The largest investment for any company is their investment in people and most organizations do not have a well of resources that they can draw upon for new projects. As organizations continue to get squeezed by budget cuts and increased demand to implement strategic change they must look for better and more informed ways to make the most of their limited resources.

As part of making readers aware of the portfolio project management process last month we discussed using improved resource management processes to determine and understand the organization’s capacity for projects.

Once you know how much capacity is available the next extension of your portfolio project management process should be the establishment of project selection and prioritization processes. These processes combined with effective resource management processes helps ensure that all team members understand what the priorities are and eliminate resources spending time on work that is not driving the organizations’ strategy.

Lacking a project selection and prioritization process manifests an environment where priorities are made at the desktop. Not the optimum place for project prioritization.

In a typical organization a project is ‘kicked-off’ as a separate entity and management assigns resources without any visibility into the workload of the assigned resources and/or the other projects currently underway throughout the organization.

What results is a situation where resources have their ‘regular’ job to do and are assigned on average to 3-5 projects. Because no priorities have been established or the culture is one in which everything is a ‘priority one’ each resource decides each day what work they will accomplish creating the following scenarios.

John gets in at 8:30 and decides if he should begin work on Mary’s project because she took him to lunch yesterday? Or should he complete an activity on Bob’s project because Bob will be doing John’s performance review next week? Or should he do some research on Tina’s project because it is a new technology that is really cool?

Just as John is about to make a decision, Don, the VP of Marketing stops by John’s cubicle and asks how the mail merge is coming along for the Glitz II Program? John immediately responds that he is going to finish the mail merge in a day or two.

Twenty minutes later, Harry, the project manager for the process improvement project stops by and asks when the workflows for the ‘as-is’ state of the accounts payable process will be completed. John switches gears and puts aside the marketing project and picks up the process improvement project.

Think about project teams in which each team member is going through the same process as John; deciding each day what will be worked on based upon how it impacts John the individual or based upon which management figure either has more clout or was the last to appear at John’s doorstep.

Now consider a typical project team of a few business users, a marketing person and persons from IT and finance. The business users complete the requirements for a new system interface and deliver it to the IT member of the team to begin coding and testing. The IT member indicated that the task would take approximately 3 days.

The problem is the IT person does not begin that work for two weeks. From a project management perspective we have just taken a 3 day task and made it a 13 day task. If we extrapolate this occurrence over the length of a 6 to 12 month project you can begin to see why project target dates are usually missed and project stakeholders become disappointed with project outcomes.

The lack of clear priorities from the top causes project activities to take longer than expected which causes a ripple effect that causes projects to complete later than expected.

Management screams that nothing is getting done, project costs continue to mount and new projects get stuffed into the pipeline. Of course the new projects are ‘priority-one!’

In Robert S. Kaplan’s and David P. Norton’s book, “The Strategy-Focused Organization,” they state that “A mere 7% of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.”

If your company is like many other small and mid-sized businesses, your employees represent both your organization’s biggest line item expense, and your most valuable asset. This means your company’s productivity and ultimately its profitability depends on making sure all of your workers understand more clearly what the priorities are so they can remain focused on the company’s most important goals.

To drive success, executives must move away from ad-hoc setting of priorities and allocation of resources and towards a strategy that:

• Intelligently compares initiatives across a set of strategic imperatives and dimensions.
• Prioritizes initiatives across the organization based on available capacity.
• Effectively allocates resources to drive successful execution.

Last month we introduced the relay runner work ethic to complete strategic projects as soon as possible. But if that work ethic is not coupled with project selection and prioritization processes you just may have your best sprinter waiting around for someone that he/she can pass the baton to.