Running, improving and growing a business require prioritizing actions. Day-to-day decisions must be made about which processes to redesign, in which new capital equipment to invest, what products or services to market actively and which positions to fill in the organization. These decisions need to be based on priorities. Without an effective means of setting priorities, everything is important, which, in turn, makes nothing important.
A helpful tool for setting priorities is the “ICE” prioritization tool. ICE is an acronym for the three factors that should be considered whenever priorities are set: impact, cost and effort.
When considering impact, we are thinking of a relatively short time frame. In this rapidly changing world, we need things to happen quickly. Impact can be measured in sales growth, cost savings, quality improvement, better customer service and anything that benefits the company.
Cost must also be considered because it is a critical component of any operation. With limited funds, companies must choose wisely among various alternatives. Even the greatest idea might not be pursued if the cost is too high for a company to recoup.
Effort, the third factor of priority, must be considered in terms of resources available and time required. Companies are typically operating with fewer employees, which makes effective allocation of human resources critical.
The ICE tool uses weighted values for each of these three factors to help establish priorities in an objective, straightforward manner. The higher the total of these values, the higher the priority.