Prioritization

It is very tempting to start many projects simultaneously, but this leads to multiple projects “in progress,” but in reality, none of them are ever completed. The Consolidator Operating Framework (COF) adapted the philosophy of the Kanban methodology: “Stop Starting and Start Finishing.” But in order to execute projects one at a time, one should understand which one is better to begin with. The reader may say: “I am a master of multitasking!” But it is simply not true. Multitasking is a myth and it does not exist.

We adapted a methodology that is frequently used in the Scaled Agile Framework (SAFe) by multiple enterprises as a part of the Agile Transformation. This methodology is called Weighted Shortest Job First (WSJF). The reason why we chose this technique is because it allows prioritization of multiple initiatives in a matter of a couple hours in a very objective way.

Weighted Shortest Job First (WSJF) is a way to understand what is the most important for the organization now, so it can be started and completed.

It takes into account the Cost of Delay for each particular initiative and divides it by the duration that it will take to execute on the task.

Cost of Delay is a combination of the Business Value + Time Criticality plus Risk Reduction and Opportunity for the organization). This is not a rigid formula and can be modified by the executive team as a part of the workshop.

This is not a rigid formula and can be modified by the Executive Team as a part of the workshop. A common Cost of Delay in consolidation is calculated based on how many areas of the strategy the initiative covers. Does the initiative when executed, affect the Top Line, Bottom line, Scalability and Experience? The team needs to put a value between 1 and 4 on each initiative and then decide how critical it is for the organization (1-4) and how big of an opportunity it is for the organization (1-4). This formula can be incorporated into an Excel spreadsheet to calculate the point totals for the team.

Duration is usually estimated by the team or can have a formula which adds more objectivity to the process. We recommend assessing whether the process is Centralized or Decentralized, with Decentralized processes being (4) since they involve hospitals and Centralized being (1) since they do not involve change at the hospital level. The formula is added to the Excel sheet.

In addition, we recommend determining whether the initiative has already established the Process, Policy, and Systems which it is to run on. People or Competency within the organization will own the initiative development as well as further process execution. If you have any/all of these items, the number should be lower (1) since there will be less duration needed for the development of this initiative.

So the full formula may look like this:

WSJF = Cost of delay(Business Value + Time Criticality + Opportunity) / Duration (Centralized or Decentralized + (Process + Policy + System + People)

Example: We want to create a new process for hospital level Inventory Management Process:

Cost of Delay: 

• Business Value
  • This process will not affect the Top Line (0)
  • This Item will improve the Bottom Line  (1)
  • Once developed, this initiative will improve Scalability (1)
  • Once developed, this initiative will not affect the experience of the staff (0)
• Time criticality
  • This is a part of our thesis for synergies post-acquisition, and we should have this process established soon. Although we are now focusing on deploying the first first tranche from our investors and working on building an acquisition pipeline, this is important for the future. We will give it not a full (4), but (2) on Criticality.
• Opportunity
  • Once implemented, this initiative is expected to add 2-4 points to our EBITDA, so the opportunity is significant (4).

Total Cost of Delay is: 0 + 1 + 1+ 0 + 4 + 2 = 8

• Duration
  • Inventory management has to be deployed at the hospital level and will require resources and well-established processes and training. Therefore, it is a Decentralized Initiative (4).
  • We do not have the process yet (4).
  • There are no organization-wide policies (4).
  • We do not have software that manages inventory (4).
  • We have an outside consultant that will create this process, but we need to have a department that will take over the process and run it at the hospital level, so we will give in a little less than a full (4), but we still have to hire the head of the department. Therefore, we will give it (3).

Total Duration for this initiative is: 4 + 4 + 4 + 4 + 3 = 19

Now we can calculate the priority for the Inventory Management Process among other initiatives for this upcoming quarter (or year):

Weighted Value for this Initiative is Cost of Delay / Duration = 8/19 = 0.42

Once this value is stacked against other initiatives using Excel, you can determine the precise value of this initiative for the organization which will suggest the priority for the executive team.

There is a significant risk to have multiple projects in progress and none fully completed if the proper prioritization technique is not applied to all the initiatives or Rocks for the quarter.Lack of a clear prioritization technique is a very common reason for Potential Conflict.