Prioritizing Investment

Product prioritization starts with strategy. When the team cannot prioritize, it's a strategy problem. 4 strategy problems:

1. Acceptance: "we don't think strategy is important"
2. Creation: "we know it's important but we don't have one"
3. Substance: "we have one, but it's flawed"
4. Communication: "we have a good strategy, but the team doesn't know it/can't recall it/can't describe it"

Product leader/CEO must figure out the strategy problem and fix it first.

Product prioritization works with Systematic Planning. Clarify key themes and investment allocation for next 12 months / 6 months / 3 months (depending on whatever granularity makes sense for industry or product category). Example: Google used to invest 70/20/10% of it's time across Search + Ads / Apps / Other bets. X/Y/Z% framework useful when leading distinct product portfolio

Single product level, allocation themes:

1. Differentiators
2. Tablestakes
3. Incrementals
4. Embarrassments (or "broken windows")
5. Customer specials (or "large customer requests")
6. Speculative bets
7. Technical foundation (Think through the relative importance of these for product right now, keeping customer at core. Can also treat certain themes as one unit - eg Tablestakes + Incrementals)

How to decide what themes matter the most & what investment to allocate across each theme?

• Data, research, analytics and product leader judgement.
• Following questions to exercise judgement for key themes:
  • What do we need to do in the next N months to make the most meaningful progress towards our strategy?
  • What key risks do we need to mitigate or eliminate? (e.g an important customer might churn, a major systems liability, etc)
  • To what degree do we need to play Offense in the next N months vs. play Defense?
  • How important is growth right now vs. protecting what we have vs. laying the foundation for future growth?
  • Are we currently in Explore mode with this product or Exploit mode?
  • What strategy-aligned efforts will help address the team problems I want to see solved/mitigated in the next N months? (e.g morale boosting features, execution enabling "incrementals", frustration-removing technical foundation work, etc)
  • What key initiatives have the greatest Expected Value and what themes do they fall in? (~bottoms-up)
  • What is largely in my or my team's control, what do we rely on other teams for, and what are the risks there?
• As product leader, communicate the strategy with the org, key themes for the quarter, target allocation across these themes (at org level, not individual teams). Next: let the teams handle bottoms up planning - teams propose features, initiatives with greatest impact. Leader goal now is to track how planning process is progressing, share your take on team's questions and clarify things you feel particularly strong about.
  • Okay to use a prioritization framework (RICE or other) to come up with the list of things that will be taken on in the given time period (above line, yes; below line, backlog).
  • Ensure they are concrete & have clear criteria for how they'll be accomplished (launch, experiment, metrics, etc)
  • Use similar prioritization to evaluate new surprises/requests that come up after planning is done. Use strategy and key themes as a compass/north star