A priority label looks like a statement of importance. It is a statement about which variable you have agreed to let move — and only one label leaves resources as the variable.
Someone puts a paper in front of you asking that an initiative be designated critical. The word costs nothing to say and everyone in the room wants it said, because the alternative sounds like a demotion. You agree. Nothing appears to have happened: no money has moved, no plan has changed, no contract has been signed.
Something has happened. If the objectives of that initiative are fixed and its delivery date is fixed — and that is normally what makes people call it critical in the first place — then the only remaining variable is what it will consume. You have just undertaken to supply whatever it takes. Derek Lidow, writing in the Project Management Journal in December 1999 from a chief executive's chair rather than a consultant's, put it in the plainest available terms: to commit to a critical project is to write a blank cheque as far as resources are concerned.
Most organisations have written a dozen of them, against one account, and never noticed.
The Strategic Context
Priority systems in most enterprises are ordinal. Initiatives are ranked, or bucketed into tiers, or given a colour. The implicit logic is that the label communicates importance, and that importance is a reasonable basis on which to break ties when two initiatives want the same engineer in the same fortnight.
Lidow's taxonomy does something different and more useful. It classifies an initiative not by how much anyone cares about it, but by which of its three intrinsic elements is allowed to vary — objectives, timing, or resource requirement.
| Label | Fixed | Variable | What the organisation has undertaken |
|---|---|---|---|
| Critical | Objectives and timing | Resources | To supply whatever is required, as required. The initiative fails if it is not supplied |
| Important | Resources, and one of objectives or timing | The other of objectives or timing | To fund a known envelope, and to accept that either the date or the scope will move |
| Desirable | Nothing | All three | To progress it with whatever is spare, and to expect interruption |
Read as a communication device the taxonomy is unremarkable. Read as a commitment register it is uncomfortable, because it converts a word everyone uses loosely into a specific undertaking with a cost the organisation has not modelled.
What Leaders Commonly Misread
That the label describes the initiative. It describes the organisation's posture towards it. Two initiatives of identical strategic value can carry different labels legitimately, because in one case the date genuinely cannot move and in the other it can. Conversely, an initiative everybody agrees is vital is not critical in this sense if the enterprise is unwilling to fund overtime, contractors and expedited procurement to hold its date. It is important, and calling it critical is a description of enthusiasm rather than of intent.
That having many top priorities is a sign of ambition. Lidow's judgement is that it is illogical to make every project a top priority, and his explanation of why is the part worth carrying into a board discussion. Sponsors over-commit, he argues, because they believe success springs from doing more with less. What follows is not heroic effort but a specific organisational injury: in a place where everything is top priority, only the least experienced people can be expected to tackle their assignments wholeheartedly, because the more seasoned ones have already learned that their best efforts are likely to be futile.
That is a claim about behaviour, not about arithmetic, and it is the reason inflation of priority labels is more damaging than it looks. The visible cost is contention. The invisible cost is that the organisation's most capable people quietly stop believing the signal, and thereafter allocate their own discretionary effort by private judgement — which the enterprise neither sees nor governs.
That the lowest tier deserves lighter tracking. It deserves no progress tracking, which is a different and much stronger claim. Where all three elements are negotiable, Lidow observes that tracking progress will demoralise the team and waste time, and that conventional delivery method is not useful for managing such work at all. Reporting on an initiative that is legitimately subject to interruption manufactures a variance every month and then asks somebody to explain it. The reporting does not improve the outcome; it converts a sensible flexibility into a recurring failure narrative.
Reframing the Issue
The reframe is to stop treating priority as a ranking and start treating it as a class of commitment, each with a different balance-sheet consequence.
A critical designation is an open-ended resource undertaking. An important designation is a funded envelope plus an explicit acceptance that either scope or date will give. A desirable designation is an option, not a commitment, and options should not be reported as though they were commitments.
Stated that way, three questions become answerable that a ranked list cannot answer. How many open-ended undertakings can this organisation actually honour simultaneously? Where is the reserve that a critical designation implies, and who holds it? And when two critical initiatives collide — which is arithmetically certain once there are more than one or two — which cheque bounces, and who decides?
This is not the same question as which initiatives should be in the portfolio at all. [Related article: Is Your Portfolio Function Selecting, or Supervising?] deals with selection; this article begins after selection, at the moment a label is attached to something already committed. Nor is it a question about how a constraint set should be read to understand what an initiative is like — [Related article: Read the Constraints, Not the Deliverables] owns that ground, and the distinction matters: there, the constraints tell you what kind of leader the work needs; here, the label tells you what the funder has promised.
Strategic Analysis
The blank cheque nobody prices
Consider a national postal and parcel operator, hypothetically, entering a year with four initiatives designated critical: peak-season network readiness, a regulatory reporting change with a statutory date, an automation rollout at two sorting centres, and a cyber-resilience uplift.
Each designation is individually defensible. Collectively they commit the same finite pool of engineering, change and operations capacity four times over, on an open-ended basis, with no reserve identified against any of them. The organisation has not made a bad decision; it has made four reasonable decisions and never summed them.
What happens next is predictable and is usually mistaken for a delivery problem. Each initiative discovers, separately, that the resources it was promised are not there when required. Each escalates. The escalations arrive at different forums, at different times, described in different language, and are resolved case by case — which means the actual prioritisation is being performed, invisibly, by whoever escalates most persuasively.
The remedy is not to designate fewer things important. It is to recognise that the number of simultaneous open-ended commitments an enterprise can honour is small, and is a capacity question with a knowable answer. Lidow's own practice was to assign critical priority to very few initiatives and to allocate ample resources to desirable ones on the explicit understanding that those resources were on call for critical efforts — a standing reserve, named in advance, rather than a raid conducted under pressure.
The commitment that names nothing
The same failure appears one level down, in the instrument that is supposed to distribute the work. Teaching material on human-resource planning offers a responsibility assignment matrix as the artefact that ensures every team member understands their responsibilities. In its own worked example, across thirteen decomposed activities, the project manager is the only party ever marked responsible and the sponsor the only party ever marked authority. Four functional managers appear solely as collaborate.
Collaborate names no deliverable, no date and no consequence for non-participation. It is a priority label in miniature — a word that reads as commitment and specifies nothing — and it fails for the same reason. What the receiving manager has actually undertaken is unstated, so nobody can tell whether it has been honoured until the moment it has not.
The pattern is worth naming because it recurs at every level of an organisation: the more senior the artefact, the more likely it is to record intent without recording obligation. How that obligation should be collected once it is specified is a separate discipline, taken up in [Related article: Most of Your Plan Is Somebody Else's Promise].
When the problem is not resources at all
Lidow offers a diagnostic that deserves wider use, because it prevents a common and expensive misdiagnosis. If an initiative still has resource problems after its scope has been reduced and appropriate resources have been made available, then the constraint is not resources. It is motivation or capability — either the team is not committed to the objective as stated, or a required skill is absent and nobody has said so.
The practical value of the test is that it stops a certain kind of escalation loop, in which more people are added to an initiative that does not have a headcount problem, each addition slows it further, and the slowing is read as confirmation that still more people are needed. An executive who has run the test once will recognise the pattern for the rest of their career.
Decision Framework
The instrument is a priority ledger. It has one row per initiative carrying a top-tier label, and five columns.
| Column | What it records |
|---|---|
| Fixed elements | Which of objectives, timing and resources genuinely cannot move — evidenced, not asserted |
| The undertaking | What the enterprise has therefore committed to supply, in plain words |
| The reserve | Where the resources implied by that undertaking are held, and who releases them |
| The collision | Which other top-tier initiatives draw on the same reserve |
| The arbiter | Who decides, in advance, which commitment yields when two collide |
Three tests apply.
The date test. For each critical designation, ask what specifically happens if the date moves by one month. If the answer is a statutory penalty, a contractual liability or an irreversible external event, the date is genuinely fixed. If the answer is that it would be disappointing, the initiative is important, not critical, and relabelling it costs nothing and releases real capacity.
The reserve test. For every critical designation, name the reserve. If no reserve exists, the organisation has issued an undertaking it has no mechanism to honour, and should either create the reserve or change the label.
The tracking test. For every initiative in the lowest tier, ask what decision the monthly progress report informs. If none, stop producing it. The reporting effort is a real cost, and the variance narrative it generates is a fiction that damages the credibility of reporting elsewhere.
From Strategy to Execution
Immediately. Count the top-tier labels. Not the initiatives, the labels. In most enterprises the number is several times what the reserve can support, and the count is not a matter of opinion.
Over the next two quarters. Attach the undertaking to the label. Every critical designation carries a named reserve and a named arbiter, recorded where the portfolio is governed rather than in a delivery plan. Where a reserve cannot be identified, the label is downgraded — and the downgrade is communicated as a clarification of what was always true, not as a withdrawal of support, because that is what it is.
Longer term. Make the label a decision with a cost attached rather than an adjective applied. The design goal is that no one can request a critical designation without also nominating the reserve, in the same paper, at the same time. That single procedural change does most of the work, because it moves the conversation from how much this matters to what we are prepared to hold back for it.
Note the boundary with sponsorship. What a label commits the enterprise to is a different question from what a sponsor personally owes an initiative, which [Related article: Sponsorship Is an Office, Not an Endorsement] addresses. A well-filled sponsor's office does not by itself create a reserve.
Signals to Monitor
- Growth in the top tier without growth in the reserve. The clearest early indicator that labels are inflating.
- Escalations resolved individually rather than comparatively. When two critical initiatives compete and the answer is reached in separate forums, prioritisation has moved out of governance and into persuasion.
- Experienced staff volunteering less. Consistent with Lidow's observation about futility, and visible long before it appears in attrition figures.
- Contractors engaged reactively at premium rates. Often the first financial trace of an unfunded critical undertaking meeting reality.
- Lowest-tier initiatives generating monthly variance reports. Effort being spent to document a flexibility the organisation deliberately chose.
Questions for the Leadership Team
- How many initiatives currently carry our top priority label, and where is the reserve that each one implies?
- For each of them, what specifically happens if the date moves by a month — and is that answer evidenced?
- When two top-priority initiatives compete for the same people, who decides, and is that decision recorded anywhere?
- Which of our labels would survive being restated as an undertaking — "we will supply whatever this requires" — in front of the people who would have to supply it?
- What are we tracking that we have already agreed may be interrupted, and what decision does that tracking inform?
- What would our most experienced delivery people say about whether our priorities are real?
Closing Perspective
Priority inflation is not a communications failure and it will not be fixed by a stricter taxonomy. It happens because the label is free at the moment it is granted and expensive only later, in a different forum, to a different person.
The correction is to move the cost forward. A designation that arrives with a named reserve and a named arbiter is a decision an executive can actually make, weigh against alternatives, and be held to. A designation that arrives on its own is a word, and words allocate nothing.
What follows from that is a discipline the rest of the portfolio depends on: the enterprise's capacity to honour open-ended commitments is small, knowable, and worth protecting — and the initiatives that most deserve protection are the ones whose case survives being priced. The same principle applies to the numbers in the paper as to the labels on it, which is the subject of [Related article: From Estimate to Commitment]. And it applies, finally, to what the organisation will call a success when the work is done — [Related article: Who Is Entitled to Say It Worked?].
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