Priority Matrix Value Puts Spending into Context

The founders of Step Function FMC, an real estate and facilities management consultancy based in Chandler, Ariz., have developed a methodology for setting priorities that is customized for each company and adaptable to any situation. Priorities are defined, documented, and assigned a numeric weight—a Priority Matrix Value (PMV)—that is consistent at all locations globally, and all appropriate personnel are trained in how to apply the score to their projects.

“This is a programmatic solution to a very common problem,” says Glenn Hodge, Step Function founder and principal.

The first step is to determine the values, or drivers, that shape the corporate culture, and list them across the top of the matrix. At one company, for example, safety and environment are paramount in considering capital projects, so that category is assigned the highest possible value. Project cost, which frequently is considered a deal-breaker, is actually the least important factor at that corporation and is therefore worth the fewest possible points.

Company officials must then define rankings within in each driver. A “catastrophic” threat to safety, for example, is one that would have the potential to generate an environmental notice of violation or the loss of life. A project addressing that kind of issue would be given the highest score, while less urgent safety issues would receive a lower score. If the project had no impact on safety or environment, it would receive a “zero” in that category.

Each potential project is considered in the context of the matrix, and is ranked somewhere along each vertical column under each individual decision driver. The values are then totaled, generating a PMV for that project. When this method is applied consistently at every corporate location globally, all projects can be consolidated onto one list and ranked in order by their standardized PMV.

The flexible methodology is not limited to capital spending.

“A PMV can be created for any issue, from prioritizing personnel decisions to comparing contracts,” says Hodge.

–LW

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ISSN: 1096-4894

Fig. 1

Project Ratings

Across the top of the matrix are the drivers that shape corporate culture. Rankings are defined within each driver. Each potential project is considered in the context of the matrix, and is ranked somewhere along each vertical column under each individual decision driver.

Fig. 2

List of 'A' Projects

Each project is assigned a Priority Matrix Value and ranked in order with all other capital projects to facilitate capital budget priorities. (Image courtesy of Step Function-FMC.)