Project Selection Criteria - Part 2 of 2

In the second installment of a two-part series, Ricardo talks about other criteria that should be considered while selecting projects. He explains that the weight of each criterion depends on the company's scenario, and that the selection of projects for the portfolio must be made using multiple criteria.

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Episode transcript

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Hello. Hi, everybody. Welcome to the five minutes PM. Podcasts today. I'm like to continue the discussion Project Selection Criteria last week I focus mostly in the financial aspect in the strategic fit I spent most of the time talking and how important is to open our mind and do not think only, and exclusively in the financial aspect, it's a limited, a very limited bill. And now I'd like to, to give you other examples of Criteria is that you can use in your portal, all your management process to select your projects.

First one, we're GNC some projects. They are only available, and they have only reason if we do them now, maybe in the near they're pointless, there is no meaning to do that because the opportunity that has gone so urgency, it's something that can change the landscape. For example, I have one project that that is less profit, but in your other hand, this strategic fit and the urgency, it's extremely high.

Now, then this project, we will move up in your list. Second Criteria it's because you too, man, the stakeholder commitment, it's easier sometimes to do a project that will have less profit, but much more commitment from the stakeholder and the customers. It's real important because sometimes you decide to do a project that is extremely profitable.

The internal rate of return is a huge, but there's no commitment. And again, as I said, many, many times people is behind of everything. People's behind of everything. If they're not committed, you will be facing a problem from the beginning to the end. So this is very important if you compare, okay, the customer, the stakeholder is more or willing to support which of the two, the next one is the real level of risk.

Or sometimes I have a Project that will result in less profit. But in your other hand, the risk is much less regarding the tracts. So for example, okay, maybe it's better to rent a one level, one of risk to have the level one, a profit, then a level 10 of risk to have level two of profit.

So this will change. Lot of the criteria that you are using to choose. The other one is the technical, the knowledge of the technical. Sometimes you do not having enough knowledge does, will raise in directly all the risks of that product. And sometimes in your hand, thank you. Knowledge is everything in technology is a key for your strategy. So the cutting edge, the province will go up into your list because of technology show two size of the same coin.

Next one, human resource, basically motivation and knowledge. Again, people's behind of everything. So some project, the team is much more motivated to do that than others. And maybe it's better for you. Okay? I will do this project that will lose on that aspect, but a lot of the motivation, the people we'll be much more willing to help.

So this is a trend knowledge. If I have a project where my team has a skill and knowledge to do this, we'll move them up into my list. This project will move up. Compare that to me with all the projects that I do not have any knowledge does in the risk management, the perspective, duration, Hort term projects. Usually I do not want to be generic here. Usually they are exposed to less external risks because you can control more, a timeframe of three months than a timeframe of for years, for years, the external environment, it's much more complex than to look the next 90 days.

So sometimes I will benefit short term projects. Imagine during this kind of crisis where the horizon is not clear and to finish this, Podcast think in Muti, Criteria moving. Criteria So, it's not one size fits all. A lot of people, they are looking to something magic. Okay, let me give you my spreadsheets. Just put one, two or three, and then you were done.

This is not the case. Every single company that I work at doing that it's a completely different formula, a completely different set of Criteria usually basically this 15 normal 17 Criteria is that I gave to you in this two podcasts, but using Criteria as, also as even much. And some of them, they are not easily measured like money, like say like months, like weeks and what we can do in this case, we use ratings like the the HP man did from one nine to nine.

So one nine Minutes it's much less relevant. You can wait. All of the criteria is inside of my basket. I don't mean that financial aspect. We will have the same level of relevance, of level of risk. It depends of your company. It depends off your business. So its not one size fits all. You need to understand the strategy of your company. Funny the behavior of your company to build the right criteria is in place.

Please do not build only financial criteria. Do you have a really important, but we need to understand that the company's in the projects are above and beyond money. And sometimes if you think only money, then you have a lot of trouble in a lot of areas. We need to have a much more broad view. And this is, was my intent in this too. Podcast I hope you enjoy it and see you next week with pinata for five minutes. Podcast bye.

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Project Selection Criteria - Part 2 of 2

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