Stress free prioritization with value frameworks3

Stress free prioritization with value frameworks

Coming up with ideas of problems to solve, features to add, or tasks to work on might be easy. What’s usually harder is figuring out what to prioritize and how to handle competing interests.

What do you do if you can’t do all the things at once?

How do you avoid the trap of focusing on the easiest changes because the task of prioritizing is so overwhelming?

That’s where a value framework comes to the rescue.

Overwhelmed by ALL the things? Create a value framework to prioritize.Click To Tweet

Heads up: This post is long but will go into major depth covering:

  1. What a value framework is
  2. How to create one
  3. Tips for how to guide other people to create one with you
  4. Advice to help you avoid and handle some of the pitfalls you might run into

 

What’s a value framework?

A value framework is a tool that provides a systematic way to compare ideas, initiatives, features, or tasks based on benefits and cost. Creating a framework can be very helpful when you’re trying to optimize among multiple criteria or when you need to justify your decisions to other stakeholders.

You already use value frameworks subconsciously throughout the day. Picking something to eat for dinner is a function of what you’re craving, what other people in your household want, flavor, and the tradeoff of the cost and time needed to obtain that meal.

A value framework is just a written version of the criteria you used to make the decision, which means it’s easier to standardize your decision making when comparing a large list of options, when making decisions over the course of days, weeks, or months, or when working with a larger group of people.

You can rate almost anything with a value framework such as,

 

Building your framework requires defining a set of criteria that represent your high-level goals, and then you can rate the ideas against their ability to deliver on those goals.

One option is to organize your value criteria into four categories:

  • Customer value
  • Business value
  • Time value
  • Opportunity enablement

 

The sum of those categories gives you the total value of the item. When you compare the total value vs. the complexity or cost of an initiative then it is easier to identify,

  • simple and valuable changes vs.
  • larger yet still valuable changes vs.
  • other small/kinda valuable changes that could be bundled together
  • vs. others that are complex and low value and should be avoided

 

Value framework

We’ll go into more depth about what each component of this equation represents in the following guide.

How do you create a value framework?

The step-by-step guide

Read this complete guide first to get an overview of the process. Then there’s a free gift for you at the end. 🙂

 

Step 1) Define the purpose of the framework

First things first: Who is prioritizing the work? Is it you or are you advising someone else? Who has final say or veto power over the priorities?

If you are the final decision-maker, will be prioritizing by yourself, and executing by yourself then you can skip to step 2.

If you’re trying to help someone else, they might not realize why a framework would be useful. The answers to the following questions can be used in your pitch. Take a few minutes and jot down the answers to these questions.

  • What difficulties do you/they currently have when prioritizing?
  • Do you/they have the knowledge required to make decisions about the priorities?
  • How long does it take to prioritize?
  • How often do priorities shift?
  • How do other stakeholders react to the resulting priorities?

 

A value framework can be extremely helpful if

  • the decision-maker seems overwhelmed by the task of prioritizing a large list of seemingly different items
  • the prioritization process takes longer than you’d like (which could be because the decision-maker is overwhelmed or doesn’t have enough time or knowledge to make an informed decision)
  • the reasons behind decision-making are not clear to other stakeholders or the people executing the work
  • you’re executing work but not getting closer to your goals
  • priorities shift often

 

If decision-makers seem hesitant to try out a new process, outline the answers to these questions, in their own words if possible.

Ex. “You mentioned that you weren’t sure how to prioritize the work when we could go in many different directions. What do you think about trying out a value framework that can help you rate the value of items given their contribution to your business goals?”

 

Step 2) Define your criteria

The benefit of a value framework is that it clearly outlines a limited set of criteria, so you can quickly and consistently rate the relative value of items. That criteria ideally should be broken down into something measurable and tangible. That can help resolve conflicts if one team member defines “trust” a different way than someone else.

If your organization has already defined strategic goals or key performance indicators, those are great to pull from. It’s often easier to encourage adoption of the framework if you are referencing goals that were already endorsed by leadership.

Sometimes strategic goals are a little vague for your application so creating a mind map could help. For example, you could take a component such as “improve customer satisfaction” or “improve platform stability” and create a mind map of topics that could influence that goal.

Another way to approach this step is to work through each category of the value framework individually:

  • Customer value
  • Business value
  • Time value
  • Opportunity enablement
  • Complexity

 

Customer value

How do your customers define a successful interaction with you? This will require getting to know your customers a little better and understanding what is important to them perhaps through interviews or surveys. Think about one person interacting with your business or product.

Examples of customer value
  • Addresses key pain points
  • Quality product or service
  • Trustworthy or delightful experience

 

If you run a resort, your criteria for customer value might be time spent waiting to check-in, the quality of food, or the number of activities available.

If you’re trying to improve a hospital, customer value might be the quality of care, the personal attention you receive from a doctor, or how difficult it is to schedule an appointment.

 

Business value

How does your business or organization define success? Is it by the volume of people you reach? Your efficiency? The quality of product you deliver?

Examples of business value
  • Number of customers served
  • Number of customers served within a special segment (ex. at-risk or underserved)
  • Revenues
  • Time to market
  • Lead times
  • Public reputation
  • Service or product quality
  • Employee ratings
  • Market share
  • Impact on customer life (ex. # of customers who are now employed thanks to your services, # of vaccinations, the success metrics of other businesses you help if you offer B2B products or services, etc)

 

For the resort example business value could be your occupancy rate, the number of 5-star reviews, or additional revenues you can generate.

For the hospital, business value could be the number of critical cases you help, employee satisfaction scores, or how efficiently resources are used.

 

Time value

Is it more valuable to do this now or later? Is there an immediate deadline to meet or could this feature be done at any time during the next year? Is there a window of opportunity now that could disappear soon?

Is there a cyclical demand for this product? Such as seasonal demand or a relationship to the academic year?

Note: this is the one that trips people up the most. It can turn into a “well, I want it now so it has a higher time value.” Question people’s ratings during the discussion and make your time value criteria as specific as possible, yet tailored to your industry.

Examples of time value
  • Consequence of not acting immediately
  • New law or regulation to comply with in the coming months
  • Seasonal impacts
  • New opportunities with limited time frames. Will waiting mean that the opportunity disappears and therefore the value of this change will be lower in the future?

 

In the case of the resort, time value could be related to seasonal trends. It’s probably more valuable to create some advertising about getting away for the winter in January than waiting until May (if your customers are in the Northern Hemisphere).

In the case of the hospital, time value would probably be based on the criticality of cases or the timing of an investment.

 

Opportunity enablement

Some changes by themselves don’t add a lot of immediate customer or business value but they provide opportunities for future enhancements. These are usually based on setting up an infrastructure that allows you to more easily add value in the future. It may also expose new opportunities.

Examples of opportunity enablement
  • Networking
  • Building or improving a website infrastructure
  • Buying new real estate
  • Conducting research (such as surveying customers, running focus groups, or creating prototypes)

 

Resort example: Opportunity enablement could be organized by the scale of impact. Maybe making some changes to the lobby could unlock some opportunities while partnering with the community or expanding into a new city enables maximum opportunities.

Hospital example: Opportunity enablement for a hospital could be conducting R&D research. Funding a project could be a medium impact, while setting up a brand new lab might receive a high score.

 

Complexity

In the denominator of the equation, you have complexity or job size. Complexity is a better measurement at high levels when you can’t speak to how much it will cost another team to execute the change.

Typical factors used to define complexity are:
  • Number of parties involved (more coordination required increases complexity)
  • Number of parts involved (physical parts or IT systems that need to interact)
  • The size of the change
  • How much control you have over the change
  • T-shirt sizes. If you can group activities into relative sizes then a XS would represent the complexity of one of the least complex items and an XL would represent the largest. This technique works best if you’ve been working on a project for a while and can more easily gauge how a new initiative might compare to past initiatives, features, or tasks you’ve accomplished. If you’re starting in brand new territory that you have little experience with, then you might want to use a combination of the above criteria instead.

Typical factors used to define job size are:
  • How long the change will take
  • How much money the change will cost
  • Story point costs (used in agile software development)

 

Closing out both the resort and hospital examples, complexity for the projects could depend on the cost, regulatory constraints, or staff needed.

 

Pulling it all together

After you gather all of your criteria, look for redundancies or gaps. If something adds both customer and business value you don’t need to account for it twice.

If your business is extremely focused on one initiative then you could consider adding more weight to that criteria but in general, it’s easier to keep all categories with the same weighting. This avoids unnecessary debate around if a factor should be weighed 0.2 or 0.3. The idea of the framework is to quickly reach consensus on rough value in order to prioritize and make things happen, not to precisely calculate the projected value added.

 

Step 3) Define your scales

Now that you have your criteria and a high-level description of what the criteria represents, you’ll want to define the rating scale of each criteria. To keep it simple, try a 5-point scale with 5 being the highest value, 3 being a medium impact, 1 being a low impact and 0 being no impact. Think about what a change scoring a 5 would do. It should represent the highest feasible value a change could provide.

Does it provide an enterprise impact? Does it provide the fastest improvement? Are you impacting millions of people, thousands, or tens?

Write down 5= [description]

Then keep going and describe what a small and medium impact would look like. You can also go ahead and define what a 2 and 4 would represent or leave those as additional options when 1, 3, or 5 don’t quite fit.

 

Step 4) Test your framework

You defined the criteria either by yourself or with a group. Now it’s time to test and refine the framework. Take an existing item and try to rate it using your framework. Just go line by line and try to assign a number value to each. You could do this by yourself, with a group where everyone calls out numbers, or with a group where everyone quickly assigns their own ratings and then shares. Tracking all of this in an excel sheet is easiest while prototyping your framework.

Did you run into any difficulties? Did people disagree? Identify if they disagreed because of differing understanding of the item or if it is because the definition of the criteria was confusing.

Go through a few items and make adjustments as needed. Then, to calculate the total value score, average the criteria in each of the four value categories and then add them together. Then average the scores in each of the complexity criteria. Dividing the total value score by the total complexity score will give you your final calculation. The higher the number, the larger the value added and lower the cost. Sorting the list by this column will easily give you a suggested list of priorities.

Look at the resulting list. Did anything surprising rise to the top? Anything surprising drop to the bottom? Anything that may cause stakeholders to overrule or disagree with the ranking?

This is where it gets tricky. If powerful or loud stakeholders disagree with the framework there is a risk that it will be abandoned. On the other hand, you don’t want the desires of one group to deflect efforts from the broader goals.

Given what you know about the stakeholders, review to make sure that they would respect the source of the criteria even if they might feel a little disappointed. If the stakeholder has the ability to veto decisions, make sure you understand what factors they include in a decision and adjust if you are missing a whole value category.

Note: Promises to others often cause items to be prioritized but they do not in themselves indicate that the change is valuable. I recommend leaving that out of your value framework and tracking that elsewhere, perhaps as a note or flag.

 

Step 5) Define how you’ll use the framework

Now that you have the framework, it’s more likely to be adopted if you determine ahead of time how it will be used. Will there be formal meetings at regular intervals? Who will be involved? Who will rate items and how?

One process that I’ve found works well if you have a group rating items is to discuss the item together and resolve any knowledge gaps. Then each voter rates the value via a polling device. If there is drastic disagreement then discuss further. If everyone clusters around one number then just use that number and move on.

Another option is for someone knowledgeable about the items to pre-fill the values before the discussion. That way the discussion can be focused on any areas of disagreement.

 

Step 6) Socialize and use the framework

Now that you have the framework and a plan for how to use it during your regular job it’s time to use it. If the people using it were in the committee creating it then you’re off to a good start and just need to schedule sessions in your calendar to run items through the ranking.

If the users were not involved then you might need to run a brief workshop introducing the framework, explaining how they will vote, and then running through some examples with them.

A good kick-off for a rating session is to review the rating criteria so they are fresh in everyone’s mind. Then pick an item and provide a brief summary about what the item is, whom it impacts, and the problem it solves. Allow participants to ask questions and share knowledge. Then move onto the voting process, which you defined in step 5.

It’s also a good idea to share the framework with your own team members who will be executing the work so they know where their priorities are coming from. Sharing it with other teams will help them understand the priority of any requests they may send to you for support.

 

Step 7) Continuous improvement

Make adjustments as needed to the criteria and rating to improve comprehension and stay in line with enterprise goals. If there is a large shift in the market, executive goals, or your product or service then you might need to refresh the framework by running through this process again.

 

Issues to look out for

Some things to look out for that could influence the success of the framework:

Do you have buy-in from decision makers who could overrule the final prioritization?

Solution: Share your criteria, reasoning and resulting list with any ultimate decision makers. If you can, include them in step 2 when you were brainstorming criteria.

Do the people prioritizing understand the meaning of the framework?

Solution: If you’re seeing votes that don’t make sense given what you know about the item, then ask raters how they came to that conclusion. You might realize that they are confused by what the criteria represents.

Do the people prioritizing understand what the idea represents?

Solution: As the above scenario, if you’re seeing votes that don’t make sense given what you know about the item, then ask raters how they came to that conclusion. Share any additional information you have about the item that they might not. In most cases, there’s disagreement because people were either not in sync about the scope of that item or because they didn’t have enough information to make an informed decision.

How long does the rating process take? Do people seem energized or fatigued during it?

Solutions: If you notice people losing focus during the process, look for ways to automate or pre-fill the mechanical steps of entering values. That will free up more time for sharing knowledge about what the items represent.

 

Ready to get started?

 

framework template mockup

Once you have a value framework to prioritize items you should find that the process is faster, less stressful, and more transparent. Let us know in the comments if you have any further questions, stories to share, or advice for others trying to establish their own frameworks.

 

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