How did your firm choose its last process improvement project? Did you select the biggest problem? The easiest? Maybe you just had a “gut feeling”?
We’ve seen all of these approaches to project selection, but the truth is that none of them guarantee an effective use of resources.
When it comes to improving operational effectiveness, organizations are typically not at a loss for ideas. The difficulty comes when it’s time to choose the best project for execution. What we see most often - particularly in the federal sector - is a gravitation towards tackling the biggest, ugliest problems with the highest possible reward.
As tempting as this approach may be, it’s rarely the most effective use of scarce resources. At first glance, the Return On Investment (ROI) of those complex projects may look attractive. Unfortunately, few leaders consider that these big, hairy problems are hairier because several simpler problems lie hidden underneath.
By uncovering and tackling those simple problems first, organizations will see faster results (in time or cost savings, higher product quality, or reduced risk), and the big, ugly problems will become easier to tackle down the road.
Now, we know what you’re thinking: How can I defend a simple project when it’s up against a seemingly more pressing problem, or the company exec’s gut feeling?
The key is data analysis backed by defensible logic.
You’re probably already familiar with the basic financial tools such as ROI and Internal Rate of Return, but as we mentioned earlier, those can be misleading on their own.
To strengthen your argument, focus on the relationship between two criteria: Benefit and Effort.
- Start by rating projects on a 1 to 5 scale in both areas. A rating of 5 denotes high benefit or high effort.
- Benefits include any direct or indirect impact on time, risk, or quality.
- They also encompass increased ability to satisfy customers and align efforts with your organization’s mission or strategy.
- Effort ratings should encompass project complexity (e.g. number/type of actors or resources required), expected duration (high effort projects are 6+ months), funding required, and project risk (the probability of not succeeding).
- You can rate each of these factors individually and calculate an overall benefit and effort score, or simply identify an overall rating, depending on the level of detail you prefer.
- Plot projects with "Effort" as the x-axis and "Benefit" as the y-axis, using the same 1 to 5 scale. Identify the projects that fall within each of the areas shown in the graph below:
- Zone 1 projects are "quick wins". These are the projects that already have identifiable solutions and require little to no dedicated team effort to execute. These can and should be done immediately by one or two people.
- Zone 2 projects should be executed next. These projects typically take 1-4 months of dedicated project team effort, and require both root cause analysis (to understand key drivers) and thorough measurement/analysis prior to implementation.
- Zone 3 projects may also be executed, but should be planned carefully and generally require 5-6 months to complete.
- Zone 4 project ideas should not be executed.
Don't discard project ideas that fall into Zone 4! As time goes on and Zone 1 projects are completed, Zone 4 projects may become more beneficial to the organization or require less effort - ultimately moving them into a different zone. You should repeat this process at regular intervals to re-identify top priority projects for execution and achieve continuous improvement in your organization. Can a "gut feeling" tell you that?