Making Project Selection Less Painful
By John Heise CLSSMBB, CQM
Trying to identify, scope, and select continual improvement projects can be downright challenging and frustrating. If you’ve never done it before, it can be intimidating or formidable, and can create a lot of consternation and anxiety. If you’re one of those who feel this way, don’t give up hope. You too can be successful in identifying and scoping projects. The key to successful project scoping is to be as “data-driven” as possible. Using the right kind of information can help guide you to successful project development and selection.
Using the right thought process is a good formula for success. Below is the thought process (or work process) I’ve used and it has always served me well. It is a process made up of key actions and questions that guide you to getting the right information to support good project scoping and selection. This process is as follows:
1. Define the problems to be solved.
2. Develop project names (for each problem).
3. Determine the organization/system (e.g. work process) where the problem resides.
4. Define the impact of the problem on the customer and the business.
5. Assess how critical is the problem (to the customer or business).
6. Estimate how many resources will be needed to work with the project (1 or more Black Belts, 1 or more Green Belts, 1-2 people, 4-6 people, 8 or more, etc.).
7. How much time will be needed for the project?
8. How much data is available to support the project?
The key to successful project development and selection is to start with the facts. If you are working in an existing business or manufacturing area, a good start would be to look at the problems and issues facing your organization or business. Good sources of information are operational metrics (measures), business metrics, customer complaints, product returns, as well as others. Other good sources of ideas include:
• look at key strategic areas upper management may be interested in
• looking at potential growth opportunities in your business area
• look for possible efficiency/cost improvement ideas
Whatever you are working with, a key formula to success is to make sure that the issues/opportunities line up with the priorities of your leadership.
To gain better insight of the problem to be solved and how the issues impact the business, work the issues into effective “Problem Statements” (Step 1). An effective problem statement contains the following information: “what”, “when”, “where”, “how much”, and “how do you know”. It captures an accurate picture of the problem and its impact; also consider a brief description of “where you would like to be if the problem was resolved” (e.g. “desired state”). Many times while working with a problem statement I develop a (representative) project name (Step 2) that can be used later in sorting out the data gathering.
Next, identify the area (or areas) of the business (e.g. work process and organization) where the problem exists and where it might be generated (Step 3). This is important for gathering the additional information on the potential impact of the problem. We will want to ask questions and gather information/data from key people within the process or business area where the problem, or opportunity, exists.
Key Step 4 to success is to define the impact of the problem or opportunity (referred to from here on out as problems) in terms of business impact (or dollars). A “best approach” here is to identify a financial representative in your organization, close to the system, or process, where the issues reside. The financial representative, in many cases, can help estimate the cost impact of the issues. When looking for potential cost impacts, there are typically three “buckets” that business dollar’s fall: Costs (expenses), Growth (sales), and Cash Flow (inventory). When defining the business impact, try to assess how much the problem is costing the company, and how much would be saved if the problem was eliminated. Do this for each problem on your list. This is usually one of the more challenging steps in the process, but I encourage you to make your “best attempt” at doing this. I have found that the more you do this the easier it will become. In other words: “practice makes perfect”. Have patience with yourself as you learn this step in the process.
While an estimate is being developed on the impact of each problem, assess how urgent it is that this problem gets resolved (Step 5). If you are working with a customer complaint issue, the problem might be urgent. If it is a safety issue, then the problem is extremely urgent. If the problem is an internal issue only, and is not costing the organization too much pain, then it may be less urgent.
The next key question (Step 6) is to understand how many resources and time may be needed for each of these “potential projects”. If you have a Continual Improvement Organization staffed with LSS Green Belts and Black Belts, assess how many of each type of resource you may need to lead the project (to solve the problem). If you don’t have these resources then think about the number of people and process experts that will be needed to support the team working on the project. Simpler projects require fewer resources and possibly a lower skill set will be needed (e.g. Green Belt vs. Black Belt). If the project is more complex, involving a large number unknown causes, or involving multiple areas of the business (e.g. across multiple functions), higher skilled resources may be needed.
While assessing the staff needed, make an estimate of how long it may take to work through the project to implementation of the improvement actions (Step 7). Simple projects with very few unknown causes will be faster to work through than those with multiple issues and no knowledge of their causes. A good rule of thumb I use is to assess if the project will take 1-3 months to complete (easy), 3-6 months (moderate), or if it will take over 6 months to complete (difficult).
Finally, we need to look at how much data is available to support working on the project (Step 8). If there is a lot of historical data available and it is accurate and reliable, then this will effectively support the work of the project; making the chances of success much higher. If there is no data available, then this will significantly increase the workload on the project team and potentially compromise the chances of success.
Once all of this “preliminary” information has been gathered, the Black Belt or Continual Improvement Manager can then use this data to help prioritize which project(s) is best. This information can be summarized in a table to help in the selection of projects. A tool I have used in the assessment and selection of projects is a Project Prioritization Matrix (see below.)
The Project Prioritization Matrix is a good tool to use when there are competing projects and limited resources. The matrix has three key areas:
• The listing of the projects and their key customers/sponsors
• Assessment of the impact potential of each project,
• The potential of success.
In the bottom of the matrix is a suggested guide for scoring each of the criteria that includes data and information. On the top of the matrix is a “weighting factor” for each of the score criteria. This allows the organization (or Master Black Belt) to give more priority to key criteria versus others. The weighting factor is multiplied to the score in each respective column. The scores in each respective row are multiplied together.
Once the scores have been tabulated, the rows of projects can be sorted from the largest to the smallest “Priority Score”. The leadership of the organization can then staff the projects at the top of this list knowing they are selecting the projects with the best impact and highest chance for success of the business. Once any of these projects are completed, the remainder of the list includes other potential projects to be assigned. This list can be added to and adjusted on a regular basis. A “best practice” is to refresh the list of projects on a quarterly or semi-annually basis.
I hope you found this information useful. If you have any questions or would like guidance on how to use this process and matrix, please feel free to contact the Iowa Quality Center at (319) 398-7101, or contact John Heise, CLSSMBB, CQM at (319) 400-0635 or send an email to firstname.lastname@example.org.