Now that you’ve set your vision of where you want your company / portfolio / product to be, gathered data to better understand where you are (or how far away you are from your goal), and generated ideas on how to get there, it’s time to make some tough choices. I’ve always summarized the role of Product as “the people who decide what to do next” and this holds even more true during annual planning. Other team members inform the decision, but it is the product person’s responsibility to make it.
How do you choose what to invest your precious R+D resources in for the next year? The simplest answer is: the strategic initiatives with the highest value towards your vision, we’re going to dive in to how to evaluate that.
Some common prioritization frameworks that we DO NOT recommend:
Whatever CEO wants to do
Whatever the team wants to do
Each of those parties is an input — one top down, one bottom up — but neither should have the full sway of the roadmap. That’s because both groups are incredibly biased towards their particular goals. It’s the job of the product to strike a balance and include other perspectives into the final decision.
So how do you pick the winners? In Prioritization doesn’t need to be hard, Melissa Perri talks about how as a product leader, it is no longer your role to select the features to be built. Doing so is just as bad as if the CEO did. You have to enable your team with the strategic vision which acts as guardrails for them to perform some of the prioritization options below. Your role is to create frameworks within which they can evaluate their options and then to insist that they back up their decisions with data.
She discusses how one thing often overlooked as product teams compare the alternative routes to achieving goals is the Cost of Delay. When a product manager thinks about with this lens, they ask questions like:
What is the urgency associated with building a particular feature from a competitive landscape perspective?
What will you gain by releasing it sooner and serving customers faster?
Does the value of what you are going to deliver diminish as time passes?
If you can encourage your team to think about potential features in this way, they will be far more advanced than their peers at other companies. Generally, most product managers use Weighted Scoring, to rank the ideas they have collected, a process detailed below with the twist of data validation. We at ProduxLabs want to emphasize that without considering cost of delay, validating with data, and thinking about the impact on key accounts, big pieces of the prioritization puzzle are missing.
If your product team is going to use a weighted scoring protocol, here’s how we suggest it should be done. When you collect inputs from various teams, you might assume the “high priority” items list would get very long, but as Helmut Steuber, who leads Product Operations at the Continuous Testing platform Tricentis, said to me the other day: “Once we consolidated and ranked items, the winners were clear.”
First, connect all of the collected ideas to your strategic intents by simply tagging which options will impact on those items. If you have a spreadsheet with all of the requests, add columns for New Logos, Retention, Cost for Acquisition etc. and start marking each row appropriately if the initiative would positively impact that goal. This will allow you to sort for the options which generate value for each strategic intent. You can also see which options will have the broadest impact if they are tagged in multiple columns.
Alternatively, you could look at how often an idea was brought up by the various groups you gathered information from, but that should only be directional. It’s your responsibility to check what they are requesting for biases and to validate opinions with data. This is crucial with comments from the sales team, who often say they’ve lost a deal because a particular feature was missing. If you dive deeper, you learn that the prospect was not the target customer and would have had many other unmet needs beyond the showstopper they encountered.
To help decide which items will have the biggest potential value, rank each of them as High, Medium, or Low for what has been identified they will impact. Ideally your team can quantify the options with dollar amounts, but if the information is limited, that can prove to be difficult. That is where often we resort to something called weighted scoring — which is only effective if you have data that backs up your reasoning. Each option is given a numeric value and higher numbers are assigned if specific focus areas are selected to outweigh the others. Again, this is only effective if you have data to back up why you have selected the score.
This brings us back to the importance of looking at that data you gathered. As you have looked at the segments where you are winning and losing and the research around those groups needs, do the ideas presented match up? Can you look at frequency of customer service tickets with specific tags to validate the concerns are real? One option is to take the options which are rising to the top of the rankings and send a survey to Sales and Customer Service representatives asking them how often they encounter that request (once a day, week, month, quarter, year) to attempt to quantify the impact of fulfilling it.
Data is more informative and concrete than consensus and gut feel. You want to lead a team of product manager who rely on cold hard facts to support their choices, not subjective rankings filled with bias.
The last item to include in your prioritization framework is Impact on Key Accounts. In order to do this, data is utilized to identify which customers drive the biggest revenue (and potentially referrals) for you. Then, see if there multiple key customers who are threatening to leave unless a particular feature is added. Because it will cost you a lot to acquire another similar large customer, it’s probably worth considering building that feature, especially if a competitor has it available so there are obvious alters available.
Before we conclude this week, it’s important to share some more BAD reasons to prioritize something:
An individual customer has been waiting a long time for something
It’s already on the roadmap, AKA you’re in the Build Trap
We said we’d do this last year and didn’t (there’s that Build Trap again)
The bottom line is that whatever is selected should fit within the product strategy. What that means is that in reality, as a product leader, you deploy a strategic framework so that your team can perform the steps above and evaluate options. Then, hopefully when they present their selections to you (and the data that backs them up) it will be easy for you to support their choices for the path forward.
Next up is working with the development team to estimate the effort involved in each initiative and fitting the puzzle pieces onto a roadmap. Stay tuned! If you missed some of the earlier pieces, click on the links below to catch up.
Week 1: Planning Starts with Setting a Vision