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In my last blog, we talked about prioritizing the backlog for your organization. I shared with you that Patrick Lencioni says that if you prioritize everything, you're basically prioritizing. How can we actually articulate value to help us with creating a single prioritized backlog for our organization?
I remember back in the days of our project management office, we used to have to share with our leaders direct costs that will be mitigating and indirect cost or soft benefits, for projects or products that we wanted to be prioritized. We said if we took this work on,
we could sell this many more widgets, which would lead us to this $X millions of additional profit. But things aren't really all that easy anymore. The problem is trying to identify what is driving the increased sales or usage when there are often so many variables changing in our world. How do we tie it to this one thing?
Articulating value for things like creating an enablement or risk reduction is even more gray. But if you don't address that finding or meet that new rule or requirement, there will be impact to your company, but how much. I had someone say if we don't do this thing, the plant could be shut down and it will cost to $X millions of dollars. Now to be clear, if the plant were actually going to get shut down it wouldn't be down that long. This issue would likely go to the top of our backlog and be the top priority for the organization. Now I'm not proposing that you don't follow the rules or regulations. Compliance items tend to be way more complicated and way more costly than they really need to be. People feel like they can skip that whole return-on-investment exercise because it is “compliance related.” I had a mentor, Chris, she said in a meeting something like, “Let's not just sweep this under as a guise of compliance. What's the smallest thing we have to do in order to be compliant.”
The enablement piece is also tricky. Let's focus on things like the data lake, artificial intelligence, or machine learning. If we are able to capture “all of this data” and we're able to do A, B, and C with it, all of our products will be enabled. But it's still very gray. How much money is it making or saving? Or is it allowing for the company to build competency that will make money later? What about employee engagement items like, improving office space so that it isn’t so dreary. Or by allowing them to work remotely certain days of the week. These are all things that are difficult to articulate in the form of dollars and cents.
So we have to figure out a way to compare the value.
I like to do relative sizing each one of these areas or lenses. 1) Money, which is cost and revenue, 2) enablement 3) compliance and risk. We ask the prioritization team to compare the value size using each of the lenses and to compare them to each other using T-Shirt sizes. Small, Medium and Large. We then assign numbers to each of the T-shirt sizes such as Fibonacci numbers or exponential numbers. After we have numbers for each of the lenses and each item that needs to be prioritized, we ask representatives from the teams to size the effort of the items. They compare them to each other and not based on their normal home team numbers. We then sum up the value numbers and divide them by the effort numbers to get an ordered list.
We then look at the outcome from the formula and then see if it makes sense and move a few things around if needed.
We do this because all of our estimates are guesses. We can try to be scientific and spent a lot of time trying to figure it all out. But we don’t know if our customers will want these things. Or if things will be improved. So let’s get the quickest guess out there and see how we do.
The method I described is variant of a tool called WSJF or Weighted Shortest Job First. I like to refer to it as a simplified ROI. It is still comparing the return in value from money, enablement, and compliance with the overall investment, which is the effort.
If you want to learn more about this and how to leverage it within your team or across your entire business, please contact me.