80/20 Rule| Pareto Principle | How does it help Product Managers?
A principle you should keep it handy as a Product Manager and apply during day to day work.
Hey!
First of all, let me explain to those who are not aware of the 80/20 rule. 80/20 rule is, for many events, 80% of the result comes from 20% of the efforts. It is also called the Pareto Principle. If you want to relate it to the Product Management world, then think it like 80% of the business values are getting generated from 20% of the features.
There is one crucial decision that the Product Managers MUST take every day, which is “Prioritization”. Which feature to build first, decide on MVP, plan for go-to-market strategy, etc., etc. As a Product Manager of data products, I always feel the urge to prioritize topics one over the other. The question remains un-clear on what basis? Though there are several techniques that I will explain to them in upcoming blogs, the effortless one is always looking for the opportunity to generate more value with fewer efforts.
Pareto Principle does help us in “identifying the value by ordering tasks and prioritizing”. Let’s take an example and prioritize one feature over the other:
Case: Consider a situation where you are a new Product Manager/Owner assigned for a reporting tool product.
Current Situation: It’s a new product, and you have limited time and capacity to build base features. Below is the list of features you have got after doing the first round of discussion with all the stakeholders:
Steps for quick prioritization:
i.) Take each feature and put them in the right development order.
ii.) For each element, ask why five times and you will get the answer quickly.
iii.) Prioritize based on the value it generates for the fewer efforts and costs.
iv.) Assign weightage to each feature, and you will have your priority matrix.
Please note that don’t forget to apply 80/20 rule, build only 20% of features and generate 80% of the value.
I will let you come up with your priority matrix following the steps above.
Please note that priority comes from the organization’s strategy as well, so don’t forget to talk to upper management and re-confirm your understanding. As a Product Manager, you should always align your product objectives/goals towards the long term strategies set by the company.
Thanks for taking the time to read it! I hope this will help you in day to day prioritization hassle. Do let me know your thoughts and questions via response.
