Another regular day when Kenny and Aarav met on their tea break. As they had their first sip, Aarav asked Kenny about his new work he recently started. Kenny and Aarav working as Product Managers usually exchange their daily work and ideas during their evening break besides weekend plans!
Kenny a little lost said that he with his team have spent some time and chalked down their product strategy. The stakeholders are also aligned with the thought. He also mentioned that they have planned there list of ideas and tasks for the coming quarters that fulfills the product strategies.
Product Roadmap isn't about format but about process. Good roadmap is worthless if your stakeholders aren’t aligned with it.
To this Aarav was quite impressed as even after new to work, Kenny has got clarity of thoughts with reasons for each action required. A very important trait for a Product Manager.
Kenny continued further and said that after listing down all the ideas and tasks for coming quarters now he is facing problem with prioritizing them. There are few tasks which are easy to do, few seems urgent, few are important for growth and few are his own ideas that he personally wants to start first.
Aarav smiled and said- Kenny you have mentioned a problem statement that every Product Manager face. Kenny a little confused, nodded. Aarav continued and said that this is the stage where you are stuck with a way to prioritize your tasks on Product Roadmap but also consider every factor when you do that. For this, framework like RICE comes to the rescue.
RICE - It is an acronym for Reach, Impact, Confidence, Effort.
RICE scoring model is a framework that helps Product Managers to quantify the products, features and tasks listed on their roadmap based on four factors and hence prioritize them.
But before starting this framework, there are few checkpoints to consider :
- RICE is not recommended for the initial stage startups. One should use this if they have a product that has attained a product market fit.
- RICE is used after you have listed your features and tasks in the roadmap. They should have there defined hypothesis, early numbers, target metric and strategy it follows.
- Before RICE this list is also expected to have crossed brainstorming sessions that decides which key area in what time period company wants to focus on.
Example: Say a company has planned to focus on customer oriented features in Q1, economics oriented in Q2 and so on. Hence the tasks are planned accordingly.
- RICE is one of many frameworks. Which frameworks works best for you depends on the phase of company, stakeholders and leadership.
Once it is done, RICE framework can be used to prioritize the roadmap. It considers four factors to evaluate each task in the list.
Like the name, it defines what is the reach of your product in a given time period. That means what is the number of people or events per time period. Depending upon the product, the metric can be considered.
Example: For a Fintech company-
- Personal expenses product- Out of 1000 users, 20% users will use with 150 transactions per user per month. So reach is 1000 * 20% * 150 * 3 = 90,000 transactions per quarter.
- Vendor billing product- Out of 500 vendors, 30% will do the gst billing with 150 transactions per month. So reach is 500 * 30% * 150 * 3 = 67,500 transactions per quarter.
This defines that how much will the life of your user be impacted with that product. Impact is difficult to measure as their is no defined metric for it but you can use your historical data to have an idea about it. Hence like mentioned before, RICE is not recommended for early stage start-ups.
You can choose your scale for the impact score like:
4- massive impact
3- high impact
2- medium impact
1- low impact
0.5- minimal impact
Example: In the same Fintech company example considered above-
- Personal expenses product will have relatively low impact and hence a score of 1.
- Vendor billing product will have a high impact hence a score of 3.
This defines your confidence in your estimates you have considered. It considers product that is enlisted but is not supported by any data to back it up. Example: For some product you have data to support the reach factor but not for the impact factor. Confidence will account for such cases.
You can use the following scale to define the confidence-
100%- high confidence
80%- medium confidence
50%- low confidence
Anything below 50% can be considered as ‘aspirational’ and hence prioritize accordingly.
This is a cost that you’ll have for any task you perform. It reflects the amount of time which is required from all the team members i.e. product, design, engineering. Unlike other factors, lesser the effort factor higher the task goes in prioritization list. This is the reason it is added as the denominator in the formula for RICE.
It estimates the amount of work that can be done by one team member over a given period of time. Usually it is month/ week hence the metric becomes like person-months/ weeks.
For example: A project needs 5 different team members to work in one month for completing a task then the effort is 5 person-months.
To summarize the factors -
- Reach- How many people will be affected?
- Impact- How much impact can it make?
- Confidence- How confident are you about your results?
- Effort- Amount of team effort required.
Now once each factor score is ready, just plug-in the numbers in the RICE formula and you’ll get the RICE score for each of the task on your roadmap.
The final score can be used to prioritize tasks on roadmap accordingly.
Though RICE framework gives good results but there are few companies that add one more factor of ‘Brownie points for leverage’ to this.
This is helpful in relatively large organizations where there are multiple PMs that have their predefined OKR (Objective and Key results). Now in such organizations there are chances that they might miss on few ideas that is moving one metric but is also moving the needle of some other metric, hence leverage.
So if there are any such ideas that not only is helping one metric but is also pushing another metric, these ideas get brownie points in addition to their RICE score.
After all this information Kenny got quite relaxed and excited to include this to work and took his last sip of now turned cold tea.
Before leaving, Aarav also highlighted to Kenny that it is important to understand that RICE framework gives a good ground to start your prioritization. It pushes you to ask questions like- is this idea impactful or will the team be able to do this in the time frame etc. to yourself, questions that you might miss when listing down the ideas. But after all the score you still should discuss further and move up/ down any ideas depending on leadership/ strategy/ economics/ cost/ time etc. Doing this will help you to align all the possible factors and get your complete version of roadmap.
Aarav and Kenny went back to their work mutually agreeing that great discussions mostly happen outside the walls!