priorities. The organization must recognize from the beginning that desirable priorities may have to make way for progress in other areas.
Once the organization has identified initiatives as being critical, important, or desirable, it will have a rational basis for allocating appropriate resources and time for each objective. Having an analytical framework for those choices is key.
If you would like to learn more about priority setting specific to your needs, please contact us.
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ForeMeta offers breakthrough leadership coaching to develop CEO self-leadership and leading teams and organizations. We offer both individualized coaching or group coaching to help leaders and their people achieve greater success. Please contact Mike@ForeMeta.com