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February 16, 2008 | Comments: (0)
More about balancing strategic and tactical improvements
Comment on a previous Advice Line: "Balancing strategic and tactical improvements," 1/28/2008:
I like this analysis and have used a similar method to prioritize projects, but I have one problem with Bob's version - Cost and Risk are not always necessarily correlated, and this version suggests that they will always be in the same quadrant (i.e., if it's high cost it is also high risk, or if it's high risk it's also high cost.)
I can think of many examples that would be high risk but low cost, since the risk only becomes costly if the negative outcome is in fact realized.
Bob's Last Word:
The commenter is, of course, right. I also, by the way, generally schmush (to use the technical term) benefit and impact together on the other axis even though they are separate subjects.
I do this because the number of visualization tools available to display four-dimensional images are limited (to none, display technology being what it is).
I've found that the approximations I described are generally good enough to guide practical decision-making, even though that aren't precise and do merge distinct dimensions of value.
Posted by Bob Lewis on February 16, 2008 02:12 PM
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Hi Bob,
As the poster of the previous question, I faced a similar problem drawing up my graph.
In the end, I chose to use a 3-axis representation as follows:
* Risk on the X axis. The further to the right, the riskier the project.
* Benefit on the Y axis. The higher the data point, the bigger the potential benefits.
* Effort using dot size. The bigger the dot, the more effort/money the project requires.
I got some good feedback from management on this layout. I quite like it since it ensures that highly beneficial projects of low risk aren't shelved simply because they require sustained effort from the company to complete.
This does still leave benefit and impact schmushed together, but I cannot think of as many scenarios where high benefit/low impact or vice versa would make a substantial difference to the planning process.
Posted by: Prioritizer at February 17, 2008 04:33 AMAs Bob noted in the initial post, the vertical axis was simply "reasons not to" do the item in question. It does not lump risk and cost together, but rather treats them both as deterrents to the project. In the case of deciding whether to do or not do and how to prioritize, that is very reasonable. One might quibble with how to combine cost and risk, but for a quadrant analysis that is relatively unimportant.
To Prioritizer .. I would be concerned that the (very interesting and insightful) presentation you discuss skew your organization toward the lower effort, higher risk projects.
Posted by: Tom J at February 19, 2008 08:20 AMIn a comment on the initial message, commenter Michael White asked about a "quadrant" analysis. It is basically a construction to simplify decision making by focusing the key attributes onto a single page and making the distinctions between alternatives clearer.
The Gartner Group is a consultant/think tank organization that uses this kind of analysis heavily (and likely has copyrighted the term "magic quadrant").
--> http://www.networkworld.com/news/2004/0209widernetquadrant.html
Probably the most famous quadrant analysis is the time management one made famous by Stephen Covey in his book "7 Habits of Highly Successful People".
http://www.teal.org.uk/sv/timemgnt.htm
http://www.orgcoach.net/timematrix.html
As an aside .. if you haven't read this book, do so .. quickly.
Hope this helps!
Posted by: Tom J at February 19, 2008 08:38 AM|
Three books. Three ways to change the world, your life, or at least Bob Lewis' bank account. Leading IT: The Toughest Job in the World distills the world of IT leadership into eight learnable skills and gives you concrete, practical techniques for each one of them. Bare Bones Project Management: What you can't not do makes project management manageable, even for first-time project managers with no formal training in the discipline. ManagementSpeak: What managers say/What they mean … well, it won't help your career, and won't make you a better manager. Mostly, it will make you chuckle, guffaw, and maybe even chortle. Make friends - it's the perfect gift for anyone who has ever suffered through one of those meetings. Order your copies today! |
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