doesn’t have sufficiently detailed history or performance models to develop credible detailed metrics (although this is a future goal). What we came up with for the interim was a line item on the description template that asked the author to rate his or her confidence that the proposed initiative would accomplish its stated purpose on a 1-to-5 scale (1 being “doubtful” and 5 being “very confident”).
All things being equal, when considering possible initiatives we might expect an organization to simply favor cost-effective projects whose proponents are “very confident” they will achieve strategic goals. Imagine you have $100 to invest in projects, and there are twenty projects proposed that are rated 5 to achieve their goals if funded for $20 each. In simplest terms, you can only fund five of the twenty projects, so you would pick five winners and fifteen losers and be done.
Most executives wish portfolio selection were that easy. Fortunately, the complexity of the real world can also offer richer alternatives. Imagine that in addition to the twenty projects that were rated 5, there were fifty others that were rated 3 and only required a $1 investment. (For purposes of our discussion, let’s assume that the amount of “goodness” that comes from each successful initiative is comparable.) Funding some of these lower-cost, higher-risk initiatives as part of your portfolio might increase the overall chances of accomplishing the mission.
Mindful of JFK’s admonition about tepid commitment, I realized it would also be interesting to get a sense of funding sensitivity for different projects. If an initiative were not fully funded, was it worth funding at all? Some projects funded at a 50-percent level might generate 50 percent of the value. (In farming, planting half of your field versus the whole field yields about half the crop. In marketing, buying half of the ad space might result in roughly half the product awareness.) Other projects, like the moon mission, would be a waste of time to fund at a 50-percent level.
To get a sense of funding sensitivity, we followed our original 1-to-5 confidence item on the template with an item that asked about the confidence that a proposal would still accomplish its goals if funding and staffing were reduced 50 percent—also indicated on a 1-to-5 scale. The intent of this measure was to let the executive team know whether this proposal could be eligible for funding reduction, allowing potentially more initiatives to be considered for funding. The results captured some interesting information in an admittedly crude but useful way.
If a $20 project was judged to be a 5 on our scale to accomplish its goals if fully funded and a 4 on our scale to accomplish its goals if partially funded, then this project was a candidate for selection and negotiation at a reduced funding level. The bottom line is that this allowed executives broader choices to promote more projects, even though some were not fully funded. If a $1 project was a 3 to accomplish its goals if fully funded and still a 2 if half funded, this increased options for high-risk, high-reward projects even in tight fiscal times.
My purpose for sharing this is to give you an opportunity to consider your projects in a larger organizational context. At a strategic level, this is important if you have to negotiate for funding or other resources in an environment where multiple projects are competing for attention, particularly when resources are constrained. If your project’s resources were cut by 20, 30, or 50 percent, would the project still be worth doing? Are there aspects of scope