If you’re like most people in fast-growing, busy organizations, you have way too many things on your plate. It can be hard to maintain focus because of all the competing priorities:
- You’re currently doing 5-10 ongoing, long-term things.
- You’ve agreed to do several more, or have agreed they’d be good to do, but haven’t started them.
- You’d like to investigate another 5-10 things you think could be beneficial.
- You’re inspired about some additional ones but not sure how to rank them (although you think they could be beneficial and you’re sure that, due to your eagerness, you could make things happen fast).
And so on. How do you prioritize?
I suggest something that’s worked well for me. It’s very simple, perhaps even simplistic, but it can make a material difference in your ability to say no (or yes) and thus to actually get some things done that will move the ball down the field in a meaningful way.
(Remember, a project that’s actually contributing to the top or bottom line, even in a small way, is better than lots of partially finished ones that have a lot of potential.)
The way I suggest is a Return On Investment calculation. It’s a simple spreadsheet. One row per idea, task, topic, project, or whatever it is. A few columns:
- The item.
- The investment. For example, in our product backlog worksheet at VividCortex, we have estimates of engineering cost per feature. There is one column per team, and all the columns are summed together.
- The return. To continue the example, we have the estimated sales impact, in new business and in renewals or upsells.
- The ROI. It’s simple: the sum of return, divided by the sum of investment.
- Sort the spreadsheet by ROI and you’re done.
It really can be that simple.
Now, how can you put this to work for yourself? In general, you need to consider what metrics you want to quantify things. My advice? Avoid vanity metrics, but don’t over complicate. KISS and you’ll actually get things done; complicate and perfection will become the enemy of good. Examples:
- Product features might have investment in estimated person-days and return in estimated dollars of sales, or estimated percent lift in sales. If you want to get fancy, you could try to balance short-term and long-term, too.
- Marketing initiatives might have investment in person-days and return in page views or leads generated.
- As a busy executive, you might consider investment in hours of your time, and return in estimated lift of productivity others will experience, multiplied by the number of people affected.
What are the pitfalls? I believe there are a few major ways you can stumble in this effort. One is to over-complicate. Another is to take the spreadsheet too much at face value. Consider the spreadsheet above, for example. It looks like we ought to go thought-leader as hard as possible, but that’s a big project. Break it down! Try to get small wins quickly as well as having a balance with longer items over the long term.
Another is failing to consider which are the biggest levers. Suppose you’re a database administrator. Should you invest in productivity tools, such as database monitoring tools like VividCortex , or should you work on code reviewing developers’ queries so you find and fix all the bad queries they’re releasing?It’s a trap! You could make a huge impact on a larger team: the developers. Although you are one lone DBA and your life is pretty miserable (a topic I could go into elsewhere at length), you’re trying to serve lots of developers. I spoke yesterday to a DBA who was the lone person trying to serve a team of devs that grew from 20 to 100 in the last couple of months. He was trying to do code reviews for all of them. A tool might make him 10% more productive in that regard. But… what if he gave the developers a tool that made them more productive without him? That’s a huge impact, much larger than anything he could do for himself. Moral of the story is always look for how you can make the largest impact overall for the largest thing (team, system, group of customers, etc).
One last topic. How do you estimate the costs? I have seen this done a few ways. One of the tenets of Agile that I really agree with is that the ability to estimate the cost (or effort, or investment) breaks down very quickly after a particular size is reached. For example, in Pivotal Tracker they suggest using a Fibonacci Series of numbers for “points” of effort. The idea is that there is less and less precision after a point. I’ve used Fibonacci Series of numbers, divorced from any real metric and just associated with bands of size (you could use Starbucks sizing, for example, like “This project is a Venti”). I’ve used them and assumed they correspond to something concrete, like person-days. I’ve also used percentages, as shown in the screenshot above.
Originally published at How To Prioritize Anything With A Simple ROI Model.