I have more things to do than time to do them. I know I'm not alone in this. We are constantly fielding requests, interruptions, notifications, communications, and distractions. Being able to prioritize how we spend our time is essential. It's so essential, that we actually ask in our boarding interviews how candidates prioritize competing tasks.
Here's a technique I've been using that you may find helpful (or at least be able to put in your back pocket for your next interview).
Urgent vs. Important
First, we need to distinguish between what is urgent and what is important. Urgent tasks are those that demand our attention. Important tasks are ones that are truly valuable. All tasks have some level of urgency and importance but it is extremely easy to be distracted by in-your-face urgent tasks at the expense of ones that are actually important.
By way of analogy, consider this scenario:
You are a medieval hero sworn to protect your monarch. The most important thing you can do is protect that monarch's life. It is your duty and the good of the land depends on it. When your monarch is kidnapped, you spring into action and find the keep where they've been imprisoned. Innumerable enemy guards stream from the fortress and you battle valiantly against the tide. Although your skills are legendary, their sheer numbers will eventually overwhelm you.
You face the extremely urgent task of defending yourself against each of these guards. However, constantly facing these tasks won't ever help you complete your one important objective: rescuing the monarch. By focusing on the important, other options may become available but you must be willing and able to forgo the urgent. By beating a retreat now, perhaps a more clandestine approach becomes viable. Only by prioritizing the important task can it ever be accomplished.
(This is inspired by and paraphrased from http://abetterlife.quora.com/How-to-master-your-time-1)
Using Urgency and Importance for Prioritization
The simplest way to benefit from thinking this way is just to acknowledge that there is a difference between urgent and important. Understand that just because something is demanding your attention right now doesn't actually mean it's the most valuable way to spend your time. This little bit of perspective makes it easier to reject a distraction or say no to a request to help you stay on top of what you need to do.
We can go further, though. If we think of urgency and importance as being binary properties (i.e. a task is important or it's not), then we can come up with a grid to classify any task we face.
(image from http://leap-start.com/urgent-vs-important/)
Ideally, we can stay focused on tasks that are important and not urgent to keep stress down and enable longer terms thinking. Tasks that are urgent and important need to be dealt with quickly but can hopefully be avoided by managing them early (i.e. before they become urgent). Tasks that are urgent but not important should be ignored, avoided, or delegated so that they don't waste your time.
Personally, I think that urgency and importance are more of a spectrum and I needed a way of prioritizing tasks based on these relative values. For my own use, I created a spreadsheet where I could list my tasks and then assign values from 1 to 5 for urgency and importance. I also added a column for effort (again, a value from 1 to 5). It doesn't really matter what the number means, I just wanted an easy way to indicate that something was more important or more urgent than something else. I then generate a score for each task based combining importance and urgency and then dividing by effort so that quicker tasks get a higher score. Whatever task has the highest score is what I work on.
My own version is an Excel file but I've created a Google spreadsheet that you can copy and try yourself. Excel has more robust conditional formatting so I can actually highlight the item in the list with the highest score. I couldn't figure out how to do that with Google.
If All Else Fails
There is overhead to this technique and I sometimes fall prey to analysis paralysis or simply being overwhelmed. In the end, doing something is better than doing nothing. A while ago I created a very simple web app that just picks a random task from the list you provide. It can be surprisingly liberating. If that sounds like it's more your speed, you can try it out here: What Should I Do?.