What is more important? Launching an improved checkout or iterating on the design of that new product detail page?
As a product manager, prioritization is one of the most demanding and inevitable tasks you face on a daily basis. Every bug we find asks the question „Am I worth altering the current sprint? Am I set for the next one? Or will I just continue to exist until further notice?“
The answer is not always clear-cut. There is no self-evident right or wrong. And even if you might have a preference, stakeholders might disagree, and the last impression you want to leave is that your prioritization is fully arbitrary.
RICE overloaded
Take as an example the OG of prioritization metric – RICE. RICE stands for Reach, Impact, Confidence, Effort.
In a desperate attempt to solidify their decisions, many turn to entire business plans for RICE.
This is how I have seen it fail:
Reach: Usually measured in the number of users this change will impact. The preferred lever of those which have currently the biggest user group and public enemy of every innovation that starts off slow. No app users yet? Your app probably won’t get any support if „reach“ is measured in absolute terms.
Impact: So how much money will this change make us? This is where the business plan goes full-out crazy. Conversion rates and order sizes will be manipulated as the stakeholders see fit.
Confidence: HIPPOS and self-proclaimed experts will raise this metric. Confidence refers to the personal confidence championing this initiative of course.
Effort: Best measured in man-days! Planning fallacy? Never heard of it. Let’s go ahead and estimate this backlog of 24 initiatives and how much time developers, designers, and product managers will require to get this done.
The wrong assumption is, that by increasing sophistication we increase accuracy. But most of the time the opposite is the case. By trying to factor in more variables we are including more variance or estimation errors as well while building a false sense of certainty.
The lean RICE: This is how I have seen it work.
Before you even begin to rank and prioritize, you need to make the strategic decision against what objective initiatives are to be prioritized against. Otherwise you might be comparing initiatives that would impact different metrics, like the acquisition of new users vs. conversion optimization. Your top-line objectives or the status of your company will likely set you guidelines, which metric should be prioritized at the moment.
The second thing to consider is, that in prioritization absolute accuracy is not relevant. The task at hand is to create a prioritized order. It’s not really relevant how much one initiative is more important than the other. You just need to identify which initiatives are more promising than the others. As soon as they take that mindset, a lot of PMs quickly find, that prioritization becomes tricky around only a few initiatives: The top spot and the last one to make the cut.
To make that decision, a simple version of RISE scoring will usually suffice.
Reach: How many users are potentially impacted by this on a scale of 1 – 5.
5 being a „regular“ activity as part of the „happy path“ for example the checkout.
1 is an absolute edge case that just happens for very few users.
Impact: How will this impact the objective? Don’t waste your time making assumptions or complicated calculation. Take a close look at the initiatives on the betting table. And rate them 1 – 5 relative to each other. Similar like you do during agile estimation poker that uses a reference story.
Confidence: Here is a joker and quite often the dirty hack on how you can remain in control of your roadmap when facing tough stakeholders. How confident are you about the impact and the effort? How much evidence is there? How sure are you about the feasibility or other dependencies? This is the way to question pet projects or to decide that more discovery work needs to be done or that you should do a spike first. Confidence is expressed as a percentage. To make negotiations easier, agree on an interval like 25%, 50%, 75%, 90%, 100%.
Effort: While the majority of the agile community agrees that time estimations are worthless, quite a few templates suggest using „man-days“ and other time-bound measures. There is ample evidence that this type of planning usually doesn’t work and estimations tend to be way off. My approach here is the same as for impact. The effort is estimated on a scale of 1 – 5 relative to each other.
Overall there is the possibility of 625 different combinations and „ties“ will be less common than expected. In this shape, RICE is serving us in the following ways:
- It allows us to structure the discussions around prioritization. Why does your Lead engineer think that A requires more effort than B? Why does a stakeholder expect more impact from B compared to C? RICE includes all essential levers to analyze initiatives from different perspectives.
- If you did a proper product discovery, you should be able to do this on the spot.
- We are not presenting a false sense of accuracy which can be weaponized afterward. As we focus on the relative prioritization of initiatives, the absolute realized impact doesn’t open up a vulnerable flank to question your prioritization.
When the product strategy is clear, there are usually just a handful of initiatives that you actually have to prioritize. And a lean RICE approach will help you to do just that without too much overhead.