How to Prioritize Strategic Initiatives Using a Prioritization Grid
There’s a critical juncture in the strategic planning process. You’ve identified the actions you need to take and grouped them into initiatives. But important questions remain: How should you sequence implementation of your strategic initiatives? Are there some initiatives that it would be more prudent not to implement? This is where a prioritization grid comes into play.
A prioritization grid, also known as a prioritization matrix, is a 2×2 matrix that plots strategic initiatives based on Value vs Risk. You can also think of Value in terms of Return or Benefit and Risk in terms of Cost or Effort (you can find additional ways to conceptualize these terms here).
Understanding the Components of a Prioritization Grid
A prioritization grid has six primary components:
- Risk: Risk is inversely mapped across the Y-Axis, with low risk at the top and high risk at the bottom of the axis.
- Value: Value is mapped across the X-Axis, from low value to high value moving left to right.
These two axes intersect to form a grid, resulting in four quadrants. Each strategic initiative is assigned separate values for risk and value. Using these values as coordinates, each strategic initiative is plotted on the grid – ultimately ending up in one of these four quadrants:
- Challenge (High Value, High Risk): These are strategic initiatives that may be worth pursuing, but you have to be careful managing your risks.
- Implement (High Value, Low Risk): These are strategic initiatives that should be implemented immediately.
- Reconsider (Low Value, High Risk): There’s little benefit in implementing these initiatives, and you’re probably better off shelving them for now.
- Possible (Low Value, Low Risk): You could implement these initiatives, but there’s really not a huge return and even minimal effort might be better applied towards other initiatives.
How to Accurately Assess Risk and Value
Traditionally, when prioritization grids were primarily still made with spreadsheets, it was up to the user to score each initiative for risk and value based on a scale of 1-10. However, there are several potential downside to this method:
- This method only provides a superficial, perception-based assessment that doesn’t necessarily accurately reflect reality or take additional variables into account.
- It allows for human biases to influence the assessment (for instance, a business strategist might underestimate risk/effort for an initiative with a high enough value, or overestimate potential value for low-effort initiatives).
- Ultimately, the basis of these scores are all qualitative and are harder to defend with actual data.
Jibility, on the other hand, walks users through capability-based planning to formulate a substantiated list of initiatives. These initiatives are prioritized in a 2×2 grid based on relativity. In other words, each initiative is assessed on whether its risk and value are higher, lower, or at the same level as other initiatives on the grid. The use of a relativity comparison approach nullifies any unnecessary debates and arguments over whether the computed or weighted scores are correct. Additionally, relativity comparisons help stakeholders keep things simple and encourages a more strategic, big picture view of initiatives.
How to Prioritize Strategic Initiatives for Implementation
Once you’ve created your prioritization grid, you need to identify an implementation zone that encompasses the strategic initiatives that should be included in your implementation plan. This zone can fluctuate based on your risk tolerance, but generally you should focus on capturing maximizing value while not exposing your organization to unnecessary risks or time costs.
Below is a breakdown of an implementation zone that explains how to prioritize strategic initiatives based on where they fall within the prioritization grid:
Generally, you should sequence the initiatives that fall within your implementation zone starting from the top right and then moving towards the bottom left of your zone.
Benefits of Using an Interactive Prioritization Grid
In the past, prioritization grids required significant manual effort – either using a spreadsheet or pen and paper. Today, modern business planning software and strategic roadmapping tools such as Jibility provide interactive prioritization tools that help you prioritize your strategic initiatives and sequence them for implementation.
Compared to manual methods, using a digital prioritization grid has myriad benefits:
- Automated prioritization software is faster, more streamlined, and leaves less room for user error.
- Before generating your prioritization grid, strategic planning tools help you accurately assess your business capabilities and package business actions, ensuring that no variables in your risk/value assessment go overlooked.
- Prioritization software gives you tools to help you objectively assess risk, as well as value for each component of a strategic initiative.
- With an interactive prioritization grid, you can manipulate risk/value projections to view the impact in real-time.
- After completing your prioritization grid, roadmap software supports mapping of your strategic initiatives across a time horizon, generating a strategic roadmap for implementing your initiatives.
Jibility helps users assess projected value vs projected cost to accurately plot strategic initiatives across a prioritization grid.
Try Our Free Business Prioritization Software
In addition to an interactive prioritization grid and a drag-and-drop prioritization evaluator, Jibility offers step-by-step guidance to prioritize your strategic initiatives.
With intuitive software based on proven capability-based planning best practices, Jibility gives business leaders, consultants, and strategists the ability to quickly (and thoroughly) conduct strategic planning and generate a pragmatic, concise strategic roadmap to guide their organization quickly and thoroughly.