The 2x2 matrix: Prioritisation in lean product development

Prioritisation is a necessary evil of every product development lifecycle. Lean thinking, deciding what to build, where to focus limited resources and what customer segments to target are questions that face every organisation on a day-to-day basis. So with this being the case, why is it that companies do it so badly?

Prioritisation is one of the most critical aspects of product development. Anyone involved in product (from Junior Product Owner through to Chief Product Officer) needs to be a guardian of ‘doing the right thing’. Unfortunately, this isn’t always the case, and poor decision-making is widespread throughout many organisations.

I’ve been around the block enough times to have seen everything from the sublime to the ridiculous when it comes to prioritisation, so here’s my take on why poor prioritisation occurs, as well as a lean thinking solution that will ensure you get the team alignment that continually delivers the most value to your customers.

Poor prioritisation

Effective prioritisation can be the difference between the success or failure of a product. It’s a constant balancing act between delivering value and the limited resources available. 

Unfortunately, there are many factors that can prevent Product Managers from‘ doing the right thing’:

1) Decision makers

• The HIPPO (highest paid person's opinion) - someone who influences decision-making based on their seniority within the business
• The Antagonist - someone who actively opposed, or is hostile to any ideas other than their own
• The Dictator - a ruthless individual who enforces their ideas with an iron fistThe Procrastinator - an individual who dithers and struggles to make a decision

2) Business management tools

Many traditional business tools aren’t fit for purpose. They can be expensive, overly complex and lead to rigid, single-dimensional decision-making. 

• • The Business Case - Page upon page of jargon and unintelligible data designed to bamboozle the reader into agreeing to build the feature or product. In many cases, the reader loses the will to live way before reaching the end of the document.

  • Financial Modelling Tools - there are a host of modelling tools out there to help predict revenue and/or potential growth. Building abstract representations of real-world behaviour is expensive, incredibly complex and very prone to error.

  • Balanced Scorecard - a mixture of financial and non-financial measures that have targets set against them. Widely misused and can focus efforts on the wrong KPIs rather than generating true customer value.

  • Microsoft Excel - whilst Excel has its uses, managing a backlog with it isn’t one of them.

3) JFDIs

We’ve all been there - a huge backlog where everything is a priority.

• • Too many items on the backlog resulting in the inability to see the wood for the trees

  • Not knowing where to start opens the door for the aforementioned decision makers to start meddling - usually resulting in poor decisions

However, it doesn’t have to be this way. The following concept will help overcome the hurdles listed above and hopefully set you on the right footing to make the right decisions.

The Two by Two

A 2x2 matrix is a tool primarily used in Lean Startup to help entrepreneurs make decisions, identify what's important or risky and where to focus efforts. This can be used to great effect for product development prioritisation too.

The product backlog, if not carefully maintained, can become a dumping ground for hundreds (if not thousands) of product features and enhancements that may or may not add any true value to customers. Prioritisation paralysis regularly occurs as it becomes progressively harder to identify ‘killer’ features, as they simply get overlooked by the ‘noise’ generated by the scale of a backlog. 

With a few minor tweaks, the 2x2 matrix can be used to sort the wheat from the chaff. It’s incredibly simple to use and enables you to quickly determine the relative value created vs the effort required to deliver the feature.  

Two by Two, Step by Step

Draw a large ‘+' sign on any spare wall space you can find. Mark ‘Value’ and ‘Effort' along the vertical and horizontal axes respectively.

Value: the value generated for your customers / Effort: the effort required to deliver

Write up each of your backlog items onto Stattys (if you haven’t come across them yet, try them - they're awesome!) Alternatively, ye olde faithful Post-It notes work just fine. Quickly and objectively start plotting them on your 2x2 matrix. 

When considering the relative value of each story there are a number of things to consider:

• • Reach - How many customers does the feature impact? A feature that’s invaluable to a small subset of customers is likely to have a lower relative value than a smaller feature that impacts your entire customer base

  • Customers - Customers may not always be those paying for or using your product.  A customer could be a colleague or business unit within your own organisation

  • Revenue - Will the feature drive revenue? If so, how much?

  • Acquisition - Will the feature help drive new customers?

  • Efficiency - Does the feature help drive efficiency in customers’ lives - be that internal customers (colleagues), or external (paying) customers?

  • Brand - Does the feature enhance your brand awareness?

Tips

1. 1. Work as a team - the framework is a great tool for collaboration. Having a diverse range of perspectives of value will improve the placement of features in the matrix

   2. Work quickly - this doesn’t need to be a work of art

   3. Remove emotion - take each card in the abstract and compare it against other cards

   4. Try to avoid putting everything above the line (but not essential - see below)

Balancing the 2x2

Once you’ve mapped out your backlog on the 2x2 it’s time to balance the books. In an ideal world, you'll have a 2x2 with an equal distribution of cards across each quadrant. However, in reality, it's common to end up with more cards above the line as everything is deemed high value.

One of the benefits of the 2x2 is its simplicity and balancing the matrix is easy too (if somewhat crude.) To balance the matrix literally redraw the X and/or Y-axis so there are roughly the same amount of cards in each quadrant. All features should be ranked against each other so it doesn’t really matter where the axis lies.

With a balanced 2x2 you should now have a clear idea of where to focus your efforts in order to get the best possible return for investment.

The 2x2 has 4 distinct quadrants:

Top Left - The 'why aren’t you doing this now?' quadrant
Features in this quadrant offer the best value for customers with minimal effort. These are your low-hanging fruit that should be worked on immediately

Top Right - The ‘Breakdown’ quadrant
Features here offer high value but require significant effort to get in front of your customers. Try to breakdown these features into smaller, bite-sized features and re-map them against other features in the 2x2

Bottom Left - The 'Friday afternoon’ quadrant
Features offer lower value for customers but are easy to implement. These are great ‘fillers’ which can be slotted in as and when there are small amounts of downtime, or between larger features. It’s also a great way to ensure continued momentum

Bottom Right - The ‘Don't even think about it (yet)’ quadrant
Whilst still offering some value to the customer these shouldn’t be prioritised at this point in time. These items are likely to require significant effort to deliver and offer lower value to the customer than other items in your backlog

Revisit the 2x2 regularly

As your product develops over time revisit the 2x2 matrix regularly. You’ll hopefully be continuously learning about your product and customers through A/B tests, analytics, customer insight, customer feedback etc. Re-balance your matrix when necessary - items deemed to be low value 2 months ago may now be higher value relatively compared to other features on the backlog.

Stay lean, stay competitive 

Businesses today need to learn from the lean startup model in order to stay competitive.

The 2x2 matrix is a quick and simple tool that will transform the way you prioritise your product backlog. It helps focus on features/enhancements that add the most value to your customers compared to the effort required to deliver them. Working best in a collaborative environment, it helps galvanise stakeholder buy-in and gives the ability to easily communicate (and in some cases defend) the decisions you make. 

Good luck - we’d love to hear how you get on…!

If you'd like to chat about product & service design and how we can help you prioritise customer value, get in touch.