The Purpose Alignment Prioritization Model
The Purpose Alignment Model was created by Nick Nickolaisen and this is why it is also called the Nickolaisen Model. The model is used to help people prioritize work based on purpose. It helps us define the purpose of the product or project work that we are considering. When we know the purpose of the work, we are able to organize the project to attain the purpose of the work. It is also used to ascertain the purpose of business decisions and designs around purpose.
Designing around purpose usually at least breaks the project management triangle, but sometimes shatters it. The Purpose Alignment Model works like this. First, we measure our business processes and project requirements in two dimensions:
Y-Axis: The extent to which the process or requirement will differentiate us in the marketplace.
X-Axis: The extent to which the process or requirement is mission-critical.
These measurements yield the 4-Box Model shown below:
The rated requirements are then organized into four quadrants:
Top Right Corner: Differentiating
Activities in the differentiation quadrant are meant to make the organization excel. These processes and requirements are leveraged to increase market share and maintain a competitive advantage in the market. The goal here is to win customers and gain market share, so you would want to excel at these activities as this is what sets you apart from the competition. These activities should be your company’s claim to fame and are usually an extrapolation of your strategy. Under-investing in these activities will weaken your market share. Therefore, it is wise to invest your creativity in these activities.
Bottom Right Corner: Parity
The vast majority of our processes and requirements are mission-critical but not market-differentiating. The purpose of these processes and requirements is to keep us at parity with the marketplace. Although the organization doesn’t create any competitive advantage by performing these activities better than what is expected, these activities are mission-critical to your organization so do not under-invest or neglect these activities.
There’s no benefit in performing or delivering Parity processes and functionalities better than anyone else does. In fact, treating Parity processes and functionality as if they were Differentiating processes and functionality has very high costs:
Direct costs: Resources we spend to make these processes and functionality better than they have to be.
Indirect costs: Complexity we add in order to make these processes or functions unique, interesting, or innovative.
Over-investing in the Parity quadrant typically prohibits resources from being invested in areas that actually matter. We should design these parity processes and functions in a best-practices, simplified, streamlined, and standardized way.
Top Left Corner: Partner
Certain activities are non-mission critical for the organization but can still differentiate the organization from the rest, this is why the processes and functionalities in this quadrant, rate highly in market differentiation, but lower for organization operations. To generate more market share from these activities is to outsource these to a partner for whom these activities are differentiating and combine efforts to create this differentiation.
Bottom Left Corner: Who Cares
Those business activities that are neither mission critical nor differentiating should be performed as little as possible. These activities are aptly named the “Who Cares” activities.
Where do we use The Purpose Based Alignment Model? This model works well in the following situations:
Defining strategic and tactical business and IT plans
When we need to align business and IT priorities
When we have to evaluate, plan, and implement large system projects
With feature and functionality design
Managing project scope
Reduce resistance to process improvement initiatives
When we need to reduce waste
The Purpose Alignment Model provides us with a simple way to determine which activities to concentrate on, and also how to deliver them.