Unlocking the Power of Prioritization: Mastering the Art of Problem-Solving
As a product manager, your primary goal is to solve problems that benefit both the business and the user. As you gain experience, you’ll develop a keen sense of identifying potential problems through various means, such as user interviews, analytics, and AB testing. However, the real challenge lies in determining which problems to tackle first and in what order.
The Importance of Order of Magnitude
To make a significant impact on your business and users, you need to understand the potential order of magnitude of each problem. This involves estimating the rough size of a solution’s impact before you start working on it. You can’t know the exact outcome, but you should be able to ballpark whether it will be a large, medium, or small win.
There are several frameworks for order of magnitude estimation, including Tee Shirt Sizing, Fibonacci points, and Basis 100 Estimation. These systems work because our brains are better at understanding relative sizes rather than exact numbers.
Why Order of Magnitude Matters
When building a roadmap, you’re tasked with delivering a certain level of impact against specific goals, often tied to financial plans. You need to allocate your resources effectively to hit these targets. Estimating with order of magnitude helps you prioritize problems and solutions, ensuring you focus on the most critical areas.
Estimating with Order of Magnitude vs. Exact Values
During planning, it’s tempting to build complex quantitative models to predict impact. However, this approach is often slow, inaccurate, and limited by data availability. Estimating with order of magnitude is faster and more accurate, allowing you to stack rank projects by potential impact.
Examples of Order of Magnitude
One common approach is Tee Shirt Sizing, where you categorize projects into small, medium, large, or extra-large based on their potential impact and cost. This process involves:
- Listing potential projects in a spreadsheet with details for your team to understand.
- Creating columns for impact and cost.
- Reviewing goals and estimating impact with your team.
- Repeating the process for cost estimation.
- Sorting the list to prioritize high-impact, low-cost projects.
Common Pitfalls and Solutions
Estimation can go wrong if you:
- Fail to understand your product’s metrics and key drivers.
- Don’t consider the user life cycle.
- Lack common sense in your estimates.
- Are overly optimistic.
To avoid these pitfalls, focus on building a deep understanding of your product’s metrics, use common sense, and be conservative in your estimates.
Tips for Using Order of Magnitude with Stakeholders
When reviewing a feature’s impact, remind stakeholders of the initial estimates to ensure everyone is on the same page. Linking artifacts like OKRs and product specs to the estimation work also helps maintain context.
By mastering the art of order of magnitude estimation, you’ll be able to prioritize problems effectively, focus on high-impact projects, and drive meaningful action in your product development.