CIOIT GovernanceIT-Business AlignmentProject Portfolio Management

Using the Hierarchy of Purpose to Prioritize Your Company’s Projects

Every business makes an effort to track and prioritize projects, but too many of those efforts are hollow. For instance, implementing a project management tool to track projects and compare benefits will do no good if nobody can be convinced to use it. It requires a comprehensive and committed strategy to understand a business’s project portfolio and plan accordingly. In an article for Harvard Business Review, Antonio Nieto-Rodriguez introduces the “hierarchy of purpose” to achieve this aim.

A Structure for the Portfolio

To begin with, here is his proposed hierarchy to prioritize projects and initiatives:

  • What is the purpose of the organization and how is that purpose best pursued? What is the strategic vision supporting this purpose?
  • Given the stated purpose and vision, what matters most to the organization now and in the future? What are its priorities now and over the next two to five years?
  • Based on the answers to the first two points, which projects are the most strategic and should be resourced to the hilt? Which projects align with the purpose, vision, and priorities, and which should be stopped or scrapped?
  • Now that there is clarity around the strategic priorities and the projects that matter most, who are the best people to execute on those projects?
  • … What are the precise outcome-related targets that will measure real performance and value creation? Reduce your attention to inputs and focus on those instead.

This framework establishes alignment and priorities of projects in a deliberate and clear manner. As long as there is integrity in the way these questions are answered, a useful picture of the project portfolio should emerge.

Nieto-Rodriguez offers some additional tips to remember about maintaining the project portfolio. Notably, he finds that the organizations with risk-averse executives are often the ones with way too many projects in progress, because they are afraid to “miss out” on anything. However, the most successful executives typically have a higher risk appetite and focus on a select few priorities, into which they direct the brunt of their resources. Ultimately, taking more risk is the less risky bet in this case, because trying to do too much mostly guarantees that not enough will get done.

For some examples of portfolios and priorities gone awry, you can view the original article here:

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