A while ago, I was interviewing a VP of Product candidate for a client. They were on the case study portion of the interview, where they had to prioritize major initiatives for the company. We explained that the objective wasn’t to get the prioritization completely right, and it was more for us to understand their thought process. They had access to any people or any data they needed from the company.
The candidate first went to the CEO and talked to him about the short term and long term goals of the company, which ended up being something like this:
- Grow revenue
- Reduce costs for operation
- Expand upmarket
Then they spent a week interviewing various stakeholders in the company from sales to marketing to the current product managers and developers. They asked these stakeholders to each rank the importance of each feature on a scale from 1–5 in each category, and took the average of their scores. At the end of this, the candidate put together something that looked like the following:
When I saw this, I immediately told the CEO, “this is not your VP of Product.”
“Why?” he asked. “They helped us get some order into a very messy situation. We really need the help.”
I’m going to explain to you what I explained to him.
When you need to hire an executive Product Manager, a CPO or a VP of Product, you are at a moment in your company where you have a ton of choices. If you’re a scale up, you can go upmarket with a new product, you can build that new feature in your existing product, you can roll down a feature that’s not being used. If you’re enterprise, you typically have a large portfolio of products that all need work done to them, but it has to be balanced with your budget.
Providing structure around that mess is not enough. You need to have a framework to know if they are the right choices for your business. You need this person to not just prioritize, but make a product strategy.
A senior Product person’s job is to help you create and deploy that strategy in a way where every team member can easily make a prioritization decision on a day to day basis. Instead of this candidate telling us how they were going to create that strategy and framework — using hard data from the market, customers, and financials — they took the accountability away from themselves and put it back on the rest of the organization. They asked them to prioritize the work. All they did was put it into a pretty table, with some arbitrary numbers. While this method looks simple and clean, they did not actually prioritize. They guessed. They asked the company to come to a consensus on what to do. They did not lead.
Our CEO needed a leader, not a consensus builder. He waited, and got one.
There are a lot of gimmicks out there on how to prioritize. If you do a quick Google search, you’ll immediately find a few of the methods we were all brought up on as newly minted Product Managers:
- Ranking the features from 1–10
- Giving your stakeholders $100 fake dollars and having them place them on what they want
- Weighted Scoring (what our candidate did above, with arbitrary scores, not data to back it up)
But that’s just the thing — these are techniques I would expect a new Product Manager to use. And only when leadership has not set a strategy for them. In fact, I teach some of these concepts to new Product Managers to start strategically thinking about how to prioritize if they never had to before. But, these methods are not the end game.
A mature product organization and senior product people should not be using these techniques listed above forever. They don’t give you real business insights. Only a product strategy will give you that. Product leaders and leadership in general should be setting the strategy that lets teams get rid of these methods and start using real data. When leaders continue to use these methods instead of setting strategy, that tells me they are shifting the accountability of prioritization from themselves onto others. That is not leadership.
Good prioritization is based on cold, hard facts. When you have data and you have a clear strategy, prioritization becomes easy.
For example, if your strategic intent at your company is to move upmarket and increase new sales by $5MM in the next year, you want to look at each of your products or features and ask “Which ones are specific to our upmarket customers? How much more will this feature help us close new sales compared to the other?”
How do you get that data? By finding out which features or problems are preventing you from closing sales, calculating out how much the potential contracts were that you missed, and how many other customers are like those out there. And yes, this means you’ll have to (gasp!) talk to the sales team to figure this out.
This is why Cost of Delay is a great prioritization technique. It involves backing out all decisions into hard dollar amounts. Even weighted scoring, that I mentioned above, can be evolved if you back-up the percentages and scores by data and dollars.
In the absence of a product strategy, the most critical job function of a Product Leader is to set one. If you want your teams to prioritize, you need to provide the framework. And not just some arbitrary framework where you estimate a bunch of numbers, wag your finger in the air, and say “feels like a 3, Bob”. Your people need a real strategy, based on data, and aligned to a company’s goals.
So as you go into 2020 planning, ask yourself, do I have a strategy that enables my teams to prioritize? Do I have the infrastructure for them to pull data to support their prioritization?
If the answer is no, get started now. Make this your biggest priority. Take the time to step back from the day-to-day craziness, consider your company’s current state, and where you want to go. Get help from the team to pull data to understand how to set good goals. Then, formulate a strategy that enables your people to make well-prioritized product decisions.