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Initiative Prioritization

Investing in your business is the lifeblood of future growth. Most organizations have plenty of ideas about what investments will propel the business forward. But how do you think about prioritizing and optimizing a group of investments into a portfolio that together will create the biggest return for the business?

When thinking about strategic investments, it’s helpful to look at the candidates through a structured process. Here are some tips to help focus the trade-off conversation with the management team:

Before you start:

  • Determine the prioritization decisioning framework. Not all investments will generate the same return. Similarly, some investments are riskier than others. Setting the framework prior to the discussion allows you to objectively integrate the firm’s business strategy, operational risk, revenue, and expense goals into the conversation.

  • Create firm-wide categories of investments and do an initial allocation of investment dollars to each. This helps to ensure funding and resource allocations are consistent with business strategy and big-picture priorities.

  • Provide a standard business case format. This allows you to easily compare the quantitative and qualitative elements of the proposal. A standard approach allows for apples-to-apples comparisons. It will also help you think through the minimum return threshold for an investment.

  • Understand your key business resources and functional subject matter experts. They will be your scarcest resources – make sure you understand their real capacity to devote to initiatives – especially if they have concurrent operational duties.

  • Determine how the tradeoff conversation will occur. Who has decisioning rights vs input rights within each investment category and across the firm? Spending time upfront documenting authorities reduces the chance of a “food fight” later.

Run each investment category process:

  • Understand what are the most important priorities within each investment category.

  • Review your category proposals. Create a matrix of business case data to sort through your investment candidates. This will allow you to identify the obvious candidates that aren’t going to generate any meaningful value for the organization so you can focus on the more probable proposals.

  • Understand the execution and operational risk if the proposed initiative is funded (or not). What is the likelihood of success and benefit realization? What are the penalties if the project isn't funded?

  • Determine which proposals (that don’t make the cut) you might consider next if investment dollars become available.

  • Consider resource scarcity. If the projects that rise to the top are funded, is there a particular skillset or subject matter expert that will be stretched too thin?

Review the combined category results at the firm level:

  • Have a look across the categories and reaffirm that the right resources have been allocated and that you aren’t leaving a meaningful return off the table in one category at the expense of a less valuable investment in another category.

  • Review the sequencing of investments. Are there interdependencies that have not been considered that could impact execution success?

  • Have the smaller business units received a fair share to advance their business strategy? Does a particular business unit need to wait its turn for the greater good of the company?

  • Can the company absorb the amount of change that these investments create? There is only so much change an organization can manage without the wheels flying off. Have you crossed that line and put execution at risk?

Curve Balls & Pet Projects

  • During the planning and execution stages, there will be surprises. Prepare to be flexible, but also use the process to ensure the organization’s decisioning discipline remains intact.

  • At some point in the process, a business unit might offer to find “extra local funding” to move forward an investment that otherwise would not be funded.

    • Have a fair and objective conversation on the value of that trade-off in the context of the overall initiative prioritizations and available resources to execute.

    • Be prepared to say yes on its merits. And hold the line if the answer is no.

With clear expectations and active communication, the above tips will help to maximize return on investment, manage execution and change capacity, and ensure that the organization has a common understanding of priorities creating shared commitment.


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