BPI Smart Tools Series - Prioritization Matrix

Prioritization Matrix

Prioritization Matrix

Business Process Improvement (BPI) is a philosophy of continuous improvement of processes in relationship to what clients need and value. It is a set of methods and tools to increase speed, improve quality, simplify and create robust processes. The tools used are called Smart Tools and they are designed to help you work smarter, not harder. The business need you have determines the appropriate Smart Tool for the situation.

This lesson covers the Prioritization Matrix. 

What Is It and Why Use It?

What is it?

  • The Prioritization Matrix helps teams make decisions on which projects can move forward or which option is the best out of many. It is especially useful when resources, such as people, time or money, are limited.
  • It narrows down the number of projects/options by rating them against weighted criteria.
  • It gives the total score of each project/option as a result of objective evaluation.

 

Why use it?

  • It affords a team the opportunity to express all opinions.
  • Disagreements are quickly surfaced so that they may be resolved up front.
  • It enables the team to build consensus and make more informed and objective decisions.
  • It forces a team to focus on the best things to do, not everything they could do. This dramatically increases the chances of implementation success.

How Does it Work?

What are the Steps in the Process?

There are six steps to the Prioritization Matrix process.

  • Identify the options to rate.
  • Identify the criteria.
  • Define the criteria rating.
  • Weight the criteria.
  • Rate the options against the criteria.
  • Agree on the final outcome.

Step 1 - Identify Options to Rate

  • Select no more than 8 options to rate. 
          -Where do options come from? Options could come from the project pipeline identified with business leaders. Options could also come as a result of a Breakthrough Brainstorming session or by completing a Cause and Effect Diagram. 
    (Review the tutorials available in My Learning Network for more information on these BPI Smart Tools).
  • If you have more than 8 options narrow the list down prior to entering options into the matrix. You can narrow the list by:
           -Combining like-items
           -Eliminating impractical solutions
           -Multi-voting
                   -->Have each participant vote for 1/3 to 1/2 of the total list of options.
                   -->Tally the votes.
                  -->Select the options that have the most votes.

Step 2 - Identify Criteria

Identify criteria that will be used to asses each option. Select no more than six criteria to keep the matrix manageable. The below sample reflects a good set of standard criteria to use when assessing potential projects at Nielsen. However, if you are not assessing a potential project and instead using the matrix for a different assessment you may need to develop a different set of criteria. You will see an example of this later in this tutorial. 

Step 3 - Define Criteria Rating

he next step is to define what high, medium and low means for each criterion. Below is an example of the criterion the BPI organization utilizes to objectively evaluate project opportunities.

Below are the criterias with their the definition for high and medium. The definition for "Low" is the same for all criteria; Does not meet the criteria for Medium.

Strategic Importance:

High

  • Part of a top strategic BPI program.
  • Sponsored by a platinum client.
  • Potentially protects revenue of more than $5MM
  • Potentially generates additional revenue of more than $500K

Medium

  • Sponsored by a local leader.
  • Potentially protects revenue of more than $1MM but less than $5MM.
  • Potentially generates additional revenue of more than $250K but less than $500K.

Financial Impact:

High

  • The project can potentially increase EBITDA by more than $500K, or
  • The project can potentially generate cost savings of more than $500K.

Medium

  • The project can potentially increase EBITDA by more than $250K and less than $500K, or
  • The project can potentially generate cost savings of more than $250K and less than $500K.

Leverage-ability: 

High

Potentially presents solutions to be globally leveraged.

Medium

Potentially presents solutions to be leveraged for other countries within the same region only.

Client Satisfaction: 

High

Focused on a critical platinum client problem or improvement opportunity.

Medium

Focused on non-platinum client problems or improvement opportunities and/or with at least one official client complaint.

Employee Satisfaction: 

High

Primarily focused on employee satisfaction, such as turnover rate reduction.

Medium

Not directly related to employee satisfaction but indirectly the project has a potential to decrease employee complaints.

Step 4 - Weight the Criteria

The next step is to weight the level of importance for each of the criteria.

  • Typically use a scale of 1 to 5, where 5 is the most important criteria and 1 is the least.
  • Multiple criteria can have the same weighting, but they all can't be weighted the same. 

Step 5 - Rate the Options

Complete the matrix by rating each option against each criterion.

  • Score each option against each criterion by asking "If we selected this option, what is the impact on this criterion? High, Medium or Low?".
  • Continue to review your definition of high, medium and low.
  • High = 9 points, Medium = 3 points, Low = 1 point.
  • Remember, high score wins. Note: Here is a Prioritization Matrix Excel template.

Step 6 - Agree on Outcome

Review the results of the matrix and get consensus on moving forward. Some options could have a close score. You need to decide how many options can be worked on at one time. You may decide to do several options but not all at the same time. 

Prioritization Matrix in Action

Prioritization Matrix in Action

Meet Sandra! 

Sandra is a Client Service leader working on a strategic plan for her area of the business.

Sandra is new to Nielsen and she wants to know who the top customers are for the business. Her direct reports tell her the top clients are the clients with the biggest revenue. Sandra reviews the list of clients by revenue and notices that the highest revenue comes from traditional media clients.

Historically, the business has used only revenue to categorize clients hierarchy. Sandra doesn't think revenue alone paints a holistic picture. She feels strongly that other characteristics, like growth opportunity, have to be weighed. Sandra doesn't want to build a plan for yesterday, but rather one for tomorrow. She thinks there are additional factors that can be used to rank clients.

Let's see the steps the team follows to use the Prioritization Matrix to answer this question. 

Note: the Prioritization Matrix is usually used to rank problem solution options. However, it can be used for ranking options in other situations like the one above.

Step 1 - Identify Options to Rate

Sandra and her team first identified all of the clients they serve and labeled them A through H on the Prioritization Matrix template. 

Step 2 - Identify Criteria

Next, Sandra's team identified the six criteria they thought were important and put them into the criteria sections of the template.

  • Revenue
  • Growth potential
  • Strategic client category
  • Strategic market
  • Ease of partnering
  • Service subscriptions 

Step 3 - Define Criteria Rating

Sandra and the team had a discussion about how they should define their criteria. Sandra emphasized that it was important for them to agree on the definitions so that the whole team would own the outcome of the rating process. They put their definitions into a grid and kept it available for the next steps in the process. 

Step 4 - Weight the Criteria

Once the team had their criteria defined they discussed which criteria were the most important, least important and which were somewhere in the middle. Knowing that some things (but not everything) could be rated at the same importance level helped their discussion move along quickly. They filled the importance scores into the top half of the template and it automatically populated in the results section. 

Step 5 - Rate the Options

Using the criteria definitions agreed to in step 3, Sandra's team now completed the matrix by filling in a rating of High, Medium or Low (H, M, L) for each of the criteria. They repeated this step for each client being evaluated on the matrix. The template automatically scored their ratings and totaled the score for each client at the bottom. 

Step 6 - Agree on Outcome

Sandra and her team agreed to the prioritization of clients based on the criteria and rating. Sandra can now better focus the resources, time and energy of her team based on this prioritization. 

Knowledge Check

Question 1

  • True
  • False
In a Prioritization Matrix low score "wins". True or False?

Question 2

  • True
  • False
The number of options or criteria is not important when constructing the Prioritization Matrix. True or False?

Question 3

  • 5, 3, 1
  • 7, 3, 1
  • 9, 3, 1
The typical Nielsen values for high, medium and low ratings are:

Summary

Tips and Traps

The following is a list of tips and traps to be aware of when using the Prioritization Matrix Tool.

Tips:

  • The matrix can be used for any type of decision. It can be the prioritization of problems or solutions.
  • Make sure the participants are aligned with the criteria, weight and the definition of the rating.
  • Always check the final result with common sense.

 

Traps:

  • Putting too many options into the matrix.
  • Lack of clarity on the definition of the criteria or on the options.
  • Confusion on what a high, medium or low rating means.

Next Steps

Consider the following action items to deepen your understanding of the Prioritization Matrix process:

  • Work with your leader to identify opportunities where the Prioritization Matrix could be used to identify the most important projects to target.
  • Visit the Smart Tools page on iShare to review further examples of the Prioritization Matrix in use!
  • Click here to download the Prioritization Matrix template and get started today!
  • Follow the BPI discussion on Google+!  Get involved and share your ideas!
  • If you have any suggestions or feedback, please contact [email protected]

Congratulations

Congratulations! You have successfully completed the BPI Smart Tools Prioritization Matrix Tutorial. 

Thank you for participating in this training. You should now:

  • Understand what the Prioritization Matrix is and why you might use it.
  • Be able to follow the steps in the process to use the tool to determine the best option(s) to pursue in your projects.

Please finish the tutorial using the exit door icon in the upper right corner of this screen and log your completion. Your completion will be recorded in your learning plan and your manager will be notified.

Visit myLearning to explore more Nielsen training opportunities and learning resources.