Product Managers, Product Owners or Innovators are not to be envied. Any stakeholder usually have a strong opinion about what is most important for the product. In meetings to discuss those priorities, several stakeholders are usually pulling innovators, such as the product owners, between opinions of different persona. In the end they do not really know, what actually is the most important to achieve. They rather follow the most urging or even the loudest individual. Cost of Delay might a way out of this mysery.
In God we trust all others must bring data! — Edward J. Demming
As soon as we connect data to any of our decisions, stakeholders or bosses understand your priorities easily. I always suggest Innovators to connect their priorities with any form of feasible data.
The easiest metrics are also usually the metrics we call to be vanity. Reduced Churn, More Signups, Increased MRR, more website hits, etc – We misread those very easy. With those metrics, though, you would maybe not get all stakeholders on board. Stakeholders in top management positions have one common interest: How can we grow our business faster?
Return on Investment vs. cost of Delay
In the past, people were interested in the so called Return Of Investment. They were taking a risk by investing into a feature and then would see how much of this investment would return in profits. But this approach has one flaw: It only gives you exact information after the investment is already done.
Cost of Delay helps you to understand how much revenue you lose with every week you do not invest into a specific feature. If calculated correctly and congruent, it might be the ideal prioritisation technique. Leading Agile explains with nice examples, how to calculate Cost of Delay.
One of the most powerful ideas of Cost Of Delay is to match a potential generated value just with a perceived value of a story. It is a way of creating a priority based on what we assume and on real, feasible data.