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Inconsistent and Inappropriate Project Priorities (#5 in the series Problems with Project-by-Project Decision Making)
By Miley W. Merkhofer

A related problem is that the failure to establish organizational project priorities causes inefficiencies in the day-to-day allocation of people’s time. Consider the following example from an article by the Product Development Institute, Inc.

Imagine that you are a member of a project team in a typical organization. Like most project team members, you are working on several projects simultaneously. You are under pressure from all your project managers to make faster progress. Suppose you finish a milestone on an important project ahead of schedule. Do you use the opportunity to get an early start on your next task on this project?

More likely, you turn your attention to one of your other projects. Your day-to-day priorities are based on your desire to minimize the pressures you feel from your various project managers. Although the organization may benefit more from your taking the opportunity to put your important project ahead of schedule, that project is unlikely to obtain the benefits of your early finish.

The point being made by the authors is that work is always prioritized. It is only a question of who does it and how. In the absence of established priorities, people use their own prioritization methods. One common prioritization method is first in first out (FIFO). “Whatever task shows up in my in-box first, I do first.” Another common prioritization method is the “squeaky wheel.” Whoever complains to me the loudest gets the work done first. Others include doing first the work for the manager that you like the best, has the most interesting projects, or writes your performance reviews. None of these methods is likely to result consistently in the best allocation of resources for the organization.

Prioritization is a task for the organization’s leadership. Unless management makes the effort to prioritize projects, the allocation of project resources will be left to individual project managers, and the result will likely not be in the best interests of the organization.

Miley W. (Lee) Merkhofer, Ph.D., is an author and practitioner in the field of decision analysis who specializes in assisting organizations in implementing project portfolio management. He has served on advisory panels for several government agencies and has received grants and research awards for work in the area. Lee is an editor of the journal Decision Analysis.

Prior to becoming an independent consultant, Lee was a Partner of PriceWaterhouseCoopers, where he founded that organization’s capital allocation and project prioritization business practice. Lee is a founding partner of Folio Technologies LLC, a provider of web-based, project portfolio management software.

Lee received his Ph.D. in engineering economic systems from Stanford University. He is the author of the book Decision Science and Social Risk Management and co-author of the book Risk Assessment Methods..

Additional papers on project portfolio management can be found on Lee’s website, www.prioritysystem.com. E-mail: lmerkhofer@prioritysystem.com.

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