Estimating impact on Key Business Outcomes and derive value scores

Once we have a backlog of user features, we need to estimate the impact of those features on invested business outcomes. I use the word "estimate," since we're only trying to guess the extent of the impact that a feature could have on our business outcomes. Even when we have data and insights about usage patterns and needs, we may not be able to accurately pinpoint our product's performance. Since businesses (and products) operate under high ambiguity, we may have little control over what could influence our product's performance. So, in order for us to plan ahead, we have to rely on past data, our business aspirations, our resources, our capabilities, our strengths, and our weaknesses:

Deriving value scores

In Chapter 2, Invest in Key Business Outcomes, we discussed using the Investment Game. We were able to capture the amount that business stakeholders would be willing to invest in the Key Business Outcomes. For the ArtGalore digital art gallery, we considered an investment as follows:

Based on our preceding user story map, we can create a sample list of feature ideas (given as follows). I am calling them ideas because these are not yet confirmed to be product features:

Feature ideas that meet business outcomes:

1. Premium art buyers can sign up to receive a newsletter with details of upcoming art shows, artists, and artworks
2. All art buyers can choose one or more artworks listed in the newsletter and purchase them
3. Smart recommendations for artworks to include in newsletter (internal)
4. Existing buyers can enter a lucky draw to meet an artist of the month
5. Auto-create newsletter content instead of having to prepare newsletter manually (internal)

Now, how do we prioritize these features based on value? Are features one and two equally important to build? What if we could determine the exact value for each feature? This can be determined using educated guesses! We can try to get all scientific about estimations, but that's exactly what they are—estimates. So why not estimate the value of a feature's impact on business outcomes?

Here's how to go about making a feature impact estimation: product managers, along with business stakeholders, estimate the impact of each feature on the Key Business Outcomes. They rate each feature on a scale of 0-10. The rating indicates the extent of the impact each feature can have on each invested business outcome. For instance, what impact will "existing buyers can enter a lucky draw to meet an artist of the month" have on engagement and generated revenue?

Stakeholders evaluate this based on how they envision the feature to be delivered. We could base our evaluation on data, insights from past user feedback, behavior, market trends, or even gut feeling! The key thing here is the conversations that happen at this stage. This is when stakeholders are actively discussing how to take a feature to market. They discuss the value that this feature can offer to the users. They are doing this without being constrained by the costs involved. So, let's say that stakeholders agree that we can predict that personalized, well-curated art catalogs would impact acquisitions at a 1 on the scale. Similarly, we can arrive at an estimated impact of this feature on engagement and generating revenue:

This is an indicative rating. There are no right or wrong values for the estimated impact. We will be able to validate if our estimated ratings met the mark only when we generate outcomes by meeting defined success criteria. We will see more about success criteria in Chapter 4, Plan for Success.

So, the preceding table is showing what the digital art gallery business thinks the estimated impact for "premium art buyer can sign up to receive a newsletter with details of upcoming art shows, artists and artworks" will be. They expect this idea to create a lot of engagement (ranked 7 for estimated impact on the scale of 0 to 10), and they expect it to have a little impact on generating revenue (ranked 3 for estimated impact on the scale of 0 to 10). Similarly, we can assess every feature against the business outcomes. The following is a representative illustration of the estimated impact per feature idea against each business outcome:

We're still one step away from arriving at a comparative value. We can now calculate weighted scores based on the invested amount (weight) and estimated impact scores. For instance, for feature one, the total value score would be (300x7) + (200x3) = 2700 points. Similarly, we can calculate the value for every feature and arrive at a table as follows:

Now, when we sort the results based on the total impact scores for each feature, we can figure out the most valuable feature. The most impactful features are the ones with the highest impact scores.