The Inputs Into a Strategic Prioritization Process

Posted by on November 21, 2011

Business leaders are constantly faced with opportunities they would like to pursue and situations where they must choose between them with care.  There are hundreds and thousands of shiny new ideas and opportunities that glitter and sparkle with appeal, lying in wait to tempt us.  The opportunities may come in the form of a potential acquisition, an investment in a new product or service line or perhaps simply the contemplation of expanding our office space to accommodate the growth we sense is coming soon.  Regardless, such “desirements” are all around us.

Sometimes our wants are founded on legitimate needs and should not be ignored.  Other times we desire things that are self-serving, motivated by pride or by impulse.  These are the “wants” that we might be better off filtering out.  How often have we rationalized making a decision to classify a “want” as a “need”, only to realize that later that we regret the choice and made a mistake?

Process Inputs

Let’s look at some options for an evaluation process to determine if something is a want or a need.  As mentioned earlier, this is a first important step in the decision-making triage process.

To begin, let’s define inputs to be used in the evaluation process.

A simple approach to take is to define each variable with a domain of values ranging from one to five in order to setup a relative scale for measuring each factor.  In this case, a “1” indicates the lowest relative score and a “5” represents the highest possible score, so a ‘5’ would indicate the strongest response possible, but a ‘1’ would not necessarily be scratched off the list.  Borrowing from the software development world, another technique used in evaluating software requirements is called MoSCoW.  The use of MoSCoW was first developed by Dai Clegg of Oracle UK Consulting; in CASE Method Fast-Track:  A RAD Approach.  MoSCoW is a prioritization technique used in business analysis and software development to reach a common understanding with stakeholders on the importance they place on the delivery of each requirement - also known as MoSCoW prioritization or MoSCoW analysis.

The capital letters in MoSCoW stand for:

M - MUST have this.
S - SHOULD have this if at all possible.
C - COULD have this if it does not affect anything else.
W - WON'T have this time but WOULD like in the future.

The o's in MoSCoW are added simply to make the word pronounceable.

A numeric weighting would still be applied using MoSCoW, but it can be done behind the scenes in a spreadsheet in order to focus the process on making rational decisions about each choice.  What we are trying to avoid is having someone assigning ‘5’s to everything out of fear that something will be forever left off the list if it is eliminated now.

Let’s next explore the variables we would use in our evaluation.  We need a variable representing importance and another representing satisfaction.  Likewise, we will also need variables representing expense and time respectively.  To add the dimension of utility and feasibility, we would also need a last variable, perhaps labeling it “viability”.

Other variables could certainly be added, such as market data, industry trends and competitive considerations - but these represent a strong "core" to build from and support a non-bias evaluation.  Now we should define the variables with a bit more description.
Let’s assume that a relative scale will be selected, either (low-1 - high-5) or using a MoSCoW prioritization with associated weights.

For instance, the following scale could be used:

1 - No discernible value
2 - Low
3 - Medium
4 - High
5 - A value that is beyond “high” or “off-the-chart”

Some Terms:

Relative importance to the organization: 
Being completely objective, how critical is “it” to the organization?

Relative satisfaction with the existing state or condition: 
Again, being objective, how satisfied are we (the organization) without “it”?

Approximate relative time to implement or complete: 
If we do “it”, how long will it take to have “it”?  The relative scale is used of course instead on an actual estimate.

Approximate relative expense:
 Is “it” expensive?  Applying a relative scale of expense, would it be a “1”, a “5” or somewhere in between?

Relative viability (taking into account the short and long-term usefulness): 
How long will the utility of “it” last?

Now that we have some variables to work with, we’ll need a formula to use in calculating a score for each decision alternative we want to consider.
The following formula yields a final score that can be used to sort alternatives from highest or lowest (or vice versa):

       (Relative Importance to the Organization)

minus      (Relative Satisfaction with the Existing State)
minus      (Approximate Time in Relative Scale to Implement or Complete)
minus      (Approximate Expense In Relative Scale)
plus         (Relative Viability (taking into account short & long-term usefulness))
Equals     Final Score

The resulting scores, when calculated on a spreadsheet, yield a sortable table that becomes a prioritized list of wants and needs.  While this data may not be enough to fully base decisions upon, it serves as a rational analysis of available options and the process itself is a huge improvement over decisions made on emotionally-based reactions.

Please see "Applying A Strategic Prioritization Process" for a detailed example of the process.

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About the Author:

Joe Evans is the President and CEO of Method Frameworks.  Joe is a published author, frequent speaker and recognized expert in corporate strategic planning. To contact Method Frameworks about scheduling Mr. Evans about an upcoming speaking engagement, visit www.methodframeworks.com/business-speaker or email requests to media_relations@methodframeworks.com.

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