Best Practice Guide for Product Prioritization
Product prioritization is an essential process for any organization that aims to deliver valuable and impactful products to its customers. The process involves evaluating and ranking features, initiatives, and projects based on their potential value, impact, and effort required. This guide will provide a detailed understanding of best practices for product prioritization, focusing on specific techniques like RICE and WSJF, organizational culture, and agile investment models. We will also draw insights from industry experts.
Ingredients of Successful Product Prioritization:
At XOOTS, we believe there are 10 ingredients in the secret sauce of excelling at product prioritization:
Ingredient 1 – Align with Business Goals and Objectives: Ensure that product prioritization aligns with the organization’s overall business goals and the desired outcomes. This helps to keep the focus on initiatives that drive the most value and impact for the organization.
Ingredient 2 – Utilize a Prioritization Framework: Adopt a prioritization framework, like RICE or WSJF, to objectively evaluate and rank initiatives based on their potential value, impact, and effort. This ensures that the product development process is data-driven and transparent. One of the key considerations is value based on the desired outcomes. Value for each outcomes is essential, but tough to define. It’s important to remember that not every value is commercial, and sometimes the value comes from engaged customers, e.g., images or curated products. Value has to be linked to the business strategy, the desired outcomes and ensuring product strategy is aligned to it.
- RICE Score Calculation:
- Reach: How many people will this impact? (Estimate within a defined time period.)
- Impact: How much will this impact each person? (Massive = 3x, High = 2x, Medium = 1x, Low = 0.5x, Minimal = 0.25x.)
- Confidence: How confident are you in your estimates? (High = 100%, Medium = 80%, Low = 50%.)
- Divided by Effort: How many “person-months” will this take? (Use whole numbers and a minimum of half a month – don’t get into the weeds of estimation.)
- WSJF Calculation:
- Weighted Shortest Job First is a simple formula: Cost of Delay divided by Job Duration (or Size).
Ingredient 3 – Consider customer needs and feedback: Incorporate customer feedback and insights into the prioritization process. It is important to be passionate about your customer: starting with your customer and work backwards. To do this you need to “Know your customer” based on personas. This does not mean, the product owner or manager does not pay attention to competitors, but they should be passionate about the customers. This ensures that the product roadmap reflects customer needs and expectations, leading to higher customer satisfaction and retention.
Ingredient 4 – ‘know your product’: Product professionals must understand their product holistically, including its health (e.g., technical debt, necessary component upgrades, scalability). If they only focus on features and not on performance or scalability, the product features may not be implemented or may take much longer to navigate through technical debt.
Ingredient 5 – consider the customer journey holistically: To earn and keep customer trust, consider the entire customer journey, the round trip, and feedback loop, from customer needs to the total experience (e.g., web, mobile, chatbot, etc.), not just isolated components. The customer journey includes:
- Attracting the customer – understanding the marketing funnel is key
- Engaging with the customer – offering valuable content and search capabilities
- Delivering on the customer promise – from checkout to delivery
- Retaining the customer – providing customer care and after-sales support.
Ingredient 6 – Foster Cross-functional Collaboration: Encourage cross-functional collaboration between teams, such as product, engineering, design, and marketing. This helps to ensure that all perspectives are considered during the prioritization process and that the final product meets the diverse needs of stakeholders.
Ingredient 7 – Balance ‘What, Why, How, and When’: It’s essential to understand the intersection of ‘what and why’ with ‘when and how.’ Product teams focus on what and why, sequencing and prioritizing based on constraints such as value, team capacity, team skills, or dependencies. Implementing feedback loops, which can take many forms, such as direct feedback from key customer groups or A/B testing, is crucial. Utilize tools like real-time monitoring to understand dropouts.
Ingredient 8 – Embrace an Agile Investment Model: Adopt an agile investment model to allocate resources and funding to product initiatives. This allows for greater flexibility and adaptability in the product development process, enabling teams to pivot quickly based on changing priorities or market conditions.
Ingredient 9 – Cultivate a Continuous Improvement Mindset: Foster a culture of continuous improvement and learning, regularly reviewing and updating the prioritization process based on feedback and lessons learned. This ensures that the process remains efficient, effective, and relevant to the organization’s evolving needs.
Ingredient 10 – Communicate and Visualize Priorities: Effectively communicate and visualize product priorities to stakeholders, using tools like Aha or Product Board. This helps to maintain transparency and alignment across the organization, ensuring that everyone is on the same page regarding product direction and priorities.
By implementing these best practices for product prioritization, organizations can make informed decisions about where to invest resources and effort, resulting in a more impactful and successful product portfolio. Remember to adapt these practices to your organization’s specific needs and context, and continually iterate and improve your prioritization process to drive even greater value and impact.