In this video, Heleana explains how the Value vs. Effort model works, how to assign value and effort, and how to take full advantage of the decision matrix.
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In-depth explanation:
Value vs. Effort allows teams to assess their initiatives based on how much value they will bring and how difficult they’ll be to implement.
This method has the advantage of visualization as the team will plot their items in a quadrant to decide how to distribute and prioritize initiatives.
Your team creates a prioritization matrix with Business Value as the Y-axis, and Effort as the X-axis.
You then break the matrix down into four quadrants, as shown here:
• High value & low effort results in quick wins.
• High value & high effort represents your strategic ideas.
• Low value & low effort represent your low-value items
• Low value & low-cost projects are the items you can cut out
Value vs Effort is particularly useful when you have very limited resources or when you want to eliminate group biases.
How does the Value vs Effort framework works? We will start with the Value metric. What does value mean for our business? And what does it mean to our user personas?
We can break down value into business value and user value. Establishing business value requires you to estimate how much value particular initiatives can yield for the company. This value can be determined by factors such as whether an initiative will generate new revenue, increase customer lifetime value, acquire new users, retain existing ones or reduce churn, among others.
When you are assigning a user value, you should consider the user’s pain points and how far it goes to reduce them.
• Is the market demanding this feature?
• Will it improve your users’ efficiency (or other similar metrics)?
• Will it benefit a large number of users or only a small group?
Establishing value can be done either by placing an item on the quadrant manually or by rating them using weighted scoring for more objective decisions.
After establishing value, we can determine the effort.
For most product teams, establishing effort could be as simple as estimating the total amount of developer hours a certain initiative will require.
However, oftentimes it involves a combination of other categories.
Some of the most common considerations to score effort are:
• Developer hours
• Overall resource hours needed
• Overall operational costs
• Risks
• Costs
• Story points
Which subcategories you use depends on your resources and priorities.
The quick wins should be at the top of your priorities due to the low anticipated effort and the high value they offer. Therefore, these are the tasks you should add first on your roadmap.
In the strategic part of the quadrant, you have your high value, high effort ideas. These initiatives are of great importance but are typically larger projects so you should plan for the long-run.
In the bottom left side of the quadrant, you have the low effort, low-value ideas. These initiatives could be small additions to your product that have a positive impact.
Lastly, we have the bottom right part of the quadrant which represents the items you should cut.
The advantage of using the Value vs. Effort matrix is that it allows you to uncover which items take too much effort for a low-value yield. Identifying these items to cut out will save you development time as well as other resources making room for your quick wins and strategic items.
If you want to take full advantage of the Value vs. Effort framework, you can use a prioritization tool like airfocus with a built-in prioritization matrix.
airfocus enables you to visually map out your priorities and transform your priorities into an actionable roadmap instantly.
If you want to learn more about different prioritization frameworks, you can check out our 'Mastering Prioritization' eBook (link above).
Happy Planning!
#prioritization #roadmaps #productmanagement