Defining a Prioritization Criteria
Prioritization criteria can be customized to each organization, but if you’re just starting out or want to revamp your current criteria, we recommend starting with these six. You can use all or some of these criteria as they’re applicable to your organization. For each one, we’ll look at what they mean, how they can be applied and what weighting you could use.
Whether you’re looking to develop project prioritization criteria or not, we recommend always asking this question before you start any project: which goal does this project support? This seems like an obvious question, but it’s not uncommon for organizations to commit to projects without thinking about how they support goals. You need to ask this question because it immediately filters out projects that won’t help your organization reach its goals. Additionally, you’ll also use goal alignment in other criteria so it’s a crucial first step in your prioritization.
A Note on Projects without a Goal
There are some instances when it’s perfectly acceptable for a project not to be aligned to a specific company goal. This can include things like regulatory compliance projects and run the business projects that are necessary for your business regardless of goals.
Strategy fit refers to how well a project aligns to the goal it supports. This criteria helps you determine how impactful a project will be. If a project only indirectly supports a goal or is only somewhat aligned, you’ll need to give it a lower strategy fit score. Not all your projects need to be highly aligned to a goal. The reality is that you’ll have projects with all levels of alignment. You can define levels in general terms like low, medium and high or use a numerical scale to express alignment.
It would be great if we immediately received the benefits of the projects we do when we complete them, but the reality is that some projects take time to deliver value. When prioritizing projects, you need to understand which ones will pay back quickly and which ones will take more time. What counts as a long payback period can vary by organization, but a good starting point is less than one year, between one and two years, between two and three years, and more than three years.
All projects come with some level of risk, but you don’t want to overload your organization with only high-risk projects. Risk level can refer to how visible a project is, the impact the project will have across the organization or the degree of uncertainty regarding if project teams can deliver on the project, among others. Just like strategy fit, you can assign values such as low, medium and high or use a numerical scale to illustrate risk.
For customer-centric organizations, considering how each project will impact customers is a must. Anything that impacts your customers negatively (or anything that is even inconvenient for them) degrades the relationship between your organization and your customers. To protect this relationship, projects priority should be evaluated on the positive or negative impact they would have on a project. You can create easy-to-use values like high customer impact or use a numerical scale. If you choose to use a numerical scale, you could also use negative numbers to reflect a negative impact to customers.
Understanding the amount of manpower and resources a project will take is an important piece of the prioritization puzzle. You don’t have to know the exact amount of capacity needed down to the minute. It might even be easier for your organization to think of capacity demands in really general terms like low, medium and high.