Approving People and Projects in Batches

Quick Insight

It’s easier and more effective to prioritize a list of proposed employees at once than deciding each sequentially over time.  Approving projects as a package may promote a more appropriate risk tolerance that increases performance.

At one company I worked at, we stopped approving new positions one by one. Instead, we approved a batch of new positions each quarter. It’s easier and more effective to prioritize a list of proposed employees at once than deciding each sequentially over time.

By deciding quarterly, we may have limited some departments’ ability to keep up with demand. On the other hand, we could make decisions during the year that fit a constantly changing business environment.

Behavioral finance studies have shown that managers tend to be overly risk-averse when approving projects one-by-one. Approving projects as a package may promote a more appropriate risk tolerance that increases performance.

Can grouping decisions into packages improve your ability to prioritize them? It may lead to better resource allocation and risk management.

- Rob Stephens
Founder of CFO Perspective and the Finance and Strategy Toolkit (FAST)

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