Why portfolio prioritisation is critical for post COVID success
Covid-19 is a game-changer for organisational strategies. Most organisations are faced with a market shift and their risk exposure has cranked up significantly. For some, the emerging ‘new normal’ creates opportunity and maybe the conditions to trigger long overdue changes. One thing’s for certain, the pandemic has created challenges that have forced organisations to think and act differently. Suddenly, in many cases, an organisations’ ability to change is less about evolution and more an essential means of survival. Constraints are often a catalyst for innovation and those organisations able to flexibly change and adapt will take the advantage.
So, in light of these new and emerging strategies, all eyes should focus on the change portfolios. Decisions on where to allocate investment and resources requires a steady hand. The consequences become amplified; investing in the right things and realising the returns becomes critical. This is where prioritisation – investing in the optimum way – becomes the crucial discipline.
Undoubtedly, there are critical programmes and projects that need to be initiated immediately, and equally some that clearly need to be stopped. Then there’s the trickier bit in the middle. What’s going to bring us the most value? What should we adjust? What’s too late to stop? Prioritisation approaches based on criteria that compares costs (adjusted for risk) against benefits (value – also adjusted for risk) have been shown to provide maximum return with optimal resource utilisation.
A common difficulty faced however is coping with the combinatorial effect of multiple options. i.e. as numbers of candidate projects rises, the number of possible combinations also rises very steeply. With just 12 projects there are 4096 discrete portfolio combinations to choose from: with 25 projects the number is in the billions! It is therefore unsurprising that without good prioritisation schemes and tools, mistakes are made when considering the best combinations of projects in a portfolio.
At CITI, we’re well versed in the challenge. We work with industry leaders to apply our unique tools, techniques, and approaches to enable effective prioritisation practices. CITI works with organisations to build the capability within, enabling ongoing and sustainable change portfolio selection and management. We’ve supported many organisations in riding the ‘shock wave’ of the previous financial crisis and emerge stronger on the other side.
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