Written by Jared Smith
At a very high level, once you have defined the goal for your particular decision, you can start to build your business case, including the specific decision criteria against which those projects or investments will be measured.
Criteria help your organization decide between competing options and provide insight into the trade-offs made between projects.
Before we address best practices, there is an assumption that many groups make that may need to be challenged; that we can build a perfect set of criteria on the first go around.
The sooner you can let go of the notion, the sooner you can make progress. You will not get it perfect the first time, but that’s one strength of a documented criteria-based prioritization -- you can take the best from previous cycles and iterate to something better suited.
Here are some key basic best practices discovered through working with hundreds of diverse organizations:
1. Find an established process or criteria that you’ve used in the past.
This can often offer a solid foundation from which to iterate. It can be a great way to accelerate your efforts, but do consider any baggage that may be associated with previous processes. You may also find it helpful to leverage Decision Blueprints® for a quick start.
2. Keep it simple!
Shoot for 3-7 parent level criteria with no more than 2-5 children each will ensure better results. Working with too many criteria will water down the impact of your decision model and introduce additional complexity.
3. Have data to support criteria.
If you do not have data, you may need to reevaluate the criterion or ask for qualitative input from participants.
4. Quickly test a sample set of projects against your criteria.
This allows you to not only test your criteria, but also engage key decision-makers for their input leading to better results. Start with a small group and build from there.
5. Criteria should be as mutually exclusive and collectively exhaustive (MECE) as possible.
Ask yourself, “Do they overlap?” and “Are we missing anything major with regard to making the best decision?”. If so, you may want to consolidate, add or even eliminate criteria.
6. Define! Define! Define!
Clarity is king when it comes to your selection criteria. Make sure that definitions are clear and everyone understands them.
7. Don’t include cost in your criteria.
While cost is important to most decisions, value-driven selection is a far better starting point with cost data evaluated later.
8. Continually refine.
After a sample test or first cycle, ask yourself, “is there anything missing?” and “do our definitions still hold true?”. Honing your criteria in this way will only make your portfolio better.
Learn more about the value of using a criteria-based prioritization approach and whether it is right for your organization here.
Building an effective set of criteria can be challenging, but the juice is definitely worth the squeeze. Let us show you how!