Overcoming Strategic Prioritization’s Toughest Challenge: Human Nature

It’s hard to argue against the power of prioritization in achieving your strategy. If you really need to get something done, you focus your efforts and resources on that objective. Focus produces results.

The opposite of focus is dilution. The more you have to do, the more you thin out your efforts and resources. Dilution kills results.

Most agree that focus is important and prioritization is essential. Yet few organizations prioritize well. Why? Because it’s very difficult to do. First, strategic prioritization requires comparing apples to oranges and making decisions with imperfect or incomplete data. It requires executives to set aside their own ideas and pet projects for the benefit of the organization.

There are also esoteric human nature forces working against it. Even the benefits of prioritization are hard to define—how do you measure the benefit of not doing something? Yet McKinsey found that organizations that invest in strategic prioritization deliver 40 percent more value.

The following article is meant to help senior executives, as well as those they entrust to lead their strategic portfolios, to prioritize their efforts.

This article is abbreviated from an IPM white paper, “Prioritization’s Toughest Challenge: Human Nature.” Download the white paper →

Human Nature vs. Prioritization

Prioritization is like healthy eating. We may know it’s the right thing to do, but we don’t always do it. And, as with eating a healthy diet, there are many human nature tendencies that work against prioritization. We don’t always make the decision to do it or have the discipline to stick to it. And one slip doesn’t feel like much, but they add up over time.

While there are many biases that affect prioritization, we’re going to focus on three of the most impactful: planning fallacy, the reluctance to say no, and the desire for control.

Planning fallacy

Planning fallacy is our tendency to underestimate how much time things take to do. We oversimplify, neglecting to consider obstacles or delays. According to the Freakonomics podcast “Here’s Why All of Your Projects Are Always Late—And What to Do About It,” projects can take 64 percent longer than you think they will. We plan to succeed, not to fail. We idealize the situation and don’t consider procrastination or task-switching.

Reluctance to say no

Another human nature bias—and challenging hurdle to strategic prioritization—is that we don’t want to say no. Most people don’t want to be the “bad guy” and turn somebody down. They especially don’t want to deny an idea with merit. And effective prioritization almost always means turning down good ideas.

We don’t want to give up control

Strategic prioritization requires management to put the organization’s needs above their own and to make decisions as a team. People don’t like to give up control in this way. This is especially true for executives, who often attribute their success to date to their decision-making and direction. It’s natural to believe that good outcomes are our doing and negative outcomes are due to other people or factors. This in turn can drive overconfidence and thinking our ideas will be more effective or more vital to the business than others’ ideas.

Download the complete white paper for real-world examples from experts and clients IPM has worked with, as well as a glossary of biases that may negatively impact prioritization. →

What Happens if You Don’t Prioritize?

When you don’t prioritize, you get resource dilution. It is the typical state of most organizations. The opportunity cost is difficult to calculate, but enormous.

When a company has too many priorities, or none at all, people are busy working on everything but not making real progress on anything. Strategic projects don’t get done, don’t get done as quickly as they could, or aren’t sustained. You simply cannot do it all.

In a diluted organization, people are overworked and often exhausted. Employees are forced to multitask and task-switch, which only further reduces their productivity. With too much to do, you spend time firefighting rather than doing valuable work. You can ask people to go above and beyond for a short and defined time period. But overwork over time can cause employee burnout, health issues, depression, heavy drinking, and impaired sleep and memory. All of these can lead to absenteeism, rising insurance costs, and staff turnover, which only worsen your resource constraints.

When organizations aren’t aligned, executive leaders compete with one another for the same resources. Worse, the organization might be working on competing strategies.

In the worst-case scenario, staff loses confidence in leadership. The inability to accomplish strategic initiatives also leads to stagnant business, unhappy customers, and loss of market share to competition.

Getting Prioritization Right

While IPM’s experience indicates that many companies have little or no prioritization process, some organizations have attempted it. For example, they may define their strategy and insist that any new projects have some tie to the strategy. Or they have a long spreadsheet of projects and force-rank them by some criteria. These are good steps in the right direction, but they often fail.

Download the complete white paper for typical approaches companies take to strategic prioritization and their typical downfalls. →

Good prioritization starts with good fundamentals, layers on advanced approaches, and overcomes human nature biases.

Good fundamentals

These include enforcing alignment to the strategic goals, an intake process that includes a business case and project charter, and including executive stakeholders in the effort.

Build on the fundamentals

IPM has found the most effective prioritization decision-making framework across industries and company sizes is a multi-criteria weighted scoring model. This model defines appropriate criteria for importance and complexity, then weighs them on a 100 percent scale. The benefit is increased objectivity, in that all projects are scored on the same criteria.

A link to the strategy is critical, as is involving the senior leadership in the design and application of the weighted scoring model.

Confront the human nature forces working against prioritization

No matter where you are on your prioritization maturity level, there are human nature forces to contend with. Acknowledging that they exist is a good first step. You can’t solve a problem that you don’t confront.

Make a commitment as a leadership team and form an influential coalition to block attempts to circumvent or subvert the prioritization effort. Defend against overoptimism with accurate data and accountability. And most importantly, learn to say no (or not yet) to good ideas so you can focus on the best.

Download the complete white paper for more details and real-world examples about overcoming the human nature biases working against prioritization. →

Conclusion

Companies that adopt strategic prioritization—and manage the human nature factors that challenge it—are able to focus the entire organization on the work that is most critical for success. At the same time, they reduce organizational conflict and exhaustion.

There will be objections to developing and maintaining a prioritization process (see the white paper for examples and ways to overcome them). But if you make a choice to do so, you may become one of those healthy organizations that deliver 40 percent more value than those that don’t invest in strategic prioritization.

Download the white paper, “Prioritization’s Toughest Challenge: Human Nature,” for solutions that include advanced approaches and ways to overcome the human nature elements that make prioritization challenging. →

Authors:
Greg Kain, Managing Director – Healthcare
Tanya Roberts, Senior Director, Project and Portfolio Management Services
Scott Grzesiak, Executive Vice President of Strategic Growth
Integrated Project Management Company, Inc.

Services: Project Portfolio Management, Strategic Realization
Industries: Life Sciences | Healthcare | Consumer Products | Industrial Products