StrategyDriven

An organization’s mission defines its purpose for being.  Making the mission measurable and then prioritizing those measures helps create a sense of where the organization should focus its efforts.  However, prioritization at this level does not create the clarity needed for individuals making resource allocation choices between their day-to-day activities, especially if the activities all serve the same mission measure.

Categorically prioritizing the organization’s major ongoing activities helps focus efforts on the twenty percent of activities that tend to offer eighty percent of the organization’s value.  Activity categorization starts by identifying the value adding products and services the organization provides.  All activities uniquely related to the creation of an item are placed in an activity category together.  Excluded from these activity categories are the common, supporting processes such as human resources and finance which are grouped together and labeled as supporting processes.  Next, a simple, relative prioritization scheme is created, often having three to five priority levels.  Each activity category, except that of the supporting processes, is placed within the relative priority scale in order of the value provided by the product or service represented.  The most value adding item is assigned to the highest priority and so on; with the least value adding item assigned the last position in the lowest priority level.  The resulting prioritization list is then broadly communicated and reinforced; shaping resource allocation decisions at all levels of the organization.

It must be remembered, however, that scheduling is as much of an art as it is a science and that this priority system should be used as a general guideline and not as an etched in stone rule.   At times, due to resource restrictions, a company may better realize needed value from performing lower priority activities than would be received from performing higher priority activities having significantly greater resource requirements and/or longer time horizons.  In all cases, managerial judgment should augment and, as necessary, supersede any pre-established priority system.

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