Project Selection Criteria - Videocast

Summary

The video script discusses the critical challenge of project selection and prioritization in companies, particularly using a mining company as an example. It emphasizes the importance of a multi-criteria decision-making process that goes beyond financial aspects. This includes strategic alignment, urgency, stakeholder support, and human resources, both in terms of motivation and knowledge. The speaker argues that the best project is not always the most profitable but the one that aligns with a comprehensive set of criteria, ensuring better decision-making and overall success.

Takeaways

• 🔍 Companies face the challenge of selecting and prioritizing projects due to limited resources like people, money, and time.
• 💼 A multi-criteria decision-making process is essential for project selection, rather than relying on subjective judgments.
• 💰 The first set of criteria for decision-making includes financial aspects like return on investment, profit, and cost-benefit analysis.
• 🎯 Strategic alignment is crucial; projects should align with the company's strategic goals and objectives.
• ⏰ Urgency plays a significant role in prioritizing projects; time-sensitive projects like the World Cup preparation take precedence.
• 🤝 Stakeholder support is vital; projects with more support from shareholders, management, and the community are more likely to succeed.
• 👥 Human resources are a critical factor; projects should involve motivated and knowledgeable team members to ensure success.
• 🧠 Knowledge and skills of the team are important; projects that require expertise beyond the team's capabilities introduce risk.
• 🌐 Not always the most profitable or technologically advanced project is the best; sometimes, simpler, more accessible projects can be more successful.
• 🌟 Success is determined by a combination of many factors, not just financial or strategic; a holistic approach is necessary for better decision-making.

Q & A

What is one of the biggest challenges companies face in project selection?

One of the biggest challenges companies face is selecting and prioritizing projects due to limited resources such as people, money, and time.

Why is it important for a mining company to choose the right projects?

Choosing the right projects is crucial for a mining company because it ensures that they invest in opportunities that align with their financial goals, strategic objectives, and resource availability.

What is a multi-criteria process and why is it used in decision-making?

A multi-criteria process is a decision-making approach that considers multiple factors such as financial aspects, strategic alignment, urgency, stakeholder support, and human resources. It is used to ensure a comprehensive evaluation of projects rather than relying on a single criterion like financial return.

How does financial criteria play a role in project selection?

Financial criteria such as return rate, profit, cost-benefit analysis, and other financial metrics are critical in project selection as they help assess the economic viability and potential profitability of a project.

What is strategic alignment and why is it important in project selection?

Strategic alignment refers to the degree to which a project supports and advances a company's strategic goals. It is important because it ensures that projects contribute to the long-term objectives and overall direction of the company.

Why is urgency a factor in project prioritization?

Urgency is a factor in project prioritization because it reflects the time sensitivity of a project. Projects that need immediate attention or have strict deadlines are prioritized higher to meet those time constraints.

How do stakeholders influence project selection?

Stakeholders, including shareholders, management, government, and society, influence project selection by providing support or posing challenges. Projects with more support from stakeholders are likely to face fewer obstacles and are thus prioritized.

What role do human resources play in the project selection process?

Human resources play a critical role in project selection as they determine the availability, motivation, and knowledge of the team members needed to execute the project successfully.

Why is it risky to undertake a project with a team that lacks the necessary knowledge?

Undertaking a project with a team that lacks the necessary knowledge increases the risk of project failure, as the team may not have the expertise to handle the complexities and challenges that the project presents.

What example is given to illustrate the importance of considering non-financial aspects in project selection?

The example of Korean products being successful in certain markets despite not being the most technologically advanced illustrates that non-financial aspects like market fit and affordability can be more important than just having the best or most expensive product.

What is the significance of considering the whole picture when making project decisions?

Considering the whole picture when making project decisions is significant because it allows for a more holistic approach, taking into account various aspects beyond just financials. This leads to better decision-making and a more balanced project portfolio that can drive the company to success.