1. Real World Strategies for
Prioritizing the Product
Backlog
Greg Cohen Ron Lichty
Principal Consultant Interim VP of Engineering
280 Group LLC RonLichty@sbcGlobal.net
greg@280group.com
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2. About Us
Greg Cohen Ron Lichty
• Fifteen years of PM Experience • Twenty years Eng Mgmt Experience
– Med diagnostics and devices – Apple
• Chiron – Fujitsu
• Smith & Nephew – Charles Schwab
– Pandesic (SAP and Intel) – Razorfish
– IdealLab! – Zone Alarm
– Instill – startups
• Principal Consultant, 280 Group • Consulting VPE
• Certified Scrum Master • Certified Scrum Master
• SVPMA Board Member and former • SDForum Board Member
President
• Co-Author of next year’s
• Author “Agile Excellence for Product “Managing the Unmanageable:
Managers” Rules, Tools & Wisdom for Managing
Software People and Projects”
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3. Prioritizing by value is tough
and must be balanced with risk
Return
Risk &
Cost
Short term vs long term 3
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4. Agenda
• Overview
• Prioritizing by value
• Mitigating risk
• How to leverage emergent architecture
• Managing costs
• Impact of time on priority
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5. Prioritize product backlog
by business value
• Determine business value
• Value is often only realized by a collection of features
(e.g. multiple stories that work together)
• Value determination usually
requires judgment
• Individual’s value judgments
based on tacit knowledge
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6. Return on Investment
• To your business
• For your customer
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7. Market Opportunity Scores
Desired Outcomes Importance Satisfaction Opportunity
Be able to know if an accessory
8.5 2.1 14.9
is compatible with my camera
Minimize the time it takes to find
a camera that meets my skills 9.2 7.2 11.2
and budget
Be able to track my order from
7.3 9.0 5.6
purchase thru delivery
Algorithm:
Opportunity = Importance + (Importance – Satisfaction)
Anthony W. Ulwick, What Customers Want, 2005 7
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8. Buying Features
• Buy a feature1
– Create list of features
– Play with 4 to 7 customers at a time
– Price some feature so customers have to pool money
• Spend $100 of R&D
– Create list of features
– Ask customer to allocate R&D
budget to the list of features
1Luke Hohmann, Innovation Games, 2007. Online version http://innovationgames.com/online-games/ 8
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9. Subjective Value Determination
• Set a vision for the product and place each
requirement in the context of that vision
• Establish criteria and rank requirements
– Prioritization Matrix
– Buy-in is reinforced when criteria and rankings are
done as a group activity
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10. Example Matrix
Note: Cost and Risk still need to be considered
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11. Mitigating Risk
• Practice Risk-First Development
– Identify project risks
– Weigh the risk
• your project can tolerate
• your organization can tolerate
– Give priority to stories and
tasks that mitigate
unacceptable risk
– Consistent risk: UI
(need to iterate UI)
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12. Leveraging Emergent
Architecture
• “Gift” features: gifts from development
• Based on:
– Chartering
– “Commander’s Intent”
– Communicating vision
• Also based on listening for
brainstorms, insights
– Encourage them
– (but stop short of encouraging
out-of-process dev)
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13. Maximizing technical investment
and learning
• Let your team invest in work with technical
pay-off
– Early learning and maximal understanding
– Slash technical debt
– Reduce uncertainty
– Choosing / prioritizing backlog items
that facilitate design to emerge, prove
workflow, test architecture
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14. Managing Costs
• Collaboration
– Development can provide cost - at least relative
cost
– Product Owner can ask: What can I do to reduce
that cost - to get the ROI I want?
• Splitting
• MMF
• Alternatives
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15. Impact of time on priority
High risk New industry standard
Return Return
Time Time
Maintenance
Microprocessor
Upgrades
Return
Return
Time
Time
Denne & Cleland-Huang, Software by Numbers, 2004 15
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16. Risk, Return, Cost View
High Return
Feature 4
Feature 3
Feature 5
Low Risk High Risk
Feature 2
Feature 1
= cost
Low Return
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17. Summary
• Prioritizing by value is complicated
• Mitigate project risks by doing risk first
development
• At times it makes sense to place a high risk
item before a higher value item
• Need to balance Return, Cost, and Risk
• What you want and what it costs are a
conversation
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18. Additional Resources
1. Books
Agile Excellence for Product Managers
by Greg Cohen
2. Discussion Groups
a) “LeanPM” Yahoo! discussion group
b) 280 Group LinkedIn Group
3. Free PM Templates
www.280Group.com  Resources
4. Training
Agile Product Management Excellence Course
• AIPMM PMEC West Conference, May 24 - 26
• San Jose, June 11 (www.280group.com, Save 15% AGPME15)
• New York, June 25 (www.280group.com, Save 15% AGPME15)
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19. Thank You
Contact us
greg@280group.com
RonLichty@sbcGlobal.net
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