“The key is not to prioritize what’s on your schedule, but to schedule your priorities.”
– Stephen Covey, Self-Help Guru
The prioritization matrix is my go-to tool! I use it on just about everything, including my to-do list, major initiatives, projects, potential investments. It is such a simple, yet effective tool. If everyone in an organization focused their efforts on projects and initiatives that were high value or benefit and low cost or effort (i.e., low hanging fruit), the organization would create enormous amounts of value in a short amount of time.
What is a prioritization matrix?
Every strategic leader should use a prioritization matrix to evaluate the best use of the scarce resources of their organization. And, while sometimes you’ll want to quantify benefit or value and cost or effort, more often than not a prioritization matrix doesn’t have quantified numbers, but instead the relative benefits or value and costs or efforts of a portfolio of options or initiatives.
On a prioritization matrix, the vertical axis typically represents the benefit or value of a project or initiative, which can encompass the market potential of new products, cost savings of systems, sales lifts of different marketing initiatives, etc. The horizontal axis typically represents the cost or effort to make the project or an initiative a reality.
Why is the prioritization matrix important?
In decision making, it is useful to compare the relative benefits and costs of different potential initiatives. While a cost-benefit analysis can be done, putting a set of options on a prioritization matrix allows a group of people to quickly debate the relative positioning of the benefits and costs of different options. In my experience, utilizing a prioritization matrices makes it quicker and easier to align people.
How do you assign value?
You can determine absolute or relative values. Absolute values can come from a cost-benefit analysis, reports, experiments, estimation, etc. Relative values should be assigned utilizing brainstorming, debate, or the Delphi method.
How do you assign cost/effort?
The effort axis can represent cost, capital, ease of implementation, people, timing or other effort levers. Once again, you can assign levels of effort on an absolute or relative basis. If you have actual data and analysis, then use the data to plot the options. You should determine relative costs through brainstorming and debate.
The four quadrants
Here are some key thoughts on the four quadrants of the prioritization matrix.
Low hanging fruit – higher value, lower effort
Prioritize the low hanging fruit projects and initiatives first. They provide a lot of value and don’t take much effort to execute. In most situations, if you look enough, you will find a lot of low hanging fruit that will allow you to create significant value in a short amount of time.
Big bets – higher value, higher effort
Big bets are those looming initiatives that you know the organization has to tackle, but the effort will be substantial. Large systems integrations, new product lines, new channel development are the types of projects that are big bets. You want to balance your portfolio of initiatives with primarily low hanging fruit and some big bets.
Maybes – lower value, lower effort
We all know the maybes. They are those potential projects that always get pushed off for some higher priority. You should scrutinize and evaluate “maybes” to see if there are ways to increase the value of maybes to push them into the low hanging fruit quadrant.
Not worth the effort – Higher effort, lower value
These potential projects, if green-lighted can damage an organization by forcing the organization to expend a lot of effort on something that won’t bear much value. The opportunity cost of focusing on these projects versus a lot of low hanging fruit projects can be substantial.
DOWNLOAD THE PRIORITIZATION MATRIX POWERPOINT WORKSHEET
To create a prioritization matrix, download the free and editable Prioritization Matrix PowerPoint Worksheet.[sociallocker] [/sociallocker]