Most companies aim to grow. These days, however, capacity issues mean that poor prioritization can lead to fairly negative consequences. By capacity, we mean the sum of an organization’s financial, physical and human capabilities. Currently, each of those three aspects of business capacity is in trouble: skilled labour is hard to come by; inflation is making financing more expensive to access; and major supply chain breaks are affecting our economy and our lives. Yet, despite this situation, many organizations are still pursuing growth at all costs.
Operations that are struggling to deliver. Projects that are behind schedule. A shortage of human resources. Budgets overruns. Sound familiar?
Many companies are turning to digital transformation to address these issues, the byword being “hurry up”. This approach has a whole lot of adverse consequences: cost overruns, impacts on current operations, exhausted teams and results that fall way short of expectations.
I hear such stories every day from entrepreneurs, executives and managers. Even before the current labour shortage, I was giving presentations on capacity management, including one entitled “Stop squeezing the lemon!”, because if you keep squeezing the lemon once it is out of juice, all you get are the seeds. See what I’m getting at?
In order to grow, we must sell more and produce more, which requires a workforce and access to goods and services, among other things. To meet current challenges, our companies also want to modernize, automate processes, and so on, which also requires more capacity. Without realistic prioritization and timelines, there is a high risk of things going wrong. And the consequences? For instance:
In a June 2021 article,1 Tech Grid reported that a PwC study of over 10,640 projects found that “a tiny, tiny portion of companies – 2.5% – completed 100% of their projects successfully. The rest either failed to meet some of their original targets or missed the original budget or deadlines.” Even more alarmingly, “these failures extract a heavy cost – failed IT projects alone cost the United States $50-$150B in lost revenue and productivity”. The same article reveals that “a Gallup survey found that 17% of IT projects can go so bad that they can threaten the very existence of the company”.
It’s easy to think that the secret of success can be found in a methodology (like Agile, Scrum or Devops), or in a project management software. Or that adding consultants will solve the problem. It’s also easy to believe that better scope definition, clear, known and shared objectives or tight management of the initial scope can all lead to success.
While all of the above factors certainly help to improve the chances of success, the key success factor was pretty well summed up by the author of a December 2020 Forbes2 article: “All of our efforts to avoid technology project failures can be simplified if we focus primarily on the humans who plan, fund, and execute technology projects.”
Realistic prioritization requires that personal bias be removed from the process, that each project’s contribution to management’s objectives be measurable and guide project selection, and that the capacity to complete projects without harming operations be a key deciding factor.
By individual bias, I mean an individual’s hope or desire, and an individual’s power to put his or her ideas above those of others.
By contribution to objectives, I mean that decisions are made based on a cost-benefit analysis of defined, comparable and measurable corporate criteria/objectives that have been specified by senior management based on the directions in which they want to take the company.
By capacity, mostly what I mean is the capacity of internal teams to participate in the projects and integrate the changes without putting operations at risk. It’s all about finding the right balance. On that subject, my colleague has a post that suggests various ways to free up capacity.
If we are to grow successfully in the current environment, we must not underestimate the importance of proper prioritization. If you are interested in learning more, I’ll be giving a talk on the subject on September 20, 2022, at ACMP Quebec. Details to come in August.
Co-founder, President and Strategic Consultant