Value/Effort Matrix: Lean Prioritization for Product Managers
Prioritization is a necessary aspect of product management as it is a crucial part of product development lifecycle. Lean Prioritization is one of the simple approaches that helps product managers to manage the product backlog.
In the ideal product management world, every manager should care of how to become a guru of prioritization and apply different methodologies and professional techniques. Any team member involved in the product should be able to make right decisions and prioritize correctly. However, often we face weak decision-making examples. How to prioritize effectively?
What are the objectives of prioritization process?
Feature prioritization helps determine key priorities, learn how to plan an effective roadmap, identify boundaries of work and differentiate between wants and needs.
Effective prioritization is a process of balancing between delivering value and the limited resources available. What can cause bad prioritization?
Many factors can disturb product managers to do their job great. We define the main:
- Wrong people in the team or in the leadership (decision makers). They can provide a negative impact on the prioritization processes. It can be someone who influences decision-making based on his/her seniority in the business, someone who enforces wrong ideas, someone who is actively opposed or who struggles to make a wrong decision.
- Inappropriate tools and methodologies (that are not fit for purpose).
Actually, you can cope with the wrong people somehow but choosing the appropriate tools and methods require your special attention and advanced product management skills.
Feature prioritization in product management is a serious process that requires careful approach and special PM’s attention. Therefore, experienced product managers are able to apply different complex and thorough approaches and techniques to identify priorities and work with them. Here are just some of them:
- Kano Methodology – the method of determining customer satisfaction with product features. This theory makes it possible to clearly describe the satisfaction of what needs leaves consumers indifferent, dissatisfied, or makes them happy.
- MoSCoW prioritization technique – the popular method widely used in project management, business analysis, and software development. It is based on the principle according the consonant letters in the acronym that define priority categories: must, should, could and would.
- KJ methodology – the group process for setting priorities that quickly helps to come to objective group agreement from the series of subjective data.
However, all these methodologies are good for strategy planning. If you need to apply a quick approach and a daily basis prioritization method, then Lean Prioritization would be a great solution.
Lean Prioritization: the power of Value and Effort matrix
Lean Prioritization approach is represented with the 2×2 product prioritization matrix that is helpful in decision making and identifying what is important or risky and where to direct the efforts. Lean Startup entrepreneurs also actively use this matrix for product development prioritization. Sometimes you can come across this concept associated with another popular term – MVP (Minimum Viable Product).
Why is the matrix used for prioritization? It can help product managers to sort out all the items and put things in order.
Right, if you do not carefully maintain the product backlog, it can quickly become a dump for dozens, hundreds and even thousands of features and bugs.
The disregard of prioritization occurs as it becomes harder to define inappropriate features, as they simply were overlooked.
You can easily draw a large “plus” sign on a whiteboard and mark “Value” and “Effort” along the vertical and horizontal axes or use a special tool that provides some product management platforms.
You can set up Value and Efforts parameter for each idea. Comparing these combinations will help you prioritize the tasks better and choose the most important tasks for development.
- Value assessment will show which business value the feature can bring to your product or your business.
- Efforts measure the resources needed to complete the task.
Pay attention to a number of things while considering the relative value of each story:
- Acquisition (will the feature help to gain new customers?)
- Activation (when will customers understand the value of the feature?)
- Reach (how many customers do the feature impact?)
- Revenue (how does the feature help to make money?)
- Retention (how can the feature return customers to make them activated?)
- Virality (how does the feature influence on the product virality?)
In all-in-one product management platform Hygger.io it is visualized with the help of the Backlog Priority Chart.
The chart helps to optimize product priorities by defining important and less important tasks. Here you will find 4 segments, each of them representing a priority block:
- Top left is Big Bets. Tasks that can bring a lot of value but are as well hard to implement.
- Top Right is Quick Wins. These tasks are valuable and quite easy to implement.
- Bottom left is Time Sinks. Let’s say, these tasks are not worth working on at the moment.
- Bottom Right is Maybes. Tasks that do not bring a lot of value but are easy to implement. They can be fulfilled later.
Revisit the matrix
More likely your product will be developed over time, so it’s better to revisit the 2×2 matrix regularly.
You’ll evidently learn more about your product and customers with the help of analytics, feedback, A/B tests, customer insights, etc. Perhaps you will need to optimize the matrix because the items seemed to be low value a month ago may then be of higher value.
As a conclusion
Lean prioritization approach is really helpful for companies nowadays as all of them intend to stay competitive.
The matrix is a simple and clear tool for prioritizing your product backlog. Lean Prioritization helps to focus on features that are most valuable to your customers compared to the efforts required to deliver them.
What do you think about this approach?