How to Prioritise Work
Every business leader is invariably faced with the fact that there are more things to do than the time available to do them. It is also true to say that not everything to be done has the same level of priority. This article makes suggestions about how to prioritise work to have the greatest positive influence on your business. This article is Blue Belt. The introductory Yellow Belt article is on this link.
Why Prioritise
Business owners always have more work they could do than they can do in their available time. Hence the need to have a prioritising routine that offers a systematic approach to choosing “What’s Next”.
This article is self contained and can be applied to any situation requiring you to make a choice. It is an essential stage in the 12Faces GamePlan strategy for working through quarterly projects. It can be applied to the choice of the quarterly GamePlan and to the several Sprints within any GamePlan. See more on GamePlans here. It is also useful when deciding on which of your systems need to be incrementally improved using our Ratchet System methodology
This system can also be used when considering innovation and start-up aspects to your business. In these cases, the system can help to work out which innovations are the ‘best’ for your business to experiment with into the future.
This system is not well suited to planning repetitive, routine work like (e.g.) billing. To manage those processes, you can use tools like Standard Operating Procedures (SOPs).
The What's Next Cycle
In order to get good at anything, you need a replicable cycle, or routine, so that you can perfect the process rather than starting from scratch every time.
The 12Faces What’s Next Cycle steps are:
- List Candidates: collect all the possible activities for the next major project in a list.
- Apply Selection Rules in declining order of importance: we introduce a list of selection tools in this article that can be applied to each activity in the candidate list. Normally, you would do the activity meeting the highest priority selection rule first.
- Size the Project to fit available resources: you have a finite amount of resources like time and money. You want to take a bite out of the most important candidate task that matches the resources available.
- Quantify the Goals: you, and more importantly, your team need to know where you are heading with the chosen task and what qualifies as acceptable outcomes. You can set SMART Goals for the business as a whole and , KPIs and OKR, for individuals, as ways of showing your expectations.
- Rinse and Repeat: as with any routine, you use it more than once. In the process you get better at executing the routine and can improve any flaws in the process based on experience.
Building a Candidate List
The list is composed of projects that are worth considering to fill the next available work interval.
There is no limit to the length of the list but, overly simple or low relevance items can be excluded if that are never going to be the item selected.
You may want several candidate lists that match up to the size of the next project. In our GamePlan system, you would have one for the next GamePlan selection and possibly one each for several Sprints within the current Gameplan.
The sources of candidates are many and varied. Ideally, all your staff are involved in the process. Frontline workers have a much better idea of the limitations in their workspace than senior managers so it makes perfect sense to tap into their experience. It also gives them some ownership of the process when they get to carry out remedial work in their area.
Gut Feeling
The most highly tuned “tool” that an experienced business leader has is their “gut” feeling. There is a lot to be said in favour of listening very carefully to these signals. Perhaps one thing to keep in mind is that, if you are currently experiencing a problem, it may have been your “gut” that got you there in the first place.
Your gut relies largely on experience. If you are a new business, or pursuing a new line of endeavour, your gut may not be very helpful as it does not have much experience to go on.
Brainstorming
One step, beyond using just your own intuition, is to have a brainstorming session with several people. If you do this, try to mix up the:
- Level of experience
- Types of professional experience
- Diversity of age and gender
When doing brainstorming sessions, any business leader needs to be aware of the impact the HiPPO effect has on decision making. Essentially, if the most senior person in the room speaks first, or often, less senior people may tend to follow that lead. The most important aspect of brainstorming is to get a wide variety of opinions before you start to cull them.
When brainstorming, one also needs to be careful of achieving what is called “the average effect”. In any group there will tend to be a few opinions on either end of the spectrum and the majority of people will be in the middle. It is often true to say that outlying opinions can offer break through solutions as they are “out of the box”.
Feedback from Reporting Systems
Some of your reporting systems and external professionals may draw you attention to evolving issues. The bookkeeping system and your accountant may report sliding margins and cash flow problems.
Our TrendBoard system shows evolving trends on a monthly, quarterly and annual basis on 16 different measures so you can catch any deterioration as quickly as possible.
There will also be regulatory systems like safety that will offer suggestions to the list.
Monitoring Systems
There are aspects of your business that you probably look at each month. Examples of these are;
- Information flowing from your accounting processes
- Information flowing from your sales monitoring process
- Staff performance measures like KPIs and
- other regular monthly measurements that can generate information that you can use as guidelines for your ratchet candidate list.
For convenience, we call these types of measurements Metrics. Read more on this link.
Essentially, anything that is acting unfavourably is likely to be an obvious entry to your candidate list.
To make identifying adverse movements easier, we encourage you to have trends associated with your monthly data and display them in a visual format. This allows you to see at a glance when something is operating below expectations and/or trending in an unfavourable direction. We write about this in greater detail when discussing our software tool for this purpose, TrendBoard.
You may have other monitoring tools that are useful for showing unfavourable situations. These can become candidates to be remedied. There are a number of ratios that are useful for this purpose. Typically, they might include;
- Gross Margin Ratio: measures the efficiency of your production system.
- Labour to Revenue Ratio: measures the Labour cost per dollar of Revenue.
- Overhead Costs to Revenue Ratio: measures the level of your Overhead Costs to each dollar of Revenue.
It is very easy in a busy workplace for some of these ratios to move in unfavourable directions without you noticing without some type of recording system. For this reason, ratios like this are built into our TrendBoard product .
Balancing Your Business
We group the skills necessary to lead a successful business into 12 categories. That is the origin of our brand name, 12Faces.
Six relate to the business. Weaknesses in any of these areas will damage your business (remember the adage “a chain is no stronger than its weakest link“).
- Revenue creation like sales, marketing, pricing, product range
- Operations like workflow, variable costs, inventory
- Overheads like office costs and R&D
- Systems like IT and accounting
- People issues like motivation, hiring and
- Plan & measure, finances, planning and monitoring
The other six relate to you as Owner and your Team. In other words they apply to the individual, not the business as a whole. We offer Continuing Professional Development (CPD) to improve personal skills.
- Decision making skills
- Self management like time management and working efficiently and effectively
- Leadership of and by staff
- Planning to maximise sustainable business success; however success is measured
- Performance measurement to identify weak spots and measure their improvement
- Workflow efficiencies like wasted work, production co-ordination
In geometry, a 12 sided structure is called a dodecahedron. We have shortened that to “Dodeca” when we refer to it in 12Faces
We believe every business should aim to have these 12 faces “balanced” so they are all operating at whatever is an optimal level for this business and at this particular point in time.
To monitor your Dodeca, we have developed a MyDodeca spreadsheet system. This lists all 12 Faces of your business and lets you evaluate them on their condition and their impact on your business.
Some of the “Faces” in your business do not have a particularly big impact on your business. Others, like Revenue, almost certainly will.
The MyDodeca spreadsheet allows you to check the balance in each of the 12 faces of your business.
We suggest doing this on a monthly basis in the early days of using the system. This is because changes can happen quite quickly. As your business stabilises, and becomes more sustainable, the “Faces” of your business may not change very much.
How to Prioritise Work Criteria
There is no single way to choose the next project but it is clear that an urgent matter (such as life threatening risks) likely ranks first. The next group might be solutions that show a big “payoff”. Somewhere down the list will be activities that are small in themselves but clean up lingering wastage or other problems and which make a big contribution over time.
We have grouped these selection criteria below. Then we provide a solution to juggling a complex array of options if that become necessary.
Address Life Threatening and Crisis Issues First
When presented with a range of things you could do, if any of them address situations that threaten health, your operations or the existence of your business, they would likely rank very high as the first thing you should do.
As an example, if you have a cash flow crisis and cannot pay your bills and wages as they fall due, this would be a situation that threatens the very existence of your business. You should prioritise this work before you spend your time looking at less impactful things that you could alternatively do.
Risks
If you do a Risk Analysis, it should show you the most serious risks. Some of these will be “here and now” like safety. Others will be longer term risks that creep up on you and are therefore often overlooked until they morph into a crisis.
As well and health and well being risks, there are “economic” risks like;
- competition from new or looming competitors. A common problem is when a “big box” hardware, supermarket or chain store comes to town. The ever-growing e-commerce world means your competitor can be in another country and still impact you.
- the future ‘runway” for your products. Fashions change and you main products can have a diminishing future. Check out the Boston Consulting Group Growth Share Matrix to find and manage your “dogs”
- disruptive products. Vinyl records gave way to tapes then CDs then streaming devices. In the process, music shops have largely disappeared. Give some thought to your disrupters, add them to your candidate list and monitor them when prioritizing the candidate list
Prioritise Work by Focusing on Your Constraints
If you consider an hour glass, no matter how much sand is above the pinched waste, there is nothing that you can do to make the sand flow through the hour glass any faster.
By definition, there will be some part of your workflow that is the Constraint in that workflow. No matter what you do either side of the Constraint, that workflow will not be executed any faster. For more on this very important tool read how the Theory of Constraints impacts your business.
When looking for the next problem to work on, take a moment to consider the Constraint in your workflow in your business. If there are no more pressing problems demanding your attention, working on the Constraint will, by definition, improve every aspect of your business below the Constraint.
For example, in your Sales Funnel, assume your Constraint is the person who phones potential clients to convert them to the Sale. By definition, you cannot make more Sales until this Constraint is relieved. Therefore, it may be that you focus on how to make this person more efficient, or consider increasing the number of Sales people that you have.
Your business will have (usually) only one overall constraint. However, you will also find that there are constraints in every workflow and in the major functions; revenue creation, operation and administration.
These reduce in impact as you drill further and further down. However, it is worth noting that a constraint in your revenue generation section may have a higher priority than a constraint in accounting. Therefore, you may need to lists constraints separately so they float independently of each other in the ranking. You don’t want some thing important masked by something less important.
Go For The Impact
All things being equal, you would choose the next task to do based on its impact on your business.
Impact can be whatever you choose to rank highly. Early on in your Sustainable Business Journey, this might be sustainability. But later it might be growth, lifestyle or exiting your business.
Rapid Bottom Line Boosters
Some things that you do can have an instantaneous impact on your profitability. Unfortunately, many of them can be done only once or not very frequently.
One of these is to implement a cost reduction program. (See our Optimize 100 GamePlan) Once costs are stripped out of the business, they are removed entirely from the Profit calculation. So, normally close to 100% of the cost reduction is added to your Profit. Clearly this cannot go on indefinitely. Ultimately, the biggest way to reduce costs is to close the business; and that is not a very satisfactory outcome!
The second example is an increase in Price of the products you sell. A European example of 1,000 businesses showed that a 1% increase in Price led to an average of an 11% increase in Profit. Again, because Price is increased without any other changes, the impact goes directly to the bottom line.
The impact of either a Cost reduction or Price increase will be greatest if you use the 80/20 Rule. Saving 10% of your largest costs will have a greater impact than 10% of your smaller costs. Increasing the Price of your 20% bestsellers will have a greater impact than increasing the Price of the 80% of products that do not sell as well.
Sensitivity to Change
There is a method known as “Sensitivity Analysis” which gives solutions on how to prioritise work.
What this does is test what change will happen in (say) your Profit if (say) your Price is increased by 10%. If you look at a number of the elements that makeup your business, for example, Price, Inventory Costs, Labour Costs, Marketing etc. and apply this test to each of them, you will find the one that has the greatest impact. This is the one that you should focus on first.
You can also learn more about this, and see it at work, in the introduction to the 12Faces Optimise100 Campaign in the example in the Case Studies. Read about our ChangeBoard tool for Sensitivity Analysis in the article: Sensitivity Analysis: Experiment with Changes to Your Business.
Undertaking a host of these comparatively small changes can have a surprising compound interest outcome. If you can improve some element of your business by about 10% each week, that element would be 100% better in just 7 weeks. This is the effect of Compound Interest on growth. Go to the article: How to Take Advantage of The Compound Interest Accelerator.
The 80/20 Principle
We are firm adherents to the concept of the 80/20 Principle. This compelling tool argues that you should focus on just the 20% of things that have the greatest impact rather than focusing on the 80% that have less impact. If you follow this discipline, you will be 16X better off for no extra work. You can read more about the 80/20 principle in several of our articles. Go to the article: SM2.0: 80/20 Sales Growth; Double Sales, Triple Profits.
The Use of the Eisenhower Matrix For Prioritising Work
The name Eisenhower Matrix comes from reference to the General, later President, Eisenhower. He talked about dividing the things to be done into 4 groups:
- Important Urgent
- Important Not Urgent
- Unimportant Urgent
- Unimportant Not Urgent
By then focusing on the Important Urgent before the others, you will be making most use of your time. You can read more on using the Eisenhower Matrix for Time Management in the article: How to Use Time Management Skills Tools.
Kaizen for Steady Improvement
Kaizen is a Japanese word meaning “incremental improvement”. It refers to a steady process of improving a workflow. All cost reductions generally go to the bottom line. Read more on this link.
It is a very powerful approach that helped the Japanese carmakers make huge inroads into the US car market.
It is often overlooked because it is not particularly showy; just a steady improver.
Good managers would have this built into their workplaces anyway but some times there needs to be the introduction of a new priority or technique that requires a one off project to set up.
This would rank for consideration for What’s Next.
How to Apply Screening Criteria
If you are a typical business, you will have a fairly long list of things you “could” do. We encourage you to only do one thing at a time (see this evils of multitasking article).
How to pick that one?
Basically you have the choice between you and/or your team’s gut feel (Yellow Belt) and more ‘scientific” ways (Blue Belt).
We talked about your gut above and won’t repeat here. It is a well trained tool and worth following.
Analytical Tools to Prioritise Work
There are more analytical ways of how to prioritise work problems. For example, if your problem is to choose the best vehicle from a huge range, you can use a tool like weighted scores to make a well-balanced decision.
This technique works out what the most important selection criteria are (and gives them a score) and how well each of the possible solutions ranks on each of those criteria (and gives them a score for each weight). When these scores are multiplied together and added up, they give a fairly objective result. You can do this yourself or with a brainstorming group. For more, read the article on weights and scores (link above).
Another way is to compute a score for each alternative and do the highest next. One method we have used is to score each activity on a scale of 1-10 for:
- is it important?
- how quickly can you do it?
- how easy it is to do?
It then follows that an important, fast and easy task would have a score of 1,000. That is 10 multiplied by 10 multiplied by 10. Score other activities in the same way. Then make the next sprint activity the one with the next highest score. This way, you are always doing the things that are important, fast and easy to do before you do any unimportant, slow and difficult jobs.
How Big a Bite to Take
Your project candidate list usually mentions a “desirable outcome” like “increase revenue”.
There is a step required to reduce the “desirable outcome” to a practical project. We covered this in the Yellow Belt article on this topic.
Develop the Deliverables
You, and more importantly, your team need to know where you are heading with the chosen task and what qualifies as acceptable outcomes.
This doesn’t have to be too sophisticated with a very small business because you can just talk to the staff.
With a larger business, and possibly one with several management tiers, you want to write these down or risk the curse of “Chinese whispers” where what comes out of a junior manager’s mouth bears little resemblance to what you want to do!
You can set SMART Goals for the business as a whole and , KPIs and OKR for individuals as ways of showing your expectations.
If these are well drafted, each staff member can see what is expected of them at any time.
Wrap Up
We have discussed several ways to prioritise making a choice of the next things that you should work on in your business. We have loosely ranked them in the order of their importance. Starting with the most critical (life threatening) and moving to the least critical, but important, streamlining your business by focusing on your Constraints.
Because planning is such an important aspect of our Mission to help your Sustainable Business Success, we have software tools like Mission Control to help manage this process.
You can also read more on our Yellow Belt version of this topic.
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