Project Prioritization Matrix in Lean Six Sigma. Complete Guide

Project Prioritization Matrix sets up a way to objectively look at potential projects based on key things to consider. Things like if the project helps with important goals, how much benefit it will bring, costs involved, risks, and resources needed.

Plotting all this out gives a clear picture of what should come first. It takes the emotion out and helps make the right call.

Doing this is better than just guessing. You can allocate your time, people, and money efficiently where it matters most. Projects also tend to go smoother when given the attention they deserve from the get-go.

The chart also helps bring everyone on the same page. It facilitates discussions so all stakeholders understand priorities. That means important projects don’t fall through the cracks.

The best part is you can tweak the chart to fit your unique situation. Whether you’re running a business, a school club, or planning your personal goals, it’s a versatile system to help prioritize what’s most important and will give you the biggest return.

Key Highlights

• The project priority chart is a really useful tool for companies to look at projects and decide which are most important.
• It helps make sure the work your team focuses on fits with your organization’s goals and strategies.
• It allows you to objectively evaluate potential projects based on different criteria. Things like how much benefit each project will provide, costs involved, potential risks, and whether they align with what your company is trying to achieve.
• Mapping these factors on a chart gives a clear picture of which projects should come first.
• It makes decision-making easier and helps your team manage projects more effectively as a whole portfolio.
• Setting up a good priority chart system can streamline processes. It also makes everything more transparent so everyone knows why certain projects take precedence.
• Projects tend to go smoother too when you put time into the ones that matter most from the start.
• If set up correctly, this chart is a useful tool for companies to cut through the noise and really zero in on what work brings the greatest value. It helps optimize resources and maximize the impact of projects.

What is the Project Prioritization Matrix?

Project Prioritization Matrix, also called a prioritization grid, sets up a simple way for your group to objectively look at projects based on two main things – how much benefit each will provide and how much effort they’ll take.

You plot the projects on a grid that compares those two factors. That instantly shows you which ones you should focus on first based on how important they are and the resources they need.

A few good things about using project prioritization matrix – it takes out personal bias since everyone’s looking at projects the same structured way.

You also get the most value by starting with projects that are super helpful but don’t require as much work. And the visual design makes it easy to communicate priorities throughout your whole team.

It also helps make sure you’re working on stuff that aligns with the overall goals of your organization. While a simple concept, you have to put some thought into what criteria you use to score projects and consistently apply the same process each time.

If done right, this chart is a handy tool for clearly figuring out what’s most important for your team to focus their time and efforts on first.

How Project Prioritization Matrix Works

The project prioritization matrix is a simple tool that allows organizations to visually prioritize projects based on key criteria. It takes the form of a 2×2 grid with axes representing different prioritization factors.

The typical axes used are:

• X-axis: Benefit of the project (strategic importance, return on investment, revenue impact, etc.)
• Y-axis: Cost/Effort required for the project (budget, resources, complexity, risk, etc.)

Each project is plotted as a data point on the matrix based on scores for the x and y axes. Projects in the top right quadrant have high benefits and low costs, so they are the highest priority.

Those in the bottom left have low benefits and high costs, so are the lowest priority.

This visual mapping allows projects to be easily classified into priority buckets like:

• High Priority (Top Right) – Execute these projects immediately
• Medium Priority (Top Left & Bottom Right) – Put these in the pipeline
• Low Priority (Bottom Left) – Re-evaluate or de-prioritize these

Some prioritization matrices add a third axis represented by bubble size to indicate other factors like project duration or goal alignment.

The power of the prioritization matrix is its simplicity in comparing projects across a few key dimensions. However, it does require some subjective scoring, and prioritization factors may need adjustment for different project portfolios.

Prioritization Matrix vs Other Prioritization Techniques

While the prioritization matrix is a powerful and widely used technique for prioritizing projects and tasks, it is not the only option available. There are several other prioritization techniques that organizations can consider, each with its strengths and weaknesses.

Scoring Models

Scoring models involve assigning numerical scores to projects or tasks based on predefined criteria such as strategic alignment, return on investment, risk, and resource requirements.

Projects are then ranked based on their total scores. Scoring models can be more quantitative than prioritization matrices, but they may struggle to capture qualitative factors.

Bucket System

The bucket system involves categorizing projects or tasks into different “buckets” based on their priority level, such as “must do”, “should do”, “could do”, and “won’t do”.

This approach is simple and easy to understand, but it may lack the nuance required for complex prioritization decisions.

Weighted Shortest Job First (WSJF)

Weighted Shortest Job First (WSJF) is a prioritization technique commonly used in Agile environments. It involves calculating a score for each item based on its cost of delay, job size, and other factors.

Items with higher WSJF scores are prioritized first. WSJF is particularly useful for prioritizing user stories and features within a product backlog.

Analytic Hierarchy Process (AHP)

AHP is a structured technique that involves breaking down complex decisions into a hierarchy of criteria, sub-criteria, and alternatives.

Pairwise comparisons are made between elements at each level, and numerical weights are derived to determine the overall priority of each alternative. AHP is useful for complex decisions with multiple stakeholders and conflicting criteria.

While these techniques have their merits, the prioritization matrix offers several advantages. It is relatively simple to understand and implement, yet it can accommodate both quantitative and qualitative factors.

The matrix’s visual representation makes it easy to communicate priorities to stakeholders.

Additionally, the prioritization matrix can be adapted to various contexts, such as project portfolio management, resource allocation, and operational work prioritization.

Ultimately, the choice of prioritization technique depends on the specific needs and constraints of the organization, as well as the complexity of the prioritization problem at hand.

In many cases, a combination of techniques may be appropriate, with the prioritization matrix serving as a central tool for aligning priorities across the organization.

Analyzing and Optimizing the Prioritization Matrix

Once you have your prioritization matrix populated with projects and their scores, it’s important to analyze the results and look for opportunities to optimize.

The matrix should provide clarity into which projects truly are the highest priorities based on the criteria, but there are some additional steps to take.

Reviewing Matrix Distribution

Take a look at how the projects are distributed across the four quadrants of the matrix. If too many projects are clustered in one quadrant, like the high value/high complexity section, it may indicate that your scoring parameters need adjusting.

The goal is to have projects reasonably distributed to highlight true priorities.

Adjusting Scoring Criteria

If the distribution seems off, revisit the criteria used to score value and complexity/cost. Make sure the criteria align with current organizational goals and initiatives.

The weightings of each criterion can also be adjusted to shift priorities. Involving stakeholders in this review process can provide valuable perspective.

Identifying Resource Constraints

With a prioritized list of projects, compare it against current resource availability and forecasts. If there are not enough resources to tackle all “high priority” initiatives on time, you may need to further prioritize by delaying some projects.

The prioritization matrix visualization can help determine which projects get top resourcing.

Integrating with Portfolio Management

Project priority matrices are most effectively used as an input into portfolio management processes. The prioritized list of projects from the matrix can be mapped against the organization’s project portfolios and roadmaps.

This ensures execution focuses on the right initiatives across departments and product lines.

Continuous Improvement

Prioritization is not a one-and-done exercise. Priorities can shift rapidly due to changes in strategy, resources, or market conditions.

The prioritization matrix should be revisited regularly (e.g. quarterly) to reevaluate scores and ensure initiatives are properly prioritized based on the latest circumstances.

Implementing Governance

To keep the prioritization process consistent and effective, a governance model should be established.

This includes defining scoring criteria, setting up review meetings, identifying key stakeholders, and establishing an escalation process for issues. Proper governance ensures prioritization stays aligned with evolving business objectives.

Organizations can optimize their use of this powerful prioritization technique by analyzing the prioritization matrix outputs, adjusting criteria as needed, considering resource constraints, integrating with portfolio management, revisiting regularly, and implementing governance.

Prioritization Matrix in Project and Portfolio Management

The prioritization matrix is an invaluable tool for effective project and portfolio management. By scoring potential projects based on criteria like benefits, costs, risks, and strategic alignment, organizations can objectively prioritize which initiatives to pursue.

Project Prioritization

Within a single project, the prioritization matrix can be used to prioritize requirements, features, or work packages. This ensures the most critical and high-value items are tackled first within the project schedule and budget constraints. The priority matrix categories for a software project, for instance, could be:

• Business Value
• Cost of Delay 
• Implementation Complexity

Work requests or change requests that score highest in the priority matrix would take precedence in the project backlog.

Portfolio Management

At the portfolio level, the priority matrix helps organizations invest in the right projects from a master list of proposed projects. Typical priority matrix categories for evaluating potential projects include:

• Strategic Alignment
• Expected Return on Investment
• Risk
• Required Investment (budget, resources)

The resulting priority scores allow organizations to pursue a balanced portfolio of high-value, strategically aligned projects while staying within capacity constraints. The priority matrix visualization can display approved, deferred, and rejected projects.

Governance and Portfolio Reviews

Priority matrices should be reviewed regularly, such as quarterly portfolio review meetings. As business conditions change, the prioritization and scoring criteria may need to be adjusted. New proposed projects get evaluated and prioritized against existing projects.

The priority matrix analysis enables organizations to quickly identify if there are enough resources for committed work, or if projects need to be put on hold. It provides visibility into project prioritization and data-driven decision-making at the portfolio level.

Overall, the prioritization matrix is an intuitive yet powerful technique to optimize resources and investments across projects and portfolios. It aligns execution with business strategy in a transparent, quantitative manner.

Prioritization Matrix Best Practices and Governance

Following best practices and implementing proper governance around the prioritization matrix process is critical for its successful adoption and continued effectiveness. Here are some key best practices to keep in mind:

Establish Clear Criteria and Weightings

The criteria used in the prioritization matrix and their assigned weightings should be clearly defined and aligned with organizational goals and strategies. Involve key stakeholders in setting these criteria to ensure buy-in.

Implement Standard Processes 

Have standardized processes around how prioritization matrices are created, reviewed, approved, and revised. This ensures consistency across teams and projects.

Leverage Prioritization Software

Prioritization matrix software can automate scoring, provide data visualization, and enable real-time updating of priorities as conditions change. This enhances efficiency and accuracy.

Integrate with Agile/Kanban Workflows

For organizations using agile or Kanban methodologies, the prioritization matrix should integrate with tools and processes already in place for managing backlogs and work intake.

Establish Governance

A prioritization matrix governance body with defined roles, responsibilities, and decision-making authority is recommended. This could be an existing PMO or a dedicated prioritization governance team.

Enable Transparency and Visibility

The prioritization process should be transparent, with visibility into criteria, scores, and prioritized lists for all stakeholders. This builds trust and facilitates alignment.

Conduct Regular Reviews and Optimizations

Continuously improve the prioritization process by analyzing metrics, gathering feedback, and optimizing criteria, weightings, and processes as needed to increase effectiveness.

Provide Training and Change Management 

Implement training programs to ensure teams understand how to create, interpret, and leverage prioritization matrices. Manage organizational change to drive adoption.

By following prioritization matrix best practices and implementing robust governance, organizations can maximize the value and impact of using this technique across their project and portfolio management disciplines.

Our Take

The project prioritization matrix is an invaluable tool for organizations looking to effectively prioritize their projects and initiatives.

By considering factors like cost, benefits, risks, and strategic alignment, the matrix provides an objective framework for ranking projects based on their relative importance and potential impact.

While the prioritization matrix offers many advantages, it’s important to recognize its limitations as well. The matrix relies on subjective scoring and weightings, which can be influenced by individual biases or incomplete information.

Additionally, it may oversimplify complex projects or fail to account for dependencies between initiatives.

To mitigate these challenges, it’s crucial to establish clear prioritization criteria, involve key stakeholders in the scoring process, and regularly review and update the matrix as new information becomes available.

Organizations should also consider complementing the prioritization matrix with other prioritization techniques, such as financial models, risk assessments, or portfolio optimization tools.

Ultimately, the success of the prioritization matrix lies in its consistent and disciplined application within a broader project and portfolio management framework.

By aligning project prioritization with organizational strategy and resource capacity, companies can maximize the value of their project investments while minimizing risks and optimizing resource utilization.