“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” – Sun Tzu
Models for Prioritizing Your Roadmap: Choosing the Right Approach for Your Company’s Growth Stage
Creating and prioritizing a roadmap is challenging, especially as your company grows and evolves. A roadmap that aligns with a company’s objectives can drive growth and deliver value, but the prioritization framework should evolve with your business stage. Here, we’ll explore different models for roadmap prioritization, financial metrics to consider, formulas to aid decision-making, when to apply them, and pitfalls to avoid.
1. Weighted Scoring Model
The Weighted Scoring Model is a straightforward, flexible approach to prioritize features or projects based on a set of criteria important to the organization, assigning each criterion a weight based on its importance.
How it Works:
- Identify key factors for prioritization (e.g., revenue potential, customer impact, strategic alignment).
- Assign weights to each factor (e.g., revenue might be weighted higher if revenue growth is the current focus).
- Score each project on these criteria and calculate the weighted sum to determine priority.
Formula:
Priority Score=∑(Score per Criteria×Weight)
Financial Metrics:
- Revenue Potential: Estimated revenue contribution from the feature or project.
- Customer Lifetime Value (CLTV): Estimated increase in CLTV based on feature adoption.
- Cost Reduction or Efficiency Gains: Reduction in operational costs as a result of implementing the project.
When to Use:
Ideal for early to mid-stage companies where priorities might frequently change. Useful when resources are limited, and decision-making needs to be transparent and aligned with the most pressing goals.
Pitfalls to Avoid:
- Overweighting factors that have short-term impact, leading to a backlog of low-impact features.
- Frequent re-weighting can lead to inconsistency, which might confuse teams and stakeholders.
2. RICE Scoring Model
The RICE Model is another flexible prioritization approach that considers Reach, Impact, Confidence, and Effort to calculate a score for each item in the roadmap.
How it Works:
- Reach: The number of people or accounts impacted by this feature in a set time.
- Impact: How much this feature could contribute to the company’s objective (measured from 0.25 to 3).
- Confidence: How sure you are about your estimates (measured as a percentage).
- Effort: Estimated number of person-hours, days, or weeks required to complete the project.
Formula:
RICE Score=(Reach×Impact×Confidence)/Effort
Financial Metrics:
- Revenue per Customer: Helps quantify the impact of Reach.
- Operating Margin: Informs confidence in the potential financial impact.
When to Use:
Highly useful for mid-stage companies where optimizing for limited resources and maximizing impact is critical.
Pitfalls to Avoid:
- Estimations can be overly optimistic. Underestimating effort or overestimating confidence can skew priorities.
- Reach and Impact may overshadow other factors like retention or long-term alignment with strategic objectives.
3. Cost of Delay (CoD)
Cost of Delay is a model that helps understand the economic impact of delaying one feature or project over another. This is useful for prioritizing high-impact projects by quantifying the opportunity cost of not delivering them sooner.
How it Works:
- Calculate the potential revenue or savings lost for each month of delay.
Formula:
Cost of Delay= Impact Value / Lead Time
Financial Metrics:
- Monthly Recurring Revenue (MRR) Impact: Calculates the impact on MRR for SaaS businesses.
- Churn Reduction: Calculate the savings from reducing churn due to timely delivery.
When to Use:
Useful for growth-stage companies focused on scaling fast, where prioritizing high-impact and time-sensitive initiatives is essential.
Pitfalls to Avoid:
- CoD is complex and requires accurate estimates, which can be difficult to calculate in high-uncertainty environments.
- Can lead to neglect of features with long-term benefits if immediate CoD is low, leading to a lack of strategic vision.
4. Kano Model
The Kano Model focuses on classifying features based on customer satisfaction and value addition. Features are categorized as Basic Needs, Performance Needs, and Delight Needs.
How it Works:
- Classify features based on their impact on customer satisfaction.
- Prioritize Basic Needs first, then Performance Needs, and finally Delight Needs as resources allow.
Financial Metrics:
- Customer Satisfaction Scores (CSAT): Measures potential improvement in CSAT by addressing each feature.
- Net Promoter Score (NPS): Calculate potential gains or losses in NPS.
When to Use:
Best for early-stage to mid-stage companies with a focus on customer retention and satisfaction.
Pitfalls to Avoid:
- Over-prioritizing Delight Needs can waste resources that could be better allocated to Performance Needs.
- Underestimating Basic Needs can lead to customer dissatisfaction and churn.
5. Objective and Key Results (OKRs) with Roadmap Alignment
Using OKRs to align features with company-wide objectives creates a roadmap that is not only strategically aligned but also measurable. Each feature or project is tied to specific key results that contribute to the objectives.
How it Works:
- Define your company’s objectives and key results.
- Prioritize projects that have the highest potential to achieve or contribute to these results.
Financial Metrics:
- Goal-Related Revenue Growth: The percentage of revenue growth that can be attributed to OKR achievements.
- Customer Retention: Features with a direct impact on customer retention align well with OKRs.
When to Use:
Effective for all stages but especially for larger organizations aiming for alignment across teams and departments.
Pitfalls to Avoid:
- Misalignment between short-term and long-term goals can cause features to be deprioritized if they don’t show immediate OKR impact.
- Teams might focus on achieving key results in isolation, potentially overlooking dependencies or cross-functional impact.
6. ICE Scoring Model (Impact, Confidence, Ease)
The ICE Scoring Model is a simpler version of RICE, omitting Reach, which makes it faster for high-level prioritization without extensive calculation.
How it Works:
- Impact: Predicted value of the project on the goal.
- Confidence: Level of certainty about impact and effort.
- Ease: Effort required to complete the feature or project.
Formula:
ICE Score=Impact×Confidence×Ease
Financial Metrics:
- Revenue per Effort: Ratio of revenue generated per unit of effort.
- Implementation Cost: Direct cost involved in completing each feature.
When to Use:
Best for early-stage startups needing quick wins, where the aim is to build and deliver MVPs or proofs of concept.
Pitfalls to Avoid:
Overuse of ICE could lead to a backlog of small, incremental improvements at the expense of more strategic projects.
Lacks complexity for assessing long-term value, potentially deprioritizing high-effort, high-impact projects.
Wrapping up…
Selecting the right prioritization model depends on the size, maturity, and strategic goals of your organization. For early-stage startups, simpler models like Weighted Scoring or ICE help you focus on immediate value. As your company matures, models like Cost of Delay or OKR alignment become valuable for optimizing growth and strategic alignment. By matching your prioritization model with your growth stage and strategic objectives, you can maximize the impact of your roadmap, focus on projects that align with your business goals, and avoid common prioritization pitfalls.
