Prioritizing and Selecting Improvement Opportunities
Prioritizing improvement opportunities include prioritizing and selecting process excellence improvement and innovation opportunities are the step that follows the identification of opportunities phase.
A proper prioritization and selection mechanism should be implemented and regularly used to allow for the objective selection of opportunities that make the biggest impact on the organization and its stakeholders. Such a system ensures that all opportunities are treated equally allowing for a fair screening and avoiding a biased “loudest voice gets its all” outcome.
Leaders know that better prioritizing improvement opportunities return huge dividends down the line. While leaders know that a good prioritization and selection system contains common good business practices, it remains astounding how few leaders stick to it. It is often forgone for the sake of time or a reluctance to invest a bit of effort.
It is most often the case that opportunities are in abundance but resources are in scarce supply. Therefore it makes sense to prioritize resources and align them behind delivering opportunities with the biggest bang for their bucks.
In addition, a prioritization and selection mechanism ensures that opportunities are managed in a coherent sequence avoiding overburdening the organization. Frustration is minimized, focus and alignment increased and project bottlenecks are avoided.
6 Step The Prioritizing Improvement Opportunities and Selection Mechanism
The previous article dealt with identifying opportunities, a step in which the entire organization participates. The identified ideas are brought into the ‘Hopper’, so-called at it to is a filtration system.
Prioritizing improvement opportunities Step 1: List Opportunities
Opportunities identified are listed down the left column of the Hopper.
Step 1a: As much information as is available to support each opportunity idea is made available. The immediate columns to the right of the listed ideas can be used to add key information and are labeled e.g. ‘Additional Information
Prioritizing improvement opportunities Step 2: Prioritization and selection criteria.
Leaders of the organization decide on the criteria to be used against which each opportunity idea will be rated and filtered. This is a crucial step in which leaders must ensure opportunities are correctly filtered to support their short-term and long-term objectives. All opportunities throughout the organization should be consistently prioritized and selected using the same criteria.
Typical criteria may emanate from the organization’s key performance indicators measuring business financial results, opportunity cost or investment, probability of success, time to deliver, safety, etc.
Prioritizing improvement opportunities Step 3: Prioritization and selection criteria weightings
Still, the task of the leaders are deciding, on a scale of 1 to 10, the weighting of each criterion. Not all criteria are equal. For example, delivering on the organisations strategic objective may have a higher weighting than short-term financial impact. Or safety may be assigned the highest weighting.
Prioritizing improvement opportunities Step 4: Scoring each opportunity against the criteria
Using a scoring system of 9, 3, 1, 0, allows for a high degree of discrimination between the top and other opportunities. For each criterion, the scores should be assigned a meaning. For example when it comes to benefits 9 = >$10M, 3 = $5M-$10M, 1 = $1M-$4.9M and 0 = <$1M. Take care, some criteria may require what seems to be inverse scoring.
All stakeholders that have knowledge of the opportunity and process in which it occurs should participate in the scoring session. This often requires discussion and mediation.
prioritizing improvement opportunities Step 5: Total and rank the scores
Multiplying each score with the criteria weighting and summing the opportunities scores will result in a final score for each opportunity. Rank the Total column from highest to lowest.
prioritizing improvement opportunities Step 6: Red Line
The ‘red line’ is the initial cut-off for the top opportunities. This is drawn where the first sharp drop-off in the total score appears. A histogram is a good tool that offers an easy visual reference to identify the drop-off.
Once the red line is drawn leaders should give it a sanity check to ensure logic has prevailed and all makes sense. If not, rescoring may be required.
Tips and comments on the Prioritizating Improvement Opportunities and Selection
Once the prioritization and selection mechanism is implanted it would be treated as an ongoing process and not a once-off or annual event. A quarterly review of the Hopper is typically a good interval. In the meantime opportunity projects may have been completed freeing up resources to take one newly prioritized and selected opportunity. New opportunities may have come into the Hopper and existing ones may fall down or move up the list when reviewed against current circumstances.
The Hopper can exist at multiple levels within an organization. Only when common criteria and weighting are used does it provide the most value in terms of comparison and escalation upwards for additional company resourcing.
When the leaders decide the change one or more prioritization and selection criteria all opportunities in the Hopper need to be reevaluated against it.
The Hopper is not a repository of ongoing opportunities. Once selected and resources assigned, opportunities should be removed from the hopper.
All innovation and improvement opportunity ideas must be added to the Hopper. No subjective pre-filtering should be allowed in any way.
If the solution is already known, chances are that it is someone’s job and not an opportunity needing improvement or innovation resourcing.
Do not waste time second-guessing scores, this would result in frustration and abandoning a very worthwhile process.
On selecting the opportunities, Sponsors or Champions are given an opportunity to add details during the next step, defining or chartering.
Click here to revisit the previous article that delves into Identifying Process Excellence Opportunities
Click here to read the introductory article Doing the Right Things.
Some of our articles related to doing the right things include:
10 Crucial Business Process Management Building Blocks
Identifying Process Excellence Opportunities
6 Steps To Prioritizing Improvement Opportunities
Defining Improvement Opportunities