"We need to prioritize better...", a phrase often heard when costs increase and resources become more constrained.
Ah, so it's that simple?
Prioritization means arranging or doing things in a particular order, while prioritization is the process of doing so. It’s obvious what it is, but not how to do it.
Everything we prioritize is a bet, meaning we make an informed decision to allocate our resources to one thing over another, despite uncertainty.
This is necessary because there will always be more work than there is capacity to execute. No matter how many talented people you have, you’ll never have enough to do everything. If everything is important, then nothing is important.
Unfortunately, there’s no magical formula for how to prioritize, and it’s rarely as simple as a mathematical exercise.
It's a constant balancing act between running and improving what already exists, pursuing new strategic bets, and weighing short-term gains against long-term impact.
There are many frameworks and techniques, but for me, it boils down to a collective judgement. A discussion between relevant disciplines, key people, and stakeholders.
Evaluate ideas in relation to each other. Compare and contrast. Which of these do we believe will have the biggest impact on our strategy, customers and business? How much effort and resources do we think it will require from us? Can we afford it as things look today? What are the consequences of not doing it? How confident are we in our assumptions?
To prioritize, we need filters. This is where strategy and goals come into play. What is it that you want to achieve, and what is the strategy to get there? If this is unclear, the prioritizations will suffer.
Without a clear sense of direction, it becomes difficult to determine what tasks are most important.
Where does it get difficult? If you want to do more of something, you must do less of something else. Pausing or stopping ongoing initiatives is crazy hard. It’s always easier to spin a story explaining why continuing is better than stopping.
Our cognitive biases and lack of clear thinking doesn't help. Prioritization has a human element. It's emotional. Our feelings take over.
We prefer to keep things the way they are.
We feel uncomfortable with loosing what we have. When something we like is (or threatens to be) taken away, we often value it higher, aka Loss Aversion.
We have a tendency to continue because we have invested resources in it, such as time, money, or competency, aka Sunk-Cost Fallacy.
The scarcer common resources become (money, capacity), the more territorial behavior we get. It's a self-preservation mechanism inherent in all of us.
So what can we do?
First, widen your options. Downgrading one of many is easier than if you only have one or two ongoing. With only one option you become too invested. You take it personally.
You ask yourself "How can I make this work?" instead of "Is there a better way? What else can we do with the same time and money?"
With a portfolio of options and activities, it's easier to step back and look for patterns. Which initiatives repeatedly create value? Where are the dependencies and synergies?
Second, shift your perspectives. It's very hard for us to see the world from outside our own perspective.
An example is the thought exercise Andrew Grove went through with Gordon Moore before committing to making a massive change in Intel's business: "If we got kicked out and the board brought in a new CEO, what do you think they would do?"
When we think of our colleagues or peers, we see the forest. When we think of ourselves, we get stuck in the trees. Ask yourself, "What would I tell my colleague to do in this situation?"
One of the best tools to get an outside view to improve your prioritization is to get other people's perspectives. But don't share your opinion first. Provide what the person needs to know to give valuable feedback, like what you try to accomplish, and nothing more.
"What would be your process for prioritizing if you were in my shoes? How would you go about doing it?"
Third, set, in advance, guardrails and "tripwires" to snap us out of autopilot. These are signals that make us reconsider a prioritization. Signals that tell us when to jump and take action.
An artificial deadline is one example of a tripwire. Other examples include performance indicators, budget caps, behavioral patterns, and time-based reviews or check-ins.
Fourth, start talking about the opportunity cost. Limited resources always have alternative uses. Opportunity cost is what you give up when you make a choice. It's the thing you can't have because you picked something else.
The cost of using a limited resource for a specific activity, can be measured as the value or opportunity lost by not using it for a better alternative.
Opportunity cost can challenge the comfort of the status quo and make the cost of inaction more visible. You can highlight that continuing a low-value activity means sacrificing higher-value opportunities.
You can shift the narrative from "stopping an activity" to "investing in something better."
How do you prioritize?
