Three Fundamental Questions for Strategic Decision Making

How to pick the right projects for the next year or the next thing to work on? Recently, this was the major point of discussion in the planning meeting of a non-profit organization. Irrespective of for-profit or non-profit status, all organizations and businesses have to make the same strategic decisions about picking and choosing projects.

To help this decision-making process, I have used everything from simple Business Model Canvas to more complicated tools to help organizations define their strategy. However, over time I have realized that there are only three fundamental questions that people need to answer to arrive at the right conclusion as I discuss below:

Question One: Why we want to do this project?

For any project, this is the fundamental question to answer. If there is no compelling reason to do a project, everything else is simply irrelevant. The compelling reason may be different for everyone but it must be there. A compelling reason is something so important that you are willing to give up other priorities. For businesses, examples of a compelling reason may be something very critical to stay in business, or build a new technology to gain major competitive edge, or achieve growth that otherwise would not be possible. Sometimes the compelling reason may be rooted in values and mission that define an organization.

If you can’t find a compelling reason for a project, there is no need to bother for answering the remaining two questions.

Question Two: Is this worth doing?

The second question is the next logical step to make sure the project will provide a significant advancement to the cause (the why question). There are always more than one paths to achieve an objective: Is this project the right one? Or, in other words, is this project worth spending energy, time, efforts and money? Any organization should seriously consider all available options to pick the one that makes it worth doing.

Question Three: Do we have capacity to do it?

In some cases, you could have a compelling reason to do something that is worth doing, but may not have the capacity to do it. There could be a number of reasons: The project may be too big, or too complicated, or your organization may not be able to absorb a big change, or you may not have a passionate champion to get it done. So, before you embark on an initiative or a project, it is critical that you are sure about the capacity of your organization to make it happen.

To answer the above questions, you can use a scoring mechanism for all available options. I would recommend a scoring range of not more than 1-5. With large ranges, it becomes too confusing and arbitrary to assign scores to these questions. A range of 1-3 would be even better. For each project, work on a compelling reason first. If you can’t find a reason that maps to the highest score, there is no need to bother for answering the remaining two questions.

Why a compelling reason is so important? Please watch the following short video by Simon Sinek.

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