Choosing Between Six Must-Do Investments
Meridian Logistics has three product teams and a 12-month, €18 million portfolio. Six initiatives are competing. Regulatory reporting must be delivered within five months or the firm faces fines; estimated cost of delay is €400,000 per month after the deadline. A customer portal promised to the top 20 clients has an expected €2.4 million annual benefit but high uncertainty; delaying one quarter may lose two clients worth €600,000 annual revenue. An internal data-warehouse replacement has a fixed vendor discount expiring in nine months and a €300,000 annual saving. A CEO-sponsored mobile app has no validated customer evidence and a €2 million price tag. A platform modernization would reduce lead time by 30% but pays back over 18 months. A small compliance-automation initiative has a €150,000 cost and avoids €250,000 annual manual effort. The CFO wants all six 'funded at 80%' to avoid politics. The head of product asks you to run a prioritization workshop and then defend the result to the executive committee.
1. How would you structure the prioritization workshop using WSJF, and what data would you insist on before scoring?
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WSJF is cost of delay divided by job size or duration. Cost of delay has three relative components: business value, time criticality, and risk reduction or opportunity enablement. I would not let the room score in absolute euros and then divide; use relative Fibonacci scales and ranges. Before scoring, require for each initiative: a measurable outcome, the expected benefit range, the time window and consequence of delay, dependencies and skills, a rough size range, and the confidence level. For regulatory, the benefit is avoided penalty and license to operate; for the portal, client revenue at risk; for the app, state unknown rather than inventing value. I would score in two passes: first time criticality and value separately, then job size, and show sensitivity. I would also cap work in progress: with three teams, six funded initiatives at 80% is overcapacity. The output is not a rank order but a sequence with explicit deferrals and review dates. If executives disagree, we test assumptions, not argue scores.
2. Using cost of delay and job size, what sequence would you recommend? Show your reasoning, including dependencies and uncertainty.
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First, separate must-do-by-a-date from should-do-when-valuable. Regulatory reporting has a hard five-month deadline and a stated €400,000 per month penalty after it. Its cost of delay is high and time-critical, and failure is not a portfolio trade-off, so protect capacity for it. Small compliance automation is €150,000 for €250,000 annual saving, roughly €21,000 per month, and is small; it can run alongside if it does not consume scarce regulatory skills.
Portal: delaying a quarter risks two clients worth €600,000 annual revenue, about €50,000 per month of recurring revenue plus relationship damage. Relative to the small automation it is more time-critical and larger, but it needs discovery to reduce uncertainty. Sequence it immediately after the regulatory critical path starts, with a thin slice.
Warehouse: €300,000 annual saving is €25,000 per month, plus a vendor discount expiring in nine months. Treat the discount as a deadline with a real but bounded cost; schedule if capacity exists.
Platform modernization: 30% lead-time reduction has an 18-month payback; it is an enabler, not an early value item. Fund a small enabling slice.
Mobile app: no validated evidence, €2 million. Do not fund full build; fund a two-week discovery with a kill criterion.
Recommended order: regulatory plus small compliance; portal discovery and thin slice; warehouse before discount; platform enabling slice; app discovery last. Re-score after discovery.
3. The CFO wants all six funded at 80% to avoid politics. How do you respond, and what do you recommend to the executive committee?
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80% funding for all six is still a prioritization decision, just a hidden one: it spreads three teams across six initiatives, increases queues, and makes every initiative late. With three teams on a 12-month horizon, the portfolio has a capacity limit; adding work does not add capacity. I would show a simple capacity model: three teams times 12 months equals 36 team-months, minus the regulatory critical path and support. Then show that six parallel initiatives at 80% implies more than 100% of available capacity once dependencies and leave are included.
Recommendation: fund a portfolio, not projects. Approve regulatory and small compliance now; approve portal discovery plus a thin slice; approve warehouse contingent on the discount deadline; approve a platform enabling slice; give the mobile app a fixed two-week discovery budget with a kill criterion. Publish explicit stop or continue dates and a reserve for unplanned work. To reduce politics, make the decision rules public and apply them to the CEO's app too. The CFO keeps a contingency reserve and a monthly value review. This is more defensible than spreading funds and hoping.