“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, and 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 impact and low cost (i.e., No Brainers), 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. On a prioritization matrix, the vertical axis typically represents the impact, 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. And, while sometimes you’ll want to quantify the impact and cost, more often than not a prioritization matrix doesn’t have quantified figures, but instead the relative impact and costs of a portfolio of options or initiatives.
Why is the prioritization matrix important?
In decision-making, it is useful to compare the relative impact 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 prioritization matrices makes it quicker and easier to align people.
How do you assign impact?
You can determine absolute or relative impact, value, or benefit. Absolute costs can come from a cost-benefit analysis, reports, experiments, estimation, etc. Relative costs should be assigned utilizing brainstorming, debate, or the Delphi method.
How do you assign cost/effort?
The cost axis can represent cost, effort, capital, ease of implementation, people, timing, or other types of costs. 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.
No Brainers – higher impact, lower cost
Prioritize the “no brainers” or low-hanging fruit projects and initiatives first. They provide a lot of impact and don’t take much cost or 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 impact, higher costs
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, and new channel development are the types of projects that are big bets. You want to balance your portfolio of initiatives with primarily no-brainers and some big bets.
Maybes – lower impact, lower cost
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 no-brainer quadrant.
Forget about it – Higher cost, lower impact
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 no-brainer projects can be substantial.
DOWNLOAD THE PRIORITIZATION MATRIX POWERPOINT WORKSHEET
To create a prioritization matrix, download the free and editable Prioritization Matrix PowerPoint Worksheet.