Prioritizing Your Backlog for Maximum Impact: Why it's Important and How to Do it Right

#In the previous episode

Remember our previous article about creating a backlog for your online product? Well, today we want to talk about prioritizing tasks and reveal some excellent methods you can use to ensure your product decisions make an impact. Prioritization is the key to ensuring your team is always working on the most important tasks and delivering the most value to your business. Ready to dive in? Let's do this!

#Why should you prioritize the backlog? 

Can't you plan everything? It's not that simple. By focusing on significant changes to the product and doing less overall, you can achieve more than by making every possible change. Some alterations may be so insignificant that users won't notice them or move any metrics. By prioritizing the backlog, you can concentrate on implementing solid ideas that can have a tangible impact on the product. Remember, every time you say "yes" to something, you say "no" to ten other features. But, by saying "no" to one aspect, you can utilize that energy to focus on something better.

#Why can't you just use any framework?

You may be wondering why you can't simply adopt any prioritization framework for your company. After all, there are numerous frameworks available. However, product managers wouldn't be necessary if it were that simple. However, human decision-making would be unnecessary if an algorithm could prioritize and yield practical results for any company. 

The truth is that every company has different goals, tasks, positioning, and market presence. What works for an enterprise company may not work for a startup with only four employees. Some companies struggle to make ends meet and need to earn money quickly, while others focus more on market position and reputation. Some have the resources to scale and attract new users, while others face infrastructure limitations and need to increase profits from existing customers. Therefore, it's more complex than adopting a framework and expecting it to work for every company.

#Prioritization methods

#ROI

There are various prioritization methods, and one of the simplest is using ROI (return on investment). This method involves calculating the amount earned from a feature and dividing it by the cost to obtain the ROI. It works well for companies with limited funding and prioritizing making money above all else. However, if a company has broader goals, such as increasing market share, expanding reach, or changing the entire market, then ROI may not be the most relevant prioritization tool.  

#ICE

The ICE framework, comprising the Impact, Confidence, and Effort metrics, offers an alternative approach to calculating ROI while incorporating a confidence factor. The confidence level typically ranked on a scale of 5 or 10, reflects the team's conviction in the feature's effectiveness.

Applying ICE involves assessing a feature's potential impact, the team's confidence in its implications, and the effort required to implement it. The product of these three factors results in an ICE score for each element, which can aid in backlog prioritization.

Teams can develop their own evaluation scale based on specific criteria to make the framework more effective. For example, they could assign impact values based on potential revenue and establish clear rules for how to rate each feature. This helps ensure that all features are evaluated on a consistent scale.

#RICE

Such a scale will be helpful not only for ICE but also for RICE prioritization. RICE, in fact, uses approximately the same calculations, but, firstly, the formula is slightly different. Secondly, reach is added here - coverage, the number of users using this feature. That is why RICE is much more suitable for companies that focus on scaling.

#Summary

It is imperative to agree on the distribution of points: all features must be evaluated according to the same criteria.

This way, you can realistically evaluate your company and its condition when prioritizing. Now you know about several popular frameworks and have an idea about prioritization, but first of all, choose the one that suits your team.