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Many feel like deer caught in headlights when first asked to assess opportunities at hand and prioritize ones to invest in. That was certainly my experience until I frequently engaged with it in my role as a Product Strategist.

I have been asked this quite a few times now: How do I systematically assess opportunities and make investments in the right ones? These queries came from new Product Strategists. However a few ago an old school friend of mine asked the same question, but in the context of another domain.

Outlined below is a foundational approach I start with that you can utilize. As you amass experience and consider industry-specific and organizational nuances, you can refine this methodology to suit your needs better.

The Steps:

Step 1: Rooted in your organization’s vision, enumerate the key priorities. Here are some typical priorities:

• Increase revenue: Boosting the company’s incoming money
• Improve margins: Enhancing the profitability percentage
• Reduce cost: Cutting unnecessary expenditures
• Reduce operational expense: Streamlining processes to save costs
• Improve customer experience: Enhancing user satisfaction
• Improve employee experience: Creating a better workplace
• Increase revenue funnel: Expanding potential sales opportunities
• Avoid opportunity cost: Sidestepping losses linked to missed opportunities
• Build a competitive edge: Establishing unique market advantages

For example, in your specific area of responsibility, you might zero in on the following priorities:

1. Increase revenue
2. Improve margins
3. Enhance customer experience
4. Build a competitive edge

Step 2: Recognize that not all priorities hold equal importance. Allocate weightage accordingly, using labels like Critical, High, Medium, and Low. Aim to adopt the 10-20-30-40 model, where no more than 10% of priorities are deemed critical, no more than 20% as high, and so forth. Avoid assigning weightage based solely on individual merits; this can skew your perspective. Prioritize based on comparative significance.

For instance, given your chosen priorities, the weightage might be:

• Increase revenue – Critical
• Increase revenue funnel – High
• Improve customer experience – Medium
• Build competitive edge – Low

Note: It’s acceptable to label multiple items as Low or Medium when dealing with a smaller set of priorities.

Step 3: Considering your organizational duties and your industry, catalog the risks associated with seizing an opportunity, especially if it fails to yield the intended value or returns. Here are some conventional risks:

• Opportunity and organizational mismatch
• Potential reputation damage
• Risk to current product lines
• Team reputation jeopardy
• Information security threats
• Financial investment loss

Step 4: Weigh these risks in line with the organization’s risk tolerance. Don’t assess in isolation; compare risks to one another. Apply the 10-20-30-40 framework as used in Step 2. If too many risks seem critical, seek guidance from senior leadership.

1. Opportunity and organizational mismatch – Low
2. Potential reputation damage – High
3. Information security threats – Critical
4. Financial investment loss – Low

Step 5: Organizations typically navigate opportunities in three phases:

1. Validation
2. Seizing the opportunity
3. Market domination

During the assessment, focus primarily on the Validation stage. Various methods to validate opportunities include:

• Market research
• Data-driven projections
• Business modeling
• MVP (Minimum Viable Product) to validate assumptions

Each approach entails some cost; strive to quantify it.

Step 6: Opportunities might not always present immediate value. Yet, you can project the potential value, referencing the priorities from Step 2.

Step 7: Examine each opportunity across these dimensions:

1. Determine the addressed priorities and assign appropriate weightage.
2. Identify potential risks and allocate the corresponding weightage.
3. Estimate the cost of validating the associated hypothesis.
4. Forecast the potential benefits to the organization.

Armed with this information, you’ll be well-equipped to evaluate opportunities, enabling informed decisions about which ventures to back and to what extent.

Scenario

You are a senior Product Strategist in a large enterprise. You work closely with an MD who runs a team of 500 people and manages 5 initiatives/systems. Two of these are the management of customer-facing products. One is a data platform and one is a Transformation Program.

Every six months, he solicits ideas from the team that will help the organization grow its business. He picks one or two ideas and invests in them from his discretionary budget. You have been asked to run this program in a systematic manner. Previously the MD used to do the privatization on his own. This meant that his method wasn’t clear to all and often confused his team on why he chose one idea over the other. Also, most of the time the decision used to get delayed as he was very busy, ending up being a bottleneck.

Applying Opportunity Prioritization Method

Step 1: Enumerate the key priorities:

1. Increase revenue
2. Increase revenue funnel
3. Enhance customer experience
4. Build a competitive edge

Step 2: Assign weightage

• Increase revenue – Critical (score of 5)
• Increase revenue funnel – High (score of 3)
• Enhance customer experience – Medium (score of 2)
• Build competitive edge – Low (score of 1)

Step 3: Enumerate possible risks

• Opportunity and organizational mismatch
• Potential reputation damage
• Risk to current product lines
• Team reputation jeopardy
• Information security threats
• Financial investment loss

Step 4: Assign weightage to applicable risks

1. Opportunity and organizational mismatch – Low (score of -1)
2. Potential reputation damage – High (score of -3)
3. Information security threats – Critical (score of -5)
4. Financial investment loss – Low (score of -1)

Step 5: List opportunities and costs for their validation

Step 6: Analyzing each opportunity against key priorities

Simple Approach

This will prioritize:

1. Collaborative Group Savings
2. Fitness & Finance Integration
3. Interactive Financial Workshops
4. Subscription-based Banking
5. Instant Cross-Border Payments

Deeper Approach

This will prioritize:

1. Social Payment Integration
2. Collaborative Group Savings
3. Instant Cross-Border Payments
4. Fitness & Finance Integration
5. UPI Integration

You will notice that the list of prioritized opportunities changes as now more nuanced analysis is done.

Step 7: Now if you consider the cost bucket, the picture may change still:

This will prioritize ‘Collaborative Group Savings’ over ‘Instant Cross-Border Payments’ as the cost of validating ‘Instant Cross-Border Payments’ is much higher.

Now, if you consider the risk bucket, the picture may change still:

Addressing the Risk score first and then the Cost bucket, will finally prioritize ‘Instant Cross-Border Payments’ over ‘Collaborative Group Savings’ as the risk is lower.

So now you have a systematic, transparent, re-configurable and business vision based method for opportunity prioritization!

1. Social Payment Integration
2. Instant Cross-Border Payments
3. Collaborative Group Savings
4. Fitness & Finance Integration
5. UPI Integration