One of the issues that most concerns Product Owners and Product Managers is the prioritization of the backlog (or the roadmap) and they ask us for prioritization techniques or the magic solution to their prioritization problems.
Although it is a fundamental issue, the reason why we deal with this module near the end of our Lean Product Management workshop is because in order to prioritize correctly, a few things must be clear before, otherwise we are just constantly improvising:
- Business Model of our product
- Product life cycle stage
- Purpose, vision, principles or your company
- Business strategy
- Business Objectives
- Product vision
- Product strategy
- Product Objectives
- Metrics Framework
- Economic Framework
If any of the above points is missing, our prioritization will be a constant headache and we will be at the mercy of arbitrary, political and wishful thinking criteria. On the contrary, if all points in the list are clear to everyone in the organization, prioritization should be a matter of seconds for anything in the pipeline; from big initiatives to single user stories or technical tasks.
In addition, if our product team is not a real product team of a Lean organization, we will be exposed to disjointed and inconsistent requests from other departments or stakeholders.
There are different prioritization techniques depending on what we are prioritizing. It is not the same to prioritize an investment portfolio, than some experiments or functionalities of a mature product.
Assuming all of the above is in order, we will review some important issues before discussing prioritization techniques.
¿Why do we Prioritize?
Before looking at prioritization techniques, the reason we need to prioritize must be very clear. And, believe me, I would not be writing this if it were because this question is very clear in all companies.
Lean implies doing the most important thing, to the right extent at the right time. And, this that seems so simple, is the most difficult. As Product Managers, Product Owners or Business Owners we are always wondering what is the next thing we will do with the limited resources we have.
There are always more ideas and more work than capacity and resources available. Therefore, the reason we prioritize is to maximize the value generated for our organization. That value can be in the form of learning, validation of ideas, sizing market opportunities, brand recognition, new customers or income.
Any prioritization technique must respond to this criteria or we will be prioritizing for the wrong reason.
Wrong Prioritization Techniques
If you are using any of the following prioritization techniques, your organization has a serious problem, and the solution is not to prioritize better. The solutions is but to look at the organizational structure and strategy, and make sure the previous ten points are in place.
Here is the list of wrong prioritization techniques widely used still nowadays in many companies:
- HIPPO (Highest Paid Person in the Office)
- Committee consensus
- Analysts opinions
- Requests from Support / Sales / Marketing / Management
- Copy competitors
- Cost (Story Points, …)
Important vs Urgent
Many teams live under the tyranny of the urgent. Everything is urgent and important. But that is never true, the problem is that they do not know how to differentiate what is urgent from what is important.
If something is urgent and important we have to do it immediately. What needs to be prioritized is what is found in the NOT URGENT – IMPORTANT quadrant.
Prioritization Techniques – Importance
To know if something is important we can ask ourselves the following question: Should we work on it at all?
The answer to this question should be unequivocally obtained from the purpose, vision, principles and objectives of our organization, and from the vision, strategy and objectives of our product.
In our Lean Product Management workshop we study some prioritization techniques that help us determine the importance of an idea, a product, a project or an experiment, and that depend a lot on the stage of the life cycle in which we find ourselves:
- Business Model Canvas
- Lean Canvas
- Financial Viability
- Reverse Income Statement
- Net Present Value (NPV)
- Critical Path (Customer Journey)
- Opportunity Score
- Desirability / Feasibility / Viability
Once we pass the importance filter, we go for the order.
Prioritization Techniques – Sequence
Among all that is important, we must decide what we do first. That is, we have to sequence the work. Answering the question: When?
For this we must determine the expected results of each job. That is, the value generated for the organization.
In our Lean Product Management workshop we study prioritization techniques that help us determine the ordering of ideas, products, projects or experiments:
- Cost of Delay
- Risk Profiling
- ROI Scorecard
- Google’s H.E.A.R.T.
Lean Product Management Guide
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