Times of economic uncertainty are challenging for organizations as they try to maintain profitability. Businesses often have to cut costs or change up their active projects, and there is concern they might lose momentum on the most business-critical projects.<\/p>\n
Many organizations will face making the same decisions: Which projects should they accelerate, pause, or stop altogether? Because the economic outlook moving forward is unknown, many companies may start reprioritizing projects based on fear. However, there\u2019s a better approach: one based on strategy<\/a> and your teams.<\/p>\n It\u2019s challenging to determine which projects to stop or pause when you don\u2019t know what you\u2019ll consider normal in the future. What makes it even more challenging to decide, though, is that there is no shortage of methods for prioritization or portfolio rationalization as it is. Companies can choose to prioritize projects based on a current, short-term goal of saving costs or focus on risky, innovative projects that provide a competitive advantage.<\/p>\n An article from the Harvard Business Review<\/a> shares that companies that emerged from the 2009 financial crisis in the strongest shape relied less on extreme cost-cutting measures, such as layoffs, and leaned more on innovation and operational improvements. The article suggests companies should consider projects that:<\/strong><\/p>\n Focusing solely on short-term goals can leave companies scrambling when the economy levels out again. Companies have to be well situated for when things turn around versus being reactive, losing focus on key strategies, and falling further behind.<\/p>\n Moreover, focusing on the wrong projects during this time could harm your teams. Hasty decisions can cause your team members to become more stressed at an already stressful time.<\/strong> Or, worse, you might have to lay off people because a project didn\u2019t go as planned.<\/p>\n So, how do you find the right balance and discern which projects are the most business-critical in these uncertain times?<\/p>\n To find stability, you need to pick a project prioritization method<\/a> with criteria that align with your short- and long-term objectives and core values. Use your project management office<\/a> (PMO) to facilitate the process of prioritizing your projects. They are uniquely positioned to enable cross-functional decision making that delivers a strategic project portfolio.<\/p>\n Here are four practical steps you can take:<\/p>\n Begin by defining your short and long-term objectives. These will inform your decisions about which projects align with your operational and strategic objectives.<\/p>\n The best way to do that is to consider what you need to do now to survive the economic downturn, what will keep your business running and growing after it is over, and what will instill confidence and trust from your teams.<\/strong> For example, do you need to save money right now? Is your long-term objective to become more competitive in your market? How will your decisions affect the morale of your teams?<\/p>\n If you have competing priorities, assign different weights for your objectives to help determine relative value and importance.<\/p>\n What projects are currently in your portfolio, and how do they line up with the objectives you wrote down in the first step?<\/p>\n If you have a project focused on creating a new product, it might fit better into your long-term objectives, or it could help you improve cash flow right now, depending on the project. To that end, a website update project dedicated to improving user experience could help customers decide to hire you right now, or it could be the perfect project to focus on in the future when economic conditions are more favorable.<\/p>\n The risk level associated with each project depends on your organization\u2019s culture and tolerance of risk. Awareness of the risks of dropping a strategic project or if your company slows down, for instance, is critical.<\/p>\nRisky Business: Project Prioritization<\/h2>\n
\n
How to Prioritize Projects During Economic Uncertainty<\/h2>\n
Step 1: Articulate Your Objectives<\/h3>\n
Step 2: Align Projects to Your Objectives<\/h3>\n
Step 3: Assess Risks and Their Impact<\/h3>\n