Assist product improvement groups give attention to the proper priorities for the subsequent twelve months.
The annual product plan is a roadmap for the corporate and the product for the subsequent twelve months. It’s additionally a doc that quantifies the projected affect (i.e. income generated, decreased prices, and another types of worth technology related to the corporate) the product will create within the subsequent yr.
- It helps everybody give attention to the proper issues.
- It permits all groups to agree on the issues they’ll work on fixing within the subsequent 12 months. This isn’t about alignment on which people personal which issues — however extra like an settlement to what issues teams or groups can be fixing by the yr.
- It ensures everybody makes progress in the identical and the proper course.
- It builds a wholesome tradition, that’s each final result and possession pushed.
- It connects the roadmap to the corporate’s bigger mission and imaginative and prescient.
The chief crew meets and decides the areas they need the corporate to give attention to for the yr. At this stage, the main target areas are broad, and deliberately so. Conserving the areas broad at this stage permits product managers to consider inventive and distinctive options. Slender focus areas, then again, don’t depart room for innovation or making an attempt various things.
Instance: focus space for a meals supply app — “Develop into the perfect meals supply companion within the nation.”
At this stage, the main target is on defining the issues, not the options. Leaping straight to the options provides the chance of fixing the incorrect drawback and will increase probability of failure.
The earlier step ends in a protracted checklist of concepts, and now:
- The executives negotiate, talk about, and argue. However, they finally attain a remaining checklist of 1–3 focus areas. Product managers usually don’t take part in these discussions, except indicated in any other case by executives.
- Government crew shares the shortlist (of 1–3 focus areas) with non-executive leaders — like product heads, engineering heads, enterprise heads, and so on., and permits them to share suggestions, ask questions, and counsel adjustments.
- The chief crew and the respective heads agree on the ultimate checklist of the annual focus areas.
At this stage, the first possession of the method shifts from the execs to their direct studies (VPs/Administrators/GPMs), who then begin working with their direct studies (GPMs/SPMs/PMs).
The product chief and final degree product managers work with their engineering counterparts, they usually begin breaking down the main target areas into initiatives. Initiatives are usually not particular options (or actionable roadmap objects), however they’ve simply sufficient particulars for PMs and EMs to start out estimating the affect and value of doing them.
Instance: Focus space — Develop into the perfect meals supply app within the nation.
- Initiative 1 — Introduce a loyalty program to extend the avg. month-to-month order frequency by 20%.
- Initiative 2 — present real-time order standing to lower the entire variety of person complaints by 10%.
- and so forth…
PMs work with their enterprise and analytics counterparts to estimate every initiative’s affect. It’s crucial to make sure that the affect of all initiatives is in the identical foreign money.
Instance:
Focus space — Develop into the perfect meals supply app within the nation.
Widespread foreign money — {dollars} (made or saved).
Initiative 1 — Introduce a loyalty program to extend the avg. month-to-month order frequency by 20%.
- results in a rise in month-to-month orders by 20%.
- Each order, on common, has a price of ~$10.
- common order worth multiplied by the incremental orders give us the incremental income for this initiative.
Initiative 2 — present real-time order standing to lower the entire variety of person complaints by 10%.
- Reduces the entire variety of complaints by 10%.
- Each grievance wants ~10 minutes of a name help agent’s time.
- Whole complaints decreased multiplied by 10 minutes provides us whole time saved.
- Use whole time to calculate the (decreased) variety of brokers required, and use that to calculate the fee ({dollars}) saved.
At the moment, the EMs (engineering managers) create high-level effort estimations for the initiatives.
Since at this stage the initiatives are usually not well-defined, EMs usually add buffers for vagueness, unknowns, and unplanned occasions (PTOs, sick leaves, crew churn, and so on.) They work with engineers to create best-guess-estimates for every initiative. All estimates are in a typical foreign money: engineering months.
This step is normally easy. The PMs add a column for ROI (a operate of affect and value) after which kind the checklist by ROI.
On this step, the product and engineering leaders finalise the initiatives that they’ll decide to ship by the top of the yr.
And to get to that checklist, the extra info they want is the: whole accessible engineering capability.
The engineering heads have visibility on this quantity. And utilizing this information, the group is ready to objectively resolve which initiatives are doable assuming the identical capability. The output seems to be one thing just like the beneath chart:
We classify every initiative within the following classes:
- Gadgets that we will do based mostly on present capability.
- Gadgets we can do if we’ve got extra capability or if any of the objects within the “will do” class get deprioritised.
- Gadgets that we received’t do, as a result of they’re low affect, excessive price, or each.
Answering #2 above is just not easy. There are conditions the place it won’t make sense to maneuver objects from “will do” to “can do”. And in such instances, the subsequent choice is to create extra bandwidth. Engineering heads incorporate this within the hiring plans and be sure that groups have the required bandwidth by the yr.
It is very important word that on the finish of this step, we’ve got finalised and aligned on two essential issues:
- Listing of initiatives that groups decide to ship.
- Variety of engineers the groups want to rent to ship on the dedication.
This step is NOT part of the annual planning. However I nonetheless included it within the course of, as a result of it’s the speedy subsequent step after we freeze the annual product plan.
On this step, the PMs and EMs break down the initiatives into tasks or duties and with the intention of making an actionable roadmap for the primary quarter.
That’s it for at the moment. In case you appreciated the article, please share with associates. If you need extra suggestions and tips on product administration, comply with me on Twitter.
