Prioritization and the Connected Leader
Project portfolio prioritization is a tough job. Even when times are good, you can’t undertake every project. When times are bad, you not only have to take on fewer new projects, you have to revaluate your portfolio and stop ongoing projects.
Stopping projects, in turn, is a part of common sense portfolio management. Whether you practice rigid gates, flexible gates, or funding by the seat of the CEO’s gates, project are started and stopped all the time. It’s easier to stop a project when you have clear data that the project is not going to result in appropriate financial returns. It is a lot harder when swirling macroeconomic forces motivate us to scrutinize each project more carefully, resulting in more aggressive choices (cuts) in their portfolio.
How you make these choices has a profound effect on how your organization will respond to news of which projects receive continued funding and which are cut.
Jack & Suzy Welch discuss some pretty critical aspects of good decision making in the age of the Internet in their article The Connected Leader. The Welches say the following in their article:
“We would suggest that it can be just as damaging for a leader not to respond to feedback as it is not to ask for it at all. In the old days, layers of management filtered out too many good ideas from below, but they also filtered out nattering. In the era of Internet communities, leaders will have to find, largely on their own, ways to process the good and bad alike.”
We can’t agree more. Our experience is that the worst approach is to portfolio prioritization in tough times is to have a small number of “senior leaders” close their doors and make these choices in secret, without involving the input of their internal and external stakeholders. Sure, decisions are made, but those affected rarely implement the changes with the speed and clarity needed in these tough economic times.
A far better choice, and one that is advocated by the Welches, is to have modern leaders leverage the many tools that the Internet provides to help them engage with their employees to make better decisions. One such tool is Buy a Feature, which enables groups of internal and external stakeholders to collaboratively prioritize project portfolios. By enabling others to actively participate in the decision process, leaders can gain a better understanding of which projects are most important, and why. Ultimately, the leadership team may not agree with the results of the collaborative prioritization process, and choose to fund or cut a different set of projects than chosen by the team. The benefit to the leaders is now they know which of their choices requires more elaborate discussions with the larger organization.
We’ve recently completed a project whereby we helped a large (>$1B in revenue) software services company prioritize an internal project portfolio of 46 projects affecting their global customer support organization. Using Buy a Feature, our client was able to engage more than half of the approximately 200-person global customer support team at all levels of management, from first-line support agents to Vice-Presidents of lines of business, in collaboratively prioritizing their project portfolio. Completed in just about three weeks time, the organization clearly prioritized 7 projects as the most important.
If you’re thinking about making tough choices in the prioritization of your projects, we hope you’ll take the Welches’ advice, and directly include your employees in this process.
October 27th, 2008 at 27 Oct 2008
Cool. Is it reasonable to extend this example to a centralized IT department managing a portfolio (fixed capacity) of projects to support the different business arms/divisions of a large corporation?
Also – how do you approach creating the groups of ‘customers’ in this situation? Do you suggest teams of first-line support (from across the global teams) and teams of managers? That seems most in-line with the explanations in the book. Also, how would you approach (or should you approach) the relative weighting of first-line support personnel’s purchases versus managers? Do you give them different amounts of money, or treat a “manager team” as providing 2x or 3x the input of “first line support teams”? Sort of a buying-power multiplier.
Definitely seems like a great way to get engagement throughout the ranks. Would love to hear how the dynamics of feature-selection within the groups plays out and how those inputs across the 100 person group rolled up. Or did I mis-read that half of the org was involved in the game. Did your client find that when decisions were made, after this exercise, that the teams were more receptive?
I’m definitely going to try this in the future – thanks for sharing this adaptation of the Buy a Feature game.
November 2nd, 2008 at 02 Nov 2008
Yes.
We have found that our approach to collaborative prioitization extends itself to lots of situations. We have used this approach to help teams:
– prioritize projects within a given department
– prioritize projects across different business arms/divisions of large organizations
– prioritize product features for new versions of products
– prioritize names for a products (everything from dishwashers to software)
– prioritize possible locations for a family vacation
I intend a very broad meaning of the word “customer”. If you’re working on a set of internal projects, then your “customers” could be the set of deparments affected by these projects. If you’re working on a product, your “customers” could be internal or external stakeholders. External stakeholders, in turn, could be channel partners, outside consultants, customers, and development partners.
In this case we cast a very broad net. The players for the games were drawn randomly from the entire organization. They played in mixed teams—that is, a first-line agent could (and did) play with VPs. In other situations, such as when you really want to know what a specific group of people think, you’d have them play as a group (e.g., one game with just first-line agents, another with managers).
We gave all players the same amount of money. We did analyze the purchase patterns of agents vs managers, which did reveal help trends. buyafeature.com, however, allows you to allocate different amounts of money to each player, so it would be easy to explore various hypotheses about how the distribution of money affects purchase behavior. And since “purchase behavior” == “prioritization choices”, you could use the system to explore how prioritization is affected by distribution of funds.
All I can tell you about this assignment was that the top seven choices were very clear and the purchase behavior was quite uniform across the organization. The results enabled our client to act confidently about a set of global project initiatives. And yes, our client found that the final selection of projects was well received across their organization.
We look forward to hearing about your experiences with the system!