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Prioritization

Updated: Oct 31, 2023

Gartner has found prioritization to be the top mega issue affecting businesses.


This document will examine various strategies employed to categorize and rank the desires of stakeholders, users, and customers.


These strategies are used during product discovery or backlog execution. The bottom line of prioritization revolves around answering the pivotal question: “What should I build first?”


All other answers depend on how you answer the question.


Regardless of the method employed, the crucial aspect is to ensure its consistent application, particularly in a scaled scenario.

Categorization Techniques


Sources Of Business Value


This technique is based on deciding whether completing an item will fall in one of the following “buckets:”


Market Value

  • Sell more units?

  • Charge a higher price?

  • Reduce the cost of supplying products and/or service?


Capability Building

  • Enable our team to do something we previously could not?

  • Reduce or reduce the need for a low value activity?


Risk Reduction

  • Develop or refine hypothesis about the market?

  • Prove technical assumptions?


Note that you may have items that will appear in multiple categories. That shows higher value.


MoSCoW


MoSCoW is considered by some as a prioritization method. MoSCoW is NOT A PRIORITIZATION METHOD!


MoSCoW is a categorization technique based on placing items in four “buckets:”

  • Must

  • Should

  • Could

  • Will not


However, even when there is a clear definition for each category, most items end up in the MUST category.


Personally, I do not recommend it.


Value/Effort Quadrant



Another technique is to use a decision quadrant such as the one above. It easily replaces MoSCoW with a much clearer criterion. In order:

  • High Value, Low Effort

  • High Value, High Effort

  • Low Value, Low Effort

  • Low Value, High Effort


We should avoid Low Value, High Effort items, either by delaying or preferably, removing them. Exception for regulatory items.


Valuation Matrix


Especially useful for either product discovery and/or backlog execution.


Consists of 6 categories:


COMMERCIAL Profit Improvement New features, services, or content that customers will buy, process or infrastructure cost reduction measures, redesigns that enhance market value.


MARKET GROWTH Customer Awareness and Acquisition Features for new customer segments, new platforms, or competitive differentiation.


ORGANIZATIONAL EFFICIENCY Time or money savings Task and process automation and improvement, internal usability improvements, enhanced flow of value, quicker release cycle, team happiness or productivity enhancements.


CUSTOMER ENGAGEMENT Retention and Usage Usability improvements, new features for existing customer base, Service enhancements.


FUTURE VALUE Investing in learning and innovation Technical debt reduction, new tools or frameworks, training, customer learning.


OTHER Not inherently or believably valuable Internal tasks that are simply means to an eventual outcome, features based on unproven assumptions, or things you should avoid if possible.


Note that you may have items that will appear in multiple categories. That shows higher value.

Personally, I used this valuation matrix for years in d domains with a high rate of success.



Ordering (Prioritization) Techniques


Many use word ordering and prioritization interchangeably. I prefer to use ordering to emphasize that you cannot have multiple number 1 priorities.


Bubble Sort


The simples ordering technique:

  • Take the first two items – which is more important?

  • Take second and third – which is more important?

  • Keep doing it until the sorting is complete.


Low Priority First

  • Assume project does not complete one item – which item do you give up?

  • Assume another is not complete – which item do you give up?

  • Keep doing this and back into a forced ranking.


Prioritization Poker


Use a Planning Poker deck or app.


  • People vote for each item using a Planning Poker card deck.

  • The bigger the number of points, the higher the value for that item.


WSJF


WSJF is a tool to prioritize significant items of work. The idea of WSJF is to reduce the cost of delay.


To calculate the WSJF, two key metrics are necessary:


  • cost of delay – the economic value we are missing by not doing it.

  • duration – elapsed time from the start of the job to delivery.


In general, even without WSJF, most prioritization would go as follows:

  • The first items to be worked on are the ones with an inflated cost of delay and a short duration.

  • The last items to be worked on have a low cost of delay and a long duration.


The real choice is between low cost of delay and low duration items, and excessive cost of delay and high duration items.



To calculate the WSJF ratio, divide the estimated cost of delay by the estimated duration.


In Agile, rather than calculating expected value in financial terms and duration in elapsed days, we use relative estimating for both cost of delay and duration.


To avoid prolonged discussions about minor differences, the options are limited to the modified Fibonacci series, 1, 2, 3, 5, 8, 13 and 20.


Supply values for:

  • Business Value

  • Time Criticality

  • Risk Reduction

  • Duration


Add value, criticality and risk reduction and divide by duration to get the WSJF index. Higher numbers show a higher priority.


Prioritization Matrix


You can build a prioritization matrix to decide a priority index. The format varies depending on your organization and uses. As an example:


Conclusion


When it comes to ordering items, it is often needed to use multiple techniques. It is common to first use classification techniques and then apply ordering (prioritization) techniques to each classification “bucket”.

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