A few days ago, I gave a workshop on Product Ownership to 18 value decision-makers who work in one of the leading retail companies in South America. I was invited to a lovely space to train and share my experience as a Product Owner (I was a PO for two years) and the importance of prioritizing increments based on value. I want to share the gems of one of the topics we touched on in the workshop in this post: Value-Based Prioritization.
What is value-based prioritization?
When we talk about “valuing” something, we mean the importance we give to that thing. We can value people, places, objects, ideas… basically everything. Value-based prioritization determines what is most important to the business and/or the customer, ensuring that what we increase reflects those priorities. Value-based prioritization is not a gut feeling. It is not an opinion. It is not an assumption. And, of course, it is not an arbitrary decision. Value-based prioritization is based on data and prioritizing what adds the most value to that balance between organization and customer. Whatever is necessary for the customer to perceive what we increase as valuable is what has the most value and,
And let’s take this to flexible and adaptive environments. It is nothing more than determining which course of action will offer the most value to stakeholders. It’s that simple.
It’s helpful to think of “value” in terms of what the customer needs (or wants). Consequently, value-based prioritization also involves a more detailed analysis of who the customer is. Technically speaking, he is not just one person.
The first step in adopting a value-based prioritization process is to determine what “value” means to you and all of your stakeholders. Is it a high return on investment? Short increments to receive feedback? A lower-cost? Release the feature that doesn’t exist in the market? Acquire more market share? Cater a niche?…
Once you have defined the value and how it will be measured, you can collect ideas from all the parties involved. Next, you’ll need to weigh each idea against the criteria you’ve established as worthwhile and rank them accordingly.
This classification should be done by someone who knows all aspects of the increase (Value Decision Maker), ideally someone who can communicate well with both customers and teams. It is also crucial that you can make decisions for and by value.
Is it important?
The goal of value-based prioritization is to get the work most valuable to stakeholders done. Understanding that value is a perception and is contextual. Since you can’t do everything at once, prioritizing what’s important will help you as a value decision-maker make those decisions about what brings more value and priority and when. It’s not always clear what’s most important right away, but with some practice, prioritizing by value will become second nature to you and your team. Once you start prioritizing, it’s helpful to communicate the value of each item to your team so they understand the reasoning behind the order in which work gets done.
Here I would like to share with you one of the greatest lessons that minimalism that I have been practicing for years and that I continue to practice in every aspect of my life has left me and is related to one of the most common questions I receive: Jaime, how do you prioritize what is essential in your lifetime?. My answer is always the same: “Which one adds more meaning to yours?” This question is deceptively simple but one of the best ways to keep your priorities straight.
Just because you want something doesn’t mean you should do it. Instead, you should always take a step back and think about what that thing means to you and what impact it will have on your life. If you’re trying to decide between two or three things, ask yourself what they mean to you. They are all equally important if they can add meaning to your life.
But if one of them adds meaning to your life and another doesn’t, then that one is more important than the other. This simple concept applies to you as a human and your work as a value decision-maker (where you must also empathize and have all stakeholders very close).
Give meaning to what we increase.
No matter how you decide to prioritize, you must make sure as a value decision-maker that the priorities are aligned with what is most important to the organization, the incremental, and the customer. Give meaning to that increase that with a lot of effort and affection, we deliver to the hands of the client as a Job to be Done.