Reider’s Rule

We’ve been doing lots of work on prioritization recently. 

Choosing which projects to initiate, which products to choose, which initiatives to let fall.

Borrowing from the wonderful usefulness equation, we’ve been using a method of prioritization that seems to capture an element often missed.  Often, when people talk about prioritization, they are – without knowing it – assessing the subjective value of an initiative.  What’s often missing is how much effort is needed to do what is intended.  Indeed, the team members who know (or could know if asked) how hard something would be are not even involved in the conversation.

Let’s think through some examples … 

Should we build a new office, buy a new computer, or design a new website for the residency?  (or should we do all three?) 

Let’s prioritize.  If PRIORITY = VALUE / WORK .. 

Let’s first score value.  On a scale of 0-100 .. what’s the value of a new office building?  Well .. now it gets hard (all-of-a-sudden).  Value to whom?  How do we understand value?  Is value = revenue?  (I hope not) .. is value = better health for the people we serve?  (could be) .. is value = alignment with strategic goals?  (YES) .. so this is all of the above and much more.  So we’re going to need to canvas our teams, make sure that we score the “V” really well, yet understand that we’re probable guessing.  That’s ok.  Guess.  We can always change it.  I’m going to say that the value of a new office building is 70.  Why?  We have an office.  It’s suboptimal, and there are mice here (really!) but it works and most people are happy with it.  The rent is acceptable too.  A new one would, however, be fantastic, and the impact would be broad (we could really create an experience that is head-and-shoulders above what people have today – really change the way folks think about going to the doctor .. ) So .. shorthand:

Office = 70
Computer = 30 (serves small # of people, improves efficiency)
Website = 45 (attract new residents, explain the program without printing & mailing, show innovation).

Yes – it’s all pretty subjective / qualitative but that’s ok. 

Now: work. This one is easy but if we don’t incorporate it, we’ll just pick the highest value.  
Office: $100,000
Computer: $3000
Website: $2000
P=V/W  (we can multiply by 100 to get rid of leading zeros)
Office: 0.07
Computer: 1.0
Website: 2.25
—

So – the highest priority initiative is the website!

A few final thoughts:

a) Sometimes we use the square root of “work” to normalize work estimates
b) “Work” can be expressed as dollars or time or both.  To pull them together – we sometimes calculate cost of time (~ $100/hr) and then add that to the $$ so we are using the same denominator.

This really works – even if just to get a gestalt of what things look like.  If you go through this exercise and then look and say “that’s nuts!” then cool .. why do you think it’s nuts?  What needs to change?