Ask A Good Product Manager

Your product management questions answered

How do product managers prioritize requirements?

Posted on January 21, 2008 · 7 Comments

Question: How do product managers prioritize requirements?

As I see it, requirements are derived from customer feedback and evaluating competition (marketing), technical limitations as well as innovations technology), and factors that will delight the end-users (design). I suppose you could also include esoteric inputs like intuition, personal tastes & references, etc.

But how do you prioritize one issue over another? Do you pick one of these inputs (ie: design) as the driver and then let the other inputs weight the priority list? What’s the magic formula? Or at least, what’s the formula you can use to justify your choices to management or a client?

Answer from Jeff Lash of How To Be a Good Product Manager: There are different methods and tools that product managers use — there’s no one right or universal answer. In my experience, it comes down to first having a vision, strategy, and goals, and then looking at what will help you meet those goals.

What might be a “good” feature for one product would be a “bad” feature for another product which has a different strategy or is targeting a different type of customer, for example.

Obviously you then look at market research, competition, stakeholders requests, technical constraints or opportunities, and other factors. Sometimes it can be measured and chosen quantitatively — in CPG and more traditional product industries they have very advanced
techniques they use — but for a lot of web and software products it often comes down to qualitative and subjective judgment. Of course, on the web we have a great ability to use analytics to track whether we made the right decisions — is anyone using this new feature? Is revenue increasing? Did we improve our conversion rate?

I’ve known people who have tried scorecards, ranking systems, voting
(see Product Development is not a democracy), but ultimately these are just ways to avoid the responsibility that product managers have to ultimately make the important decisions.

There’s no magic formula, and in the end it might be that what makes a GOOD product manager vs. a BAD one is his/her ability to take these hundreds/thousands of inputs and make good decisions — and learn from bad ones.

7 other answers so far ↓

  • Bruce McCarthy // Feb 23, 2008 at 8:42 am

    In a recent entry of Inside Product Strategy, software product manager Dave Jones describes a modified version of a technique developed more than 20 years ago by Japanese engineer Noriaki Kano that can help you sort through long lists of requirements and enhancement requests to decide which features should be in your next release.

    The article is a bit long-winded, but it essentialy advocates combining multiple ranking schemes for your projects and assigning scores to each proposed feature (or enhancement or bug) for each scheme. You could, for example, assign scores on a 1-4 scale for things like “wow factor,” “revenue potential,” “request frequency,” or (in the case of bugs) things like “severity.” The scores you assign are ultimately arbitrary, but combining the schemes by adding up the points can help you sort through a long list of possibilities quickly. It can also provide a documented justification for your ultimate decisions.

    I used a method like this for vendor evaluation, ranking each competing vendor on a scale of 1-10 for various things like financial viability, price, support, training, demo-able interface and the completeness of their coverage in several feature areas. Adding up all the scores quickly narrowed the field to two contenders and I was able to make a final choice on one or two of the variables I felt were key. A year later we are very happy with our choice of vendor.

    Here’s the link:

    http://www.productstrategynetwork.com/content/view/178/196/

  • Brian Lawley // Feb 25, 2008 at 12:28 am

    The approach I use is the same approach I use for all of my problems, both professional and personal.

    Use a good tool to do a logical ranking. there is a free tool for this at http://www.280group.com/shareware/freerequirementsroadmapmatrix.htm – it will help you set any criteria and weighting that you want.

    Once I do this then I do a gut feel check (after letting it digest for a day or two). I find that I then get the right gut-level answer and can easily finalize and defend priorities.

    Brian Lawley
    Author, Expert Product Management
    President & Founder, 280 Group
    SVPMA President

  • Walt Campbell // Feb 26, 2008 at 2:58 pm

    It’s interesting that the Kano approach and the template Brian provided don’t take into account the cost of fulfilling a requirement.

    Is cost something not usually considered when assigning requirement priority?

    At my company, we’re now working on a requirement prioritization table. I’m advocating a fairly simple approach: the prioritization of a requirement is directly proportional to the value of fulfilling the requirement, and the fulfillment value is equal to the benefit minus the cost.

    All this is a fancy way of saying—how much will we get from meeting this requirement and how much must we spend to do it?

    For “benefit,” I’m toying with a single value that represents positive financial impact, with two multipliers (things that can increase this “impact” value): the number of customers articulating the requirement and the degree to which the requirement is aligned with company goals/vision/etc.

    On the cost side, I’ve pitched an “effort” value that also has a couple of multipliers: the perceived degree of difficulty in meeting the requirement and the degree of uncertainty regarding the effort estimate. That last multiplier is a bit weak and may be replaced by others, such as “comprehensibility of requirement” or “degree of specialization (within our engineering group) required to satisfy the requirement.”

    Eager to hear what approaches others have found to be successful.

  • Mathew Hamlin // Feb 29, 2008 at 8:58 am

    I agree with Walt’s approach of devising a cost / benefit ratio for requirements, and then including the resulting information in the larger set of data needed to make a final decision.

    On “All about product management”, Derek Morrison describes a method of utilizing Agile techniques and Fibonacci numbers to determine a “Business Value.” Combining this with a technical value should provide a ratio that derives the strongest cost / benefit ratio.

    http://allaboutproductmanagement.blogspot.com/2008/02/how-product-managers-can-estimate.html

    However, I also agree with Jeff. Be careful not to devise a system where the members of the team voting on “Business Value” assume a democracy. Utilize the inputs from the team and your customers to prioritize the requirements inline with the vision and strategy of the particular product release and future road map. Don’t get lost in the statistics and end up in a situation where a product release is only characterized by small improvements in all areas. It is still important to develop compelling messaging about a particular release and make decisions to align product development efforts to the defined goals.

  • Joca Torres // Mar 1, 2008 at 3:38 pm

    I agree with Jeff when he says that “there’s no magic formula”. I try always to use common sense:
    – know the objective of the product from your companie’s perspective and from you customer’s perspective;
    – know your customer, or future customer, in case it’s a completely new product;
    – less is more, try to implement only the minimal feature set in order to learn from real use of your product and improve it in future releases. This is easier with internet based products, but it works with physical products as well.

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  • Prioritizing Product Requirements with Scorecards - Joe Cotellese // Feb 17, 2016 at 6:46 am

    […] How do product managers prioritize requirements?: Ask A Good Product Manager: Your product managemen… “I’ve known people who have tried scorecards, ranking systems, voting (see Product Development is not a democracy), but ultimately these are just ways to avoid the responsibility that product managers have to ultimately make the important decisions.” […]

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