Manage risks, but don’t eliminate them
Wait, what? When is it bad to eliminate risks? Many companies we speak with are keen to score their portfolio of initiatives across a number of dimensions like:
- Strategic fit
- Market value
- Development cost
- Technical risk
- Commercial risk
So far so good. The process goes awry when teams, seduced by the idea of simplicity, distill all the dimensions into a single score for each project. High strategic fit and market value are “good” and increase the score, while high cost and risk are “bad” and reduce the score.
And therein lies the problem. This single score approach will always reward low-cost, low-risk projects. Likely outcomes of prioritizing by this single score include: (more…)