Prioritizing Opportunities: The Key to Driving Business Value
As a product manager, you’re responsible for owning the product roadmap, strategy, team priorities, and even the failures of your team. To succeed, you must have a deep understanding of the problem space and the customer you’re serving. As you learn about problems and customers, you’ll uncover multiple opportunities to improve the customer experience and business performance. However, it can be challenging to keep everything organized and ensure your team is focused on the right opportunities.
The Dangers of Distraction
With so many opportunities vying for attention, it’s easy to get sidetracked by trendy ideas that may not truly benefit your product, problem, or customer. That’s why setting priorities is crucial. Without a method for managing requests and communicating the plan, you risk becoming a feature factory, building features or chasing ideas that may not solve the problem or benefit your customer.
The Power of Business Value
To avoid this pitfall, focus on the value of each opportunity, specifically its business value. Business value is the impact the opportunity will have on the business or company itself. As a product team, you want to ensure you’re delivering on customer experience while driving the business forward. Opportunities can be direct value drivers, such as money and people, or indirect value drivers like time and process.
Types of Business Value
Value doesn’t always mean dollars. There are four main types of value: money, people, time, and process. Let’s explore each type and the questions you need to ask when considering each:
- Money: Will this opportunity generate revenue or lead to cost savings? Is investment required, and what’s the trade-off?
- People: Does this opportunity drive efficiency, allowing you to do more with the same or fewer employees?
- Time: Will this opportunity save employee time or customer time? What’s the cost of saving time, and how will it impact your product team?
- Process: Will this opportunity eliminate an existing process flow, saving time, people, or physical space?
Using Business Value to Set Priorities
Once you’ve sized and understood the business value of each opportunity, you can prioritize effectively. Translate all improvements into dollars to demonstrate the return on investment. Work with your team, stakeholders, and leadership to understand the size of each opportunity.
Example: Making Decisions with Business Value
Let’s say you have several opportunities with varying levels of business value. You may think it’s obvious to prioritize the opportunities with the highest dollar amount, but you’d be missing a crucial component: level of effort (LOE). LOE is the amount of work required to deliver on each opportunity. Chart the value of each opportunity against its LOE to compare and prioritize effectively.
Sharing Results and Getting Feedback
With your priorities set, share your recommendations with stakeholders and teams. Get feedback on your recommendation, and use this input to refine your approach.
Conclusion
By focusing on business value, you can confidently prioritize opportunities that solve customer problems while driving business growth. This exercise ensures you’re building the right opportunities, and your team is aligned on what needs to be done.