Prioritisation is a necessary evil of every product development lifecycle. Deciding what to build, where to focus limited resources and what customer segments to target are questions that face every organisation on a daily basis. With this being the case, why do companies prioritise so badly?
Prioritisation is one of the most critical aspects of product development. Anyone involved in product (from junior product owner through to chief product officer) needs to be a guardian of “doing the right thing”. Unfortunately this isn’t always the case – we’ve all come across poor decision-making in organisations.
I’ve been around long enough to have seen everything from the sublime to the ridiculous when it comes to prioritisation. So here’s my take on why poor prioritisation occurs, as well as a lean solution that will ensure you continually deliver the most value to your customers.
Effective prioritisation can be the difference between the success or failure of a product. It’s a constant balancing act between delivering value and the limited resources available.
Unfortunately, there are many factors that can prevent product managers from “doing the right thing”:
There are a number of individuals within a business that can have a negative impact on the prioritisation process. See if you recognise any of the below:
- The HiPPO (highest paid person’s opinion) – someone who influences decision-making based on their seniority within the business
- The Antagonist – someone who is actively opposed, or is hostile to any ideas other than their own
- The Dictator – a ruthless individual who enforces their ideas with an iron fist
- The Procrastinator – an individual who dithers and struggles to make a decisioN
Business Management Tools
Many traditional business tools aren’t fit for purpose. They can be expensive, overly complex and lead to rigid, single-dimensional decision-making.
- The Business Case – Page upon page of jargon and unintelligible data designed to bamboozle the reader into agreeing to build the feature or product. The reader loses the will to live before reaching the end of the document.
- Financial Modelling Tools – There are a host of modelling tools available to help predict revenue figures and/or potential growth. Building abstract representations of the real world behaviour is expensive, incredibly complex and very prone to error.
- Balanced Scorecard – A mixture of financial and non-financial measures that have targets set against them. Widely misused and can focus efforts on the wrong KPIs rather than generating true customer value.
- Microsoft Excel – whilst Excel has its uses, managing a backlog with it isn’t one of them!
We’ve all been there – a huge backlog where everything is a priority.
- Too many items on the backlog resulting in the inability to see the wood for the trees
- Not knowing where to start opens the door for the aforementioned decision makers to start meddling – usually resulting in poor decisions
However, it doesn’t have to be this way. The following concept will help you to overcome the hurdles listed above and hopefully set you on the right footing to make the right decisions.
The 2×2 matrix is a tool primarily used in Lean Startup to help entrepreneurs make decisions, identify what’s important or risky and where to focus efforts. It can be used to great effect for product development prioritisation too.
The product backlog, if not carefully maintained, can become a dumping ground for hundreds (if not thousands) of product features and enhancements that may or may not add any true value for customers. Prioritisation paralysis regularly occurs as it becomes progressively harder to identify “killer” features, as they simply get overlooked by the “noise” generated by the scale of a backlog.
With a few minor tweaks, the 2×2 matrix can be used to sort the wheat from the chaff. It’s so simple to use and enables you quickly to determine the relative value created vs the effort required to deliver the feature.
Two by Two, Step by Step
Draw a large “+” sign on any spare wall space you can find. Mark “Value” and “Effort” along the vertical and horizontal axes respectively.
Value: the value generated for your customers
Effort: the effort required to deliver
Write up each of your backlog items onto Stattys (try them – they’re awesome) Alternatively, those old faithfuls, Post-It notes, work just fine. Quickly and objectively start plotting them on your 2×2 matrix.
When considering the relative value of each story there are a number of things to consider:
- Reach – How many customers does the feature impact? A feature that’s invaluable to small subset of customers is likely to have a lower relative value than a smaller feature that impacts your entire customer base
- Customers – Customers may not always be those paying for or using your product. A customer could be a colleague or business unit within your own organisation
- Revenue – Will the feature drive revenue? If so, how much?
- Acquisition – Will the feature help drive new customers?
- Efficiency – Does the feature help drive efficiency in customers’ lives – be that internal customers (colleagues), or external (paying) customers?
- Brand – Does the feature enhance your brand awareness?
- Work as a team – the framework is a great tool for collaboration. Having a diverse range of perspectives of value will improve the placement of features in the matrix
- Work quickly – this doesn’t need to be a work of art
- Remove emotion – take each card in the abstract and compare against other cards
- Try to avoid putting everything above the line (but not essential – see below)
Balancing the 2×2
Once you’ve mapped out your backlog on the 2×2 it’s time to balance the books. In an ideal world, you’ll have a 2×2 with an equal distribution of cards across each quadrant. However, in reality it’s common to end up with more cards above the line as everything is deemed high value. One of the benefits of the 2×2 is its simplicity and balancing the matrix is easy too (if somewhat crude.) In order to balance the matrix, literally redraw the X and/or Y-axis so there are roughly the same amount of cards in each quadrant. All features should be ranked against each other so it doesn’t really matter where the axis lies.
With a balanced 2×2 you should now have a clear idea of where to focus your efforts in order to get the best possible return for investment.
The 2×2 has four distinct quadrants:
Top Left – The “why aren’t you doing this now?” quadrant
Features in this quadrant offer the best value for customers with minimal effort. These are the low-hanging fruit that should be worked on immediately
Top Right – The “Breakdown” quadrant
Features here offer high value but require significant effort to get in front of your customers. Try to breakdown these features into smaller, bite-sized features and re-map them against other features in the 2×2.
Bottom Left – The “Friday afternoon” quadrant
Features offer lower value for customers but are easy to implement. These are great fillers which can be slotted in as and when there are small amounts of downtime, or between larger features. It’s also a great way to ensure continued momentum.
Bottom Right – The “Don’t even think about it (yet)” quadrant
Whilst still offering some value to the customer these shouldn’t be prioritised at this point in time. These items are likely to require significant effort to deliver and offer lower value to the customer than other items in your backlog.
Revisit the 2×2 regularly
As your product develops over time revisit the 2×2 matrix regularly. You’ll hopefully be continuously learning about your product and customers through A/B tests, analytics, customer insight, customer feedback and so on. Re-balance your matrix when necessary – items deemed to be low value two months ago may now be higher value relatively compared to other features on the backlog.
Businesses today need to learn from the lean startup model in order to stay competitive. Just this week we’ve been working with a retailer to use this to prioritise work they want to get done for peak period this year.
The 2×2 matrix is a quick and simple tool that will transform the way you prioritise your product backlog. It helps you to focus on features/enhancements that add the most value to your customers compared to the effort required to deliver them. Working best in a collaborative environment, it helps galvanise stakeholder buy-in and gives the ability to easily communicate (and in some cases defend) the decisions you make.
BY ANDY WICKS ON JULY 17, 2017