Refocus Your Prioritization Matrix Towards Time to ROI
Lately, I've been reflecting on how we can shift the conversation about what to prioritize toward the most impactful initiatives for the company (and the users). This reflection led me to revisit one of the classic tools of product development: the impact/effort prioritization matrix.
I've sat through many meetings where the evergreen impact/effort matrix is used as a tool to help with prioritization. I've seen it applied in various ways: either to create a common understanding of how different initiatives relate to each other or to make the case for some initiatives that should be accelerated as they are "low-hanging fruit". Sometimes, it's even used to try to create a balanced bet portfolio by mixing longer-term and shorter-term bets.
There’s something easily graspable that everyone understands in a 4x4 quadrant, and the ease of use is not something that should be underestimated. Yet, I am not sure that the two axes we have been using are the best ones to steer a conversation about priorities.
The Shortcomings of the Impact/Effort Matrix
While analyzing the impact/effort matrix, there are some shortcomings that I think are worth mentioning:
The definition of impact: What "impact" means in the matrix is often just a conversation starter. The matrix doesn’t work unless we have a definition of impact. In my experience, this is often connected to the initiatives we are evaluating and not to the bigger picture. For example, if one goal we have is to increase sessions/users, the impact is defined by that. This works on a team/goal level, but another team with a different goal will not be able to relate to the same matrix.
Comparing different impacts: If by design we do not have a common definition of impact, how can we compare and contrast between different matrix? Are all impacts equal, or are some more important than others?
No explicit reference to time: Despite effort being one possible way of measuring time to market, it is not directly correlated to it. Time is somewhat hidden in the impact/effort matrix.
In a market situation where money is not cheap anymore, the tech is moving at lightning speed and time-to-market is imperative, the risk that we undervalue an important component like time becomes quite high.
If we look a bit closer at the impact/effort matrix and add the lens of time-to-market, we can quickly see that there is a big risk that the initiatives we focus on are the ones on the lower side of the quadrant. These are the ones with less effort - and consequently less time in comparison.
This leads to two types of development:
Incremental: Not a needle mover, but delivers some value that is brought quickly to market.
Low-hanging fruit: A bet that we believe has the potential to have a bigger impact, yet doesn’t require so much effort.
A New Way of Prioritizing: Shifting Towards Time/ROI
After talking to many product leaders, I have come to realize that time is more and more of the essence. This is why I am making a case to review our famous prioritization matrix and shift instead toward two new axes: time and ROI.
Shifting our focus to time and ROI, we can immediately shift the conversation towards:
Time as an explicit factor: What is important for us as a company? Do we have the possibility of having longer-term investments, or shall we focus on quicker wins?
Focusing on the most valuable problems to solve: What are the best ROI initiatives? No matter the specific goal, what are the most important problems to solve for the company? Talking about general ROI allows for a more overarching perspective that will enable us to compare and contrast initiatives in a much easier way.
Always striving towards moving the needle: It might take longer or shorter term, but refocusing on ROI will make you deliver solutions to the most important problems to solve. And avoid doing small incremental efforts just because they do not require so much time.
I believe the new matrix can help not only in aligning discussion but also in prioritizing and delivering real impact. What is your view on it?
