The Value Bucket Model (VBM) prioritization method finds its origin in the same train of thought as WSJF and RICE.
It divides value with effort and ranks according to the highest outcome. The goal is to objectively value your initiatives and not
make relative assumptions (although you can use relative sizing with Fibonacci or t-shirt sizing).
You can have multiple value models in your organization since each department or group of teams will be managed by their own specific KPIs.
So, lets use these to determine value for each of them.
Value is a score based on the normalization to 1-5 for each KPI (or bucket) multiplied by the weight of the KPI.
The norm can be used as is or translated to the Fibonacci sequence (see example).
Our online tool uses the Fibonacci sequence for its calculations.
Effort is the number of iterations (in Scrum you would know these as Sprints) all required teams would need to finish the work multiplied by the
percentage of the team needed.
Let’s assume you define Value with Revenue, Cost reduction and Compliance.
Your main focus is on Revenue and Compliance, weighing them with a factor of 2 compared to Cost reduction.
Revenue and Cost reduction are financial metrics and are not that hard to set a norm for:
Norm 1-5 scale
Norm Fibonacci scale
You can set the actual value to whatever suits your situation.
An actual value that lies in between to scale values can be addressed in two ways: simply use the closest norm value or calculate it using the line between the 1 and 5 norms.
An actual value of $6,000,000 in the first way would become a 3. Calculating it using the line results in 3.76.
Using the closest norm method limits scoring higher actual values to 5.
So $20,000,000 would be a 5 while in the line calculation it would be 56.36, actually showing the real higher value it holds.
It is more complex to do, but does represent reality better. Value bucket software, like the the tool on this page or Taskstreamer, will do these calculations for you.
It is important that users working with the Value Bucket Model can think in terms of actual values and don't need to translate them to the norm each time. This is because it is closest to reality and something people can relate to.
Compliance can be a bit more tricky to make objective.
You should start out with a 1-5 scale and later on will think of what makes Compliance a factor of value?
It has a time factor since a new law will have a lead time you can use to become compliant.
The closer you get to the moment a new law becomes active where you need to do work for, the more valuable that work becomes, so you could set the norm table as:
Norm 1-5 scale
Norm Fibonacci scale
52 weeks to go
40 weeks to go
27 weeks to go
15 weeks to go
2 weeks to go
You could also see Compliance as the number of issues you find during an audit for example.
Use the KPI metric that fits best for you, is something you can measure and is feasible and your people can understand.
To determine the priority, the value is divided by Effort.
The definition of effort is the number of iterations (in Scrum you would know these as Sprints) all teams would need to finish the work (or the percentage of a team needed).
This has the benefit of having a time factor where a relative job size does not.
Asking for estimates in number of hours or days needed is asking for unnecessary complexity.
We should have learned by now these estimates are not something we can actually plan on.
But ask a team if they how many Sprints an initiative will take and are able to give a more realistic indication.
The VBM for an e-commerce department or company could look something like this:
Some additional notes
If your team does not use Scrum, thinking in iterations is probably not something you are custom to do.
This can help your team to better scope and oversee their work.
If an initiative takes more than 5 iterations (an iterations usually takes 2 to 4 weeks), you should try and split it.
It will help your team process the work better.
You can set a specific VBM for every department or group of teams you have (we call them Value Groups), prioritize the work accordingly and align with your strategic goals.
You are free to decide to use one KPI or even ten. As long as it fits your purpose.
This means different departments can use different VBMs, but they use the same rules: an objective measure to determine value and the same denominator effort to calculate priority.
Our online tool (as does Taskstreamer with even more options) also incorporates confidence levels in the calculation for more accuracy.
Calculate your VBM score with our online tool (it's free)
Create your model
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