Prioritization is one of the key aspects of a product manager role. With so much to do and limited resources, product managers encounter this challange way too often. And there are too many situations when prioritization is done based on one of the following ways.
– Sales Feedback: because sales is generating revenue and bringing in deals, we should listen to them
– Personal Favorites: PM or other team members are passionate about certain features
– Anecdotal Data: such as customer service getting too many calls for issue X, or Marketing team thinks feature Y will help them market
– Management Ask: company CEO happened to be looking at the site and found feature XYZ was missing, or your manager thought that certain feature would be nice to have
We have all seen these situations far too often and have fallen into the trap. So whats the right way to prioritize the projects? There are different ways PMs can evaluate which projects to work on first. Here are the key aspects to keep in mind when prioritizing.
Shared Purpose & Goals
The first and foremost thing to keep in mind is that goals of the product team has to be aligned with broader organization goals. Product prioritization starts with shared vision and purpose. This will ensure that all the projects that are being considered relate back to business objectives. Anything that does not contribute directly or indirectly to business goals can automatically be weeded out.
Once the criteria for prioritization is established, its important that to communicate it clearly to stakeholders and they agree to it. This will avoid any confusion and conflicts regarding the priorities. It will also clearly show everybody why certain projects are not prioritized and data to support the decision.
Each team has their own reasons to invest time and resources to a project. Product team has to work with multiple stakeholders to prioritize projects and must follow an objective and fair way to measure these projects. There are multiple frameworks to prioritize projects. Which framework one uses is not really critical but the fact that team has decided to use a framework is the key. I have used a few different ways to prioritize projects.
One of the popular product prioritization frameworks is RICE framework. Another popular model is ICE framework. I first learned about RICE framework while attending a growth seminar. Since then I have adopted this framework and now I consistently use it in most of my growth experiments and product prioritization.
RICE framework was first introduced by Intercom and uses for dimensions to determine project priority. Here is what each of the 4 dimensions are.
Reach: estimates how many people each project will affect within a given period. This period should be the same for each project that is being evaluated to normalize the impact. For example, number of user signups per month, or number of transactions per month.
Impact: measures what is the actual impact on each user when they encounter the new flow or feature. Impact is usually qualitative feedback as opposed to a hard number and should be measured by how delighted user is when she interacts with the new feature. I usually measure this as Low, Medium or High and assign a score between 1 (Low) and 3 (High).
Confidence: measure how confident you are in your estimate for impact. This lets you control the uncertainty of the impact. I measure confidence as a percentage between 50% and 100%. If you have a high impact and data or user research to back it up, the confidence should be high. If however, you have low impact and high effort, or little to no data to back up your estimates, confidence would be low. Anything below 50% is probably too low and might not be worth doing.
Effort: is a measure of resources needed to deliver the impact. One thing to note here is that one should measure effort from product, design and engineering as well as QA, and not just development effort. Effort can be measured in person-months.
Once you estimate all 4, next step is to calculate RICE score for each project.
RICE SCORE = (Reach X Impact X Confidence)/ Effort
This will give a score that maximizes the total impact per time spent in building the product.
How to Implement RICE
The way I think about prioritizing is to follow a two tier approach. First look at various business areas or themes where product team should focus on. These themes generally should be related to either business objectives or user benefits. For example, one theme could be driving activation for new users. Another theme could be reducing churn. The first step should be to prioritize themes and select top 2-3 themes that have maximum impact.
Then within each theme, implement RICE model for each project and compare to prioritize projects with the highest RICE Score. Pick top 2-3 projects from each theme and focus on those to deliver highest value in each theme.
Have you run into any issues with product prioritization? How do you prioritize your projects? Please leave your thoughts and comments.