As organizations approach their portfolios amidst the coronavirus crisis, they need to be careful when choosing the best projects to focus on now. Learn four essential steps to take when prioritizing projects while keeping long-term goals in mind.
Everyone has said it — these are unprecedented times. That doesn’t mean, however, that businesses haven’t had to cut costs or change up their active projects before. It is easy to worry that you might lose momentum on your most business-critical projects during a crisis.
Many organizations now face making the same decisions: Which projects do you ramp up, pause or stop altogether right now? Because we don’t know the outlook moving forward, many companies started reprioritizing projects based on fear — not people or strategy — but that’s not the right way to go.
Risky Business: Prioritizing Projects
It’s challenging to determine which projects to stop or pause when you don’t know what the “new normal” will be. What makes it even more challenging to decide, though, is that there is no shortage of methods for prioritization or portfolio rationalization as it is. Companies can choose to prioritize based on a current short-term goal of saving costs or focusing on risky, innovative projects while everyone else’s attention is elsewhere.
A study from the Harvard Business Review during the Great Recession 10 years ago spouts similar worries. According to the article, companies that historically focused too heavily on cutting costs were only 21 percent likely to pull ahead when the crisis was over. Still, their more aggressive counterparts — those who went after new, risky opportunities despite the circumstances — were only 26 percent likely to fare well afterward.
Focusing on short-term goals will leave companies scrambling when the markets level out again. Leaders have to be ready when things turn around versus being reactive and falling further behind.
Not only that, but focusing on the wrong projects at this time could be detrimental for your teams. Make too hasty a decision, and you may find your team members more stressed at an already stressful time. Or, worse, you might have to lay off some people because the project didn’t pan out.
So, how do you find the right balance, and how do you know which projects are the most business-critical right now?
You need to pick the prioritization method or criteria that matter most to you. And to do that, you must consider your teams’ needs alongside what’s most important both in the short-term and the long-term. Here are four practical steps you can take:
1. Write Down Your Objectives
Specifically, write down both your short-term goals and long-term objectives. You need practical considerations to make better decisions about your projects that account for operational and strategic objectives.
The best way to do that is to consider what you need to do now to survive, what will keep your business running after the crisis is over, and what will instill trust from your teams. For example, do you need to save money right now? Is your long-term objective to become more competitive in your market? How will your decision affect your people?
If you have competing priorities, assign different weights for your objectives to help determine relative value, importance or priority of the criteria to your organization.
2. Map Projects to Those Objectives
What projects are currently in your portfolio, and how do they line up with the objectives you wrote down in step one?
If you have a project focused on creating a new product, it might fit better into your long-term goal, or it could help you improve cash flow right now, depending on the project. To that end, a website update project dedicated to improving user experience could help customers decide to hire you right now, or it could be the perfect project to focus on later.
3. Assess the Risk-Impact Levels
How you feel about the risk associated with each project is entirely up to your organization and your risk tolerance. Regardless, being aware of what the risk is if you drop a project or if your company slows down, is essential.
Consider your people being especially mindful of the impact on people’s lives, emotions and stress levels. And be conscientious of the amount of change you might be presenting. When you don’t consider them, that can cause anxiety for your teams or make them skeptical of your decisions.
Lastly, understand that something that might be dicey for one company might not be as risky for you because of your company culture. For example, if a particular project requires additional skills your team doesn’t have or needs you to shuffle teams, that might contain little risk for your more agile company.
4. Rank Your Projects
Once you’ve assessed the risk associated with your projects, you can rank them based on what’s most important for your business. Evaluate which projects will get your organization ready for when things turn around. Also, make sure the projects that provide strategic value long-term run for as long as possible so your organization can rebound quickly.
When it comes to prioritizing projects, especially in the middle of an economic downturn or other crisis, the best thing you can do is stop yourself from giving in to fear. Fear can give people tunnel vision, narrowing the choices they can make and keeping them from considering strategy.
Instead, consider your short-term goals, long-term objectives, teams’ needs and the risk-impact levels when ranking projects. Then, once the crisis is over, you can continue being proactive and helping your organization grow.