Why Use an Economic-Based versus a Resource-Based Prioritization Model

We have all heard a variation on the justification to *not* undertake certain tasks that runs something like: “but we don’t have anyone who has time to do that.” Many organizations prioritize their work based on who is capable and available to do it.

Using a resource-based prioritization model, however, is a dis-service to your organization. 

When you prioritize work based on who is both capable and available, you are missing the opportunity to do the right thing for your organization. You are also missing a more fundamental opportunity to determine whether you have the right people with the right skillsets to do the things that will bring the most value to your organization! Prioritizing work independently of who will do it, and whether they are capable, does not necessarily mean cutting heads and hiring different people. Rather, it can lead to stimulating conversations with your existing team that can open up new opportunities for skill development and career growth. Although you may have to invest in additional resources and/or capability building in the short term, in the long term you will consistently be up-leveling your team, and allowing your organization to grow even more.

Now considering that you are not going to prioritize based on who is capable and available, how will you prioritize?

We recommend an Economic-Based Prioritization Model. 

There are many Economic-Based models that have already been created, many of them under the rubric of an Agile Framework.  AJC also has created our own prioritization model based on business value that we adapted from the Failure Mode Effect Analysis. This tool is best suited to prioritizing new initiatives within the organization given finite budget, time, and/or talent.

Here we will discuss the Weighted Shortest Job First, or WSJF (pronounced “Wiz-Jif) model. This model is helpful when prioritizing tasks or jobs for which a similar resource pool will complete the necessary work. Specifically, WSJF uses a relative-scoring system to calculate an internal “Cost of Delay,” which then is weighted by the task or job size or duration.  Once this final weighted score is determined, the various tasks or jobs can be prioritized from greatest value to smallest to lead to an objective or Economic-Based prioritization sequence. The formula is as follows (with the Greek symbol that looks like a capital “E” meaning “Sum”):

In this way, the specific components summing to an Economic Cost for the business are directly proportional to a higher weighted score.  It also takes into consideration the size of the work, and in the denominator, larger jobs are inversely proportional to a higher weighted score and will be de-prioritized.  This formula, therefore, leads to a bias towards prioritizing for “Quick Wins,” allowing the organization to realize the most impactful economic tasks or jobs in the shortest time possible, building confidence and space for the team to learn new skills that will help them undertake future items.

Indeed, the Job Size / Duration value is a way to relate the Weighted Score to the current ability of resources within the organization. If someone exists internally who is both capable and available to perform the work, the size will be smaller (they know what to do) and will take less time (they are already available to do it).  If not, however, the organization will have to find resources that know what to do (adding to the job size) and spend the time doing that (adding to the duration).

Thus, the WSJF model does indirectly allow for both capability and availability of resources, without diminishing the Economic value or Cost of Delay to the organization for the task or job.

Ultimately, however, understanding the true Cost of Delay, or Economic value, any particular job or task has for an organization will allow the leaders to identify development opportunities for their team, and/or highlight gaps for additional or new skills needed  to best provide the greatest value to the organization in the future.