How to Do Right Prioritization
You are sitting at your table and considering which work should be done first.
- Sales team is pushing for the new cool features that are already done by competitors…
- Management is looking forward for a new product line in a totally different area to expand…
- Client Relation director is asking to improve current product otherwise retaining biggest clients will be impossible…
- Your super innovative and disruptive product ideas on your way to become Steve Jobs…
- Development team pushes for refactoring, QA looks for bugs waiting to be fixed, …
But seriously, what’s the optimal way of doing this job? You have limited resources and weeks to do all these jobs. How to satisfy all of your stakeholders? Are you sure that these jobs are widely accepted and really meaningful for your business?
After working with so many stakeholders in different business areas and companies, I have developed and evolved a solution named: Stakeholder Roundtable!
It’s a mixture of different methodologies, and it’s pretty easy to adapt almost any kind of business model. Long story short, whole model depends on collecting ideas from everyone, evaluating each one of them, valuation of evaluated items and roundtable discussion with all major stakeholders.
Collect new ideas to your backlog
Don't expect JUST yourself as product manager, management or key stakeholders to fill your backlog. The reason is you never know where the great idea comes from. My recommendation is collecting ideas for products to be open and transparent. Everybody in your company should be able to write down their ideas, needs, gains or pains. You will be so surprised and be happy at the end of this process.
Depending on which suite or platform you use at work, I recommend to keep this idea collection document or page always available and transparent. If you are using G-Suite or Atlasssian, you should stick and go with Google Spreadsheets or Confluence pages. Ideas should not be limited for a given time interval. And product team needs to keep this up-to-date with a single information telling what’s situation of that idea. Like under consideration, candidate for next quarter, on-hold, in progress, etc…
Always have a ready to discuss backlog
A real product company and team must have a ready to discuss backlog. Otherwise you should question whether you have product strategy or not. This (non-technical) backlog must be filled and kept fresh with respect to:
- understanding of your current products with all aspects (risks, opportunities, needs, …)
- listening your users (customers), stakeholders
- keeping an eye on market
And never wait someone else to fill your own backlog on behalf of you.
Define your major stakeholders for roadmap
Being manager (owner) of a product does not mean that you are the only decision maker or mini CEO of your product. Always keep your key stakeholders in the decision making process. Yes you are the owner, and the person who makes the final decision. But respect your stakeholders since they (most probably) know equally or more about market, clients, opportunities as you do.
But tricky part here is defining who your stakeholders are. Choosing stakeholders in B2B business is quite easier than B2C for sure. Since you have critical points in your organization who are responsible for sales, account management, business development. At the end of the day, you know which teams are responsible or have important role on your company and products success. Listen them and learn.
My main suggestion here is consulting top management while defining the stakeholders to work on the roadmap and prioritization. In ideal world, your top management knows and ensure company’s vision and overall strategy. For example, if your company depends on aggressive sales to growth or marketing to expand user base, your main stakeholders must be from these departments. But always and always, choose one stakeholder from each department (team) to prevent communication issues. In other words, there must be a representative and decision maker from them. They can work together to bring you an output but you must have only one output from their representative (like spokesperson).
Valuation with Stakeholders
Ok now you have your stakeholders to talk on your roadmap. At this step, it's important for your stakeholders:
- to understand how important their role are
- to understand each item in the list
- to do valuation properly (Valuation method is also described, wait for it)
Regularly it depends on the way you work and company culture, but my way is sitting together with each stakeholder and describe how roadmap candidates look like. Even though your stakeholder had this method (process) already several times with you, you should describe it again and again.
In this 1–1 meeting, I recommend product managers to cover all items (hopefully) not so much and tell very briefly about them. And observe the initial reaction of the stakeholder for the items and your briefs.
However, you don't need to sit together with your stakeholder and don't rush her or him to finish it in a meeting. Just align on a deadline and ask your stakeholder to finish it on time. Meanwhile you should always be open and available to all questions during this step.
Before these meetings, it's so critical for you and other PM colleagues to test your method. How you will do the meetings, valuation process and what kind of common language you should use for each stakeholder.
Next headline is all about the valuation. You will find out how to evaluate an item and calculate priority coefficient for each one of them.
Usage and Modification of WSJF
Your biggest ally (and also enemy) to find out what's real and urgent need to be done in good timing is numbers. Any reasonable person cannot argue on the facts provided by numbers and widely accepted calculations.
So that's why, my favorite prioritization modeling is WSJF aka Weighted Shortest Job First.
According to Scaled Agile's definition of WSJF,
Weighted Shortest Job First (WSJF) is a prioritization model used to sequence jobs (ex., Features, Capabilities, and Epics) to produce maximum economic benefit. In SAFe, WSJF is estimated as the Cost of Delay (CoD) divided by job size. Copyright © Scaled Agile, Inc.
WSJF basically depends on two main data:
- VALUE- How valuable is this item for you?
- COST - How much energy do we need to consume for this item?
And as you divide VALUE by COST, you have the priority coefficient.
WSJF = VALUE / COST
But is single value enough to determine whether this item really important for you or not? As defined in WSJF, value consists of three components to define situation, opportunity and timing better. These components are:
- User (Business) Value: How important or critical is this item for your users (business)?
- Time Criticality: How urgent do you need this item for your users (business)?
- Risk Reduction or Opportunity Enablement: How important is this item for you to eliminate a risk ahead you or create an opportunity in the business?
VALUE = UV + TC + RROE
So the final formulation should be:
WSJF = ( UV + TC + RROE ) / COST
In order to have proper and comparable results, I recommend to use only a scale for each valuation. I prefer what WSJF offers: 1, 2, 3, 5, 8, 13, 21. As valuation increases in the scale, importance of the item is becoming more and more important. Tricky part in valuation starts with COST aka job effort. I never achieved giving effort estimations in that scale. But it's not a problem. I recommend to use any effort valuation you'd like to use (you may use fibonacci series 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233) . At the end of the day, you will have your proper WSJF coefficient. (ps: after getting cost estimation for all items, you may normalize all of them to have a cost valuation scale.)
Here's an example spreadsheet for you to work or duplicate. Please pay attention that all values are randomly generated and probably there are many conflicts between values.
Once you have WSJF coefficient for each item, sort WSJF column from descending to ascending order. Ta-da! You have a (almost) prioritized list for all items. The reason I say almost is every prioritized list must be reviewed by stakeholders and you may need to create exceptions with respect to:
- Lack of resource
- High business strategy
In case you are doing valuation with more than one stakeholders, formulation should be average of sum of the valuation for each stakeholders' value:
VALUE = ( VALUE 1 + VALUE 2 + … VALUE X ) / X
Need to modify model for stakeholders or markets?
But hold on, are you saying not all of the stakeholders we have should have equal importance? Or you are running business in different regions, and some of the items are specific for some regions?
Ok, let's modify the model a bit.
First, it's quite easy to identify stakeholder importance. We are speaking not complete democracy model in here. For example, you are inviting Sales, Client Relations and Marketing departments' heads as stakeholder. Sales and Client Relations are so critical as your business grows and keeps stable thanks to them. And probably their knowledge on business and client needs are better than other departments. In this case we basically define some coefficients for each stakeholder with respect to their importance and their valuation. My suggestion is sum of coefficients should be 1.
As it's done without coefficient, now it's time to multiply each value of a stakeholder with her/his coefficient:
VALUE = ( V1 * C1 + V2 * C2 + … + V3 * C3) / X
And new table with stakeholders and their coefficients should look like this:
When it comes to the importance of regions, I may recommend two ways of doing it:
- Choosing either one region (city, country, …) or All. For example, item #1 serves for ALL regions meanwhile item#2 stands for only Africa region. (See WSJF with Stakeholders and Regions 1 spreadsheet)
- Choose region valuation for each item. Set them as 1 as default, then you may change it with respect to regions' importance ((See WSJF with Stakeholders and Regions 2spreadsheet)
It's quite important to define your market situation and opportunities. You don't want to invest in a market where you don't see a growth potential anymore, or you cannot risk a market where is the most crucial region for you. If you are working in different regions which may have separate dynamics, it's good to set expectations of each region for each item.
And don't forget to multiply region coefficient with average value to get final valuation!
As you can easily see, it's a quite flexible model that allows to you adapt to your needs and requirements.
Re-Valuation with Stakeholders
After getting first valuation from stakeholders, review the values. You may need to eliminate several items since none of them are considered or describe better in case any one of them is confusing.
Now it's time to share valuations all together with every stakeholder. In other words, they will be able to see how other stakeholders value every item and compare their valuation. This is a great opportunity for each stakeholder to see others' perspective.
This step may take either short or long totally depending on your stakeholders. In case stakeholders don't want to change anything, it'll be short. But if re-valuation step confuses your stakeholders and they ask for more time to provide valuation again. Put yourself into their shoes. Probably, they will be confused with others' valuation and they would like to think again.
Be prepared for this step for extra time and a lot of questions!
Now it's time. Let all stakeholders (at least major ones) sit in a meeting and ready to overview prioritized list of items. It's so great transparency since every stakeholder are aware what kind of items there are, how they are valued, why they are important, how much job effort we need spend.
As I described above, each stakeholder will be aware of others opinions and valuation. Get ready for valuation discussion because eager stakeholders will be asking questions to each other to understand why they value a specific item in the list like that.
It's very rare occasion that every stakeholder immediately accepts the prioritized list of items. There should be some discussions to see each others' point. Maybe one of the stakeholders will claim an important item is listem.
This open discussion may sound risky and time consuming, but believe it's not. Basically it reduces the unnecessary pressure on the product manager(s) and distribute the responsibility on each stakeholder who has right to talk for products future. But, you as a Product Manager, be aware that this is your playground, your scene and product. Never and ever lose control of this process, meeting and decisions!
It'll be nice to discuss results with each stakeholder thanks to these meetings. Let's say, Sales stakeholder had a huge impact on every stakeholder and convinced to work on it. If someone is trying to play that big, always ask for the commitment and the output. In other words, what Sales team commit in return of this item we agreed to work on it. This process and expectations will work much better as you start applying for 2–3 plannings.
I hope you like this process. As I say, it's not magic or a mind blowing innovative method. But it's extremely efficient and working one. Please let me know if you have your similar or totally different methods!