A prioritization matrix is a way to force rank opportunities according to two equally valid but conflicting criteria. Those which win out against both criteria should be selected for implementation.
It’s often used as a product backlog prioritization technique by leaders and PMs. By looking at the relative position of opportunities on the matrix, you can understand how to sequence (prioritize) them. It’s a simple visual way to create clarity.
A very common example of a prioritization matrix is a Value / Effort matrix for quick prioritization of product backlog items.
Other common examples of prioritization matrices include Time vs Money, or Risk vs Impact.
A prioritization matrix is best understood as a powerful communication tool. As such it’s an effective model to align workshops around, or to use to communicate complex trade offs in an elegant framework.
In this guide we’ll take you through the prioritization matrix, origins, common examples and how to make one.
We’ll also share a free prioritization matrix template, flashcards and how to run a workshop using a prioritization matrix.
What is a prioritization matrix
Intro to 2 x 2 prioritization matrix
A 2 x 2 prioritization matrix looks like this:
Or like this:
It doesn’t really matter which version you pick (central vs non central hand axes). It’s purely a matter of preference.
The goal is to identify the most attractive opportunities or projects by scoring them according to 2 inputs. This determines their attractiveness as projects to pursue.
The 2 x 2 prioritization matrix framework is extremely adaptable. You can use it to score all sorts of types of things according to different criteria.
For example
There’s a variant of the 2 x 2 prioritization matrix called the Eisenhower prioritization matrix, which allows you to score your to do list – and figure out what to get done first.
The inputs for this one are Urgent, and Important. You want to do the things which are most urgent, and most important first. The things which are not urgent and not important you can either drop or delegate.
For example
You’re scoring opportunities using the Value Effort prioritization matrix.
You’re looking to prioritize opportunities which are low effort, and high value in the first instance. Things that are low value and high effort should be dropped.
Skip down to a detailed explanation of the Value / Effort matrix here.
3 x 3 prioritization matrix
Some people refer to 3 x 3 prioritization matrices – these aren’t actually cubes! All these are are a 2 x 2 matrix displayed like this:
People sometimes use this model to make it easier to place items on the matrix and get more granularity – but the reality is that it’s the same thing.
Free prioritization template in excel and flashcards
Get the free Hustle Badger prioritization template here
Get the Hustle Badger prioritization flashcards here
Common prioritization matrix examples
Examples of how to use a prioritization matrix:
- As a workshop tool to align stakeholders on which inputs really matter and why they think things are important
- As a way to prioritize further discovery efforts using frameworks such as RICE based on initial feedback
- As an elegant presentation tool for senior stakeholders to explain in a fast, visual way what is being considered and how you’re evaluating it
- As a series of different lenses, or frameworks, to look at a problem or opportunity space
Examples of how not to use a prioritization matrix:
- As a prioritization mechanism without detailed quantitative and qualitative user research behind it
- For complex decisions where more than 2 inputs have to be taken into account
- Without plotting the inputs according to numerical scores: guesstimates lead to wrong outcomes
The following types of prioritization matrix are very common: you may well have come across them before:
- Value / Effort: a loose proxy for a cost / benefit calculation, this matrix is quite commonly used as a workshop tool between product managers and engineers
- Important / Urgent: the Eisenhower prioritization matrix is a common tool for executives to manage their to do lists
- Impact / urgency: the Eisenhower prioritization matrix applied to business opportunities. Particularly effective in fast growing businesses where there’s a host of equally valuable opportunities.
- Cash flow / market share: applying investment payback logic to investments of time or capital. The BCG matrix.
- Risk (probability something might happen) / Impact: known as the risk matrix, this is a mental model for the major risks you might face, plus the probability that they wipe out your business. Especially useful in uncertain environments and highly regulated industries.
- Time / Money: there’s a concept called the time value of money, where having a $1 today is worth more than having a $1 tomorrow, due to inflation, risk and so on. While value, effort are all important inputs, so are payback cycles and how much ultimately it will cost.
One really helpful way to think about all these different types of matrix is as different lenses or models to look at a problem or opportunity space.
There’s no 1 matrix to rule them all, instead there are lots of different angles to examine.
You can think of plotting opportunities on these different axes as a type of extended feasibility exercise, where you take a 360 look at the opportunity space.
“I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent.” – Dwight D. Eisenhower, 34th USA President
Let’s deepdive the Value / Effort prioritization matrix to bring this to life, and explore the others in more detail.
Value / Effort prioritization matrix
The Value / Effort matrix is a commonly used 2 x 2 prioritization matrix. One axis represents Value from low to high and the other represents Effort from low to high.
Users of this method estimate future value, and effort to deliver, and then place initiatives or projects on the matrix according to the value / effort calculation. Things can be:
- Low value, high effort: Do not do
- Low value, low effort: Little value in doing, delay until no other options
- High value, low effort: Execute soon as quick wins
- High value, high effort: Check strategy alignment and make a plan to execute
Value Effort Prioritization Matrix template
It is popular as a basic prioritization tool, but it has significant limitations if not used carefully.
Bad examples of the Value / Effort prioritization matrix
Bad examples of the Value / Effort prioritization matrix:
- Use guesstimates: unless you and your team are very very good at guessing, any time you estimate value or effort without investigating and calculating according to an agreed methodology, the outputs will be off. In addition, it opens the way to different people using different baselines, having different concepts of value or effort, or bias.
- Are simplistic: as we’ve covered above, in order for a 2 x 2 matrix to be truly mutually exclusive, and collectively exhaustive, ideally the inputs on the axes are complex, rather than simple inputs
- Apply value / effort to topics where value / effort is not the right question to answer
- Are over-used: it can be tempting to apply this prioritization matrix as a well known cookie cutter tool – but as we have shared, often other inputs are stronger.
Good examples of the Value / Effort prioritization matrix
If calculating value it is better to do a proper impact calculation, taking into account how many people it will reach, and the level of confidence they have in their supposition, for example using RICE.
We therefore recommend using RICE as a prioritization tool over this framework, but there are times when it can make sense and add value:
- As a quick sorting method to understand where to prioritize more discovery or to focus impact calculation, for example as a way to do wrap ups in ideation sessions
- When senior stakeholders with a low attention to detail want to see a simple visual aid to planning and decision making: but here the onus must be on you to do the real work behind making it accurate via value and effort calculations. Particularly useful for SLT or Board meetings
If you’re using it, here are our recommendations
- Use it as a way to sense check the pulse: a rough sorting mechanism to understand where to focus your efforts for RICE calculations. See it as a first, not an end stage in your prioritization process
- If you are presenting as a finished prioritisation scheme: have a way to calculate value and effort and then plot inputs: don’t guesstimate. Value could be an aggregation of Reach, Impact and Confidence, calculated according to the RICE methodology, and Effort could be days work / sprint / person month estimations; plotted on the matrix.
- Really sense check if this is the best tool for your audience: while this framework might feel intuitive and easy, consider whether as a group you’d reach better outcomes using another tool
Impact / Urgency matrix
Particularly good in fast growing businesses with lots of competing opportunities with similar impact, reach and effort scores, the impact / urgency matrix can be an extremely effective workshop tool with senior stakeholders to understand their priorities and focus.
There will always be times where a very senior stakeholder feels the urgency is not where they would like it to be regarding what they perceive as a high impact opportunity. Founders may wish to pursue a strategy that they have not yet outlined to the team.
This matrix is a great stakeholder management tool to flush those preferences out into the open and manage up effectively.
Impact Urgency Prioritization Matrix Template
Risk / impact prioritization matrix
This type of matrix evaluates
- The risk or probability that something might happen
- The impact it would have on your business
This type of model can be particularly useful to suss out where there might be genuine risk to your core business from competitors or from other external factors, such as legislation.
Conversely it can be a useful workshop tool in scenarios where internal stakeholders are insisting on x y z feature – because competitors might do it. This type of process can help them see that the probability of that particular feature coming to market is low..
It can also be critical as an additional input when prioritizing in highly regulated industries, such as fintech or healthtech. It’s also really critical when you need to prioritize something which results in no monetary value for the business: for example, implementing a cookie banner.
Risk Prioritization Matrix Template
Time / Money prioritization matrix
The time / money matrix is especially important when you’re managing cash flow.
Let’s say you have two different opportunities, one B2C, one B2B.
Both are of about the same value, effort, importance, deliver the same market share, and would take the same amount of time.
You would select the B2C opportunity over the B2B one because B2C customers pay upfront to use the product, while B2B customers pay on invoice, c. 45-60 days after invoice receipt.
There are lots of times where getting cash into a business can be useful: start up cash runways are often under pressure. It’s particularly key in early stage start ups.
Time Money Prioritization Matrix Template
When to use a prioritization matrix
They’re most useful for
- Shaping thought models: articulating key trade offs, and getting people to zero in on the two inputs they really care about
- Stakeholder engagement tools: they’re extremely useful when you are looking to read the room: what does the CEO think is most important? Are the engineers going to get sticky? Does that customer really want that? Treat them as a powerful method to gauge which way the wind is blowing.
- Sorting priorities where strategic objectives and trade offs are already well understood: you don’t need to use complex prioritization tools where there’s a clear strategy and everyone in the room ‘knows what to do’. In these situations a simple sorting as a group can be advantageous and time efficient.
- Simple intuitive displays of complex topics: especially effective for slides for senior management, it helps to think of them as an elegant way to display complex topics.
They’re most dangerous when:
- Used reductively: many topics are complex, and require more than two inputs to get to the right answer. Even if you’re using a 2 x 2 prioritization matrix to display opportunities visually, you should have invested the time to understand the true priority of different inputs according to a more refined logic.
- Estimates are seen as a source of truth: it’s absolutely fine to do some rough estimates to understand where to focus your energy for more analysis, effort or exploration. It’s not ok to skip that step in favor of swift estimates.
- Used instead of a stronger prioritization methodology: prioritization methodologies like RICE give significantly more robust outputs.
- Used in a vacuum: if you don’t have a clear strategy, if you haven’t done discovery, if you don’t have a solid way to calculate impact, it quickly becomes based on people’s biases and feelings.
Our strong recommendation is to
- Treat these as powerful workshop tools: to understand stakeholder priorities and needs, to understand where to invest the time in more robust prioritization efforts (such as RICE)
- Use these as powerful visual aids to demonstrate where you and your team are focusing and why – again, with robust calculations behind them
- Understand how to make them really powerful: a 2 x 2 matrix can be deceptively simple, devilishly smart. It all comes down to how well you define the problem statement, how deep your thinking is behind which are the 2 inputs which best articulate the problem statement trade offs, and how well you articulate and stack rank your hypotheses based on that first principle, mutually exhaustive, collectively exhaustive logic.
- Not to use these as your sole prioritization methodology: things are often more complex than 2 estimated inputs. They’re a great workshop tool, they’re a great visual aid, but they shouldn’t be where you start, and the only system you use.
- Pause and think if you’re having trouble prioritizing: if everyone in the room has a different idea of which inputs are most important, and a different idea of what should be at in the top left hand corner, it means everyone has a different idea of what the strategy and the vision is. This is a strong signal for a time out, an articulation of the goals and a regroup once there’s some alignment.
Origins of the prioritization matrix
The original example of a prioritization matrix came from the management consulting firm Boston Consulting Group (BCG).
The BCG Growth Share Matrix is a method to help businesses manage their yield and investment strategies across different business lines for optimum company value.
“The growth share matrix was built on the logic that market leadership results in sustainable superior returns. Ultimately, the market leader obtains a self-reinforcing cost advantage that competitors find difficult to replicate. These high growth rates then signal which markets have the most growth potential. The matrix reveals two factors that companies should consider when deciding where to invest—company competitiveness, and market attractiveness—with relative market share and growth rate as the underlying drivers of these factors.” – What is the Growth Share Matrix, BCG
Cash cow: Low Growth, High Market Share: throws off a lot of cash, milk that cash to invest in new businesses
Star: High Growth, High Market Share: invest in these to make them future cash cows
Question Mark: High Growth, Low Market Share: invest or divest these, depending on their potential to become future stars
Dogs: Low Market Share, Low Growth: Shut down, or sell
The BCG matrix can be a helpful framework for when you need to:
- Decide which markets to prioritize: when working across multiple geographies, with many asks from different markets, this can be one way to to prioritize market specific asks
- Allocate resources across different business lines: the McKinsey Horizons model is another of these mental models, but the BCG matrix can also assist when you’re considering whether to work on older business lines versus new ones.
How to create a prioritization matrix
Selecting axes
You can assign any input you like to each axis, but in order to make your matrix effective it helps to ensure that they are:
- Mutually exclusive: the axes should trade off two equally valid but entirely different imperatives. If you score opportunities by Value and Revenue, you’re essentially scoring everything according to one input.
- Of equal magnitude and importance: the two axes should have equal weight. A good example of two inputs with equal magnitude and importance are Value and Risk.
- Meaningful and important to your organization: most companies have a topline goal which is aligned to a key result. Prioritization is as much a politic as a science. Include that metric in your prioritization, or ensure there is alignment about using a different metric.
- Defined: words can mean different things to different people. Spell out whether Value is monetary value, customer value and how it’s measured: net cash, NPS, etc.
- Inputs you can assign quantitative values to: the best prioritization matrices are a graph, plotted according to relative numerical inputs.
Defining action to take depending on quadrant
Any matrix will have inputs which are
- High / Low
- Low / Low
- Low / High
- High / High
It’s key to define (and write down) what action you will take depending on the place on the matrix.
Ideally write it on the matrix so that when you are plotting things, either solo or in a workshop, that you can quickly see whether that action feels intuitively correct for that input.
If something looks funky, go back to first principles and consider whether your axes, scoring or baselines are correct.
Ensuring stakeholders sign up
Prioritization is as much about understanding your audience as it is about the science of how you prioritize and frame your criteria.
Don’t omit to
- Socialize your choice of axes with your stakeholders
- Ensure stakeholder participation in the process to ensure buy in
- Prepare: make sure you can confidently ground your prioritization in data and reasoning that seems fair and that they can accept
- Involve stakeholders iteratively in the process, and avoid a big bang announcement
In workshops it’s fine to place things on the matrix according to gut feel and feedback from the room. Higher, lower, bit to the right – this is all fine.
But when you’re working up a prioritization matrix for presentation, there should be an excel spreadsheet, with a score per input and the points plotted on a graph. You should then overlay the matrix onto the graph.
When calculating your inputs you have several options:
- Calculate future possible output numbers: for example, when calculating Value, you might determine that Value = Revenue, and calculate the future possible revenue impact a given opportunity might create.
- Estimate an input according to a logarithmic scale (0.1, 1, 10, 100) which indicates order of magnitude: for example, if something is very urgent, you might score it 100, versus something which is not very urgent (score 1), and something which should be done in the next 6 months might be scored 10.
We advise against simple scales like (Value is High, score 3, value is low, score 1), because these don’t represent different orders of magnitude.
Here’s an example where we’ve plotted 3 different opportunities according to a Value score, an Effort score, and represented the relative revenue size of the opportunities as the bubble size on the chart, calculated via simple impact modeling.
Example prioritization matrix template here: Google Docs
Tips and tricks when creating a prioritization matrix
While there are many off the shelf examples of prioritization matrices, a common mistake is to reach for a well known model (i.e. Value / Effort) without doing the upfront thinking as to whether value, and effort, are the right questions to be asking about your problem statement.
Always go back to first principles and ask: Is value or effort the right question to be asking here? Are there other inputs which matter more?
Remember that there is no right or wrong matrix. You’re trying to find the best possible visualization of your problem statement.
If you’re not sure:
- Try out some different inputs: see what insights you gain into what is important from placing opportunities on different dimensions
- Use a different prioritization methodology as your starting point: We anyway recommend using RICE or a similarly multi-dimensional prioritization framework to validate your inputs. If the matrix approach isn’t working, start with RICE. The process of calculating RICE will help you work through the problem across various different dimensions.
How to run a prioritization matrix workshop
“Individuals and interactions over processes and tools” – the Agile manifesto
There are times when running a session using a prioritization matrix can be a valuable tool to:
- Understand stakeholder priorities: by having people explain why they think an idea has such high potential you gain more information about strategic priorities
- Help stakeholders understand the team perspective: inevitably senior stakeholders and the team will diverge at some point. This allows the team to share valuable insights and information with senior management who are usually more removed from the front line.
- Start discovery: sorting in this way via workshops allows many stakeholders to share what they know about the topic
- Gain quick information from specialists: a directional prioritization can help refine opportunities later developed further via a RICE sorting
Preparation
For your opportunity area you should have collected and refined a list of opportunities. Ideally they are
- Collated according to opportunity area (i.e. monetization opportunities)
- They are mutually exclusive
- As far as possible they are similar sized pieces of work: don’t use different scales when it comes to tasks, try to describe them on similar scales
- The list contains context i.e.
- Nominated by xx stakeholder
- Rationale for doing the work / hypothesis about doing the work
- Any doc links
- Any risks i.e. GDPR compliance is noted
You should also have scoped some prioritization axes options in advance, and socialized them with stakeholders.
Ideally you will go into your workshop with at least 2 different types of prioritization criteria, in order to look at problems through different lenses and engage your stakeholders in the process, uncovering their needs and perspectives along the way.
Your plan should be to run min 2 group scenarios to help the group think through the problem in the round and agree where to invest more discovery time.
Running the workshop
Setting ground rules
Start the workshop by explaining:
- The purpose: this is to align the group on what to do and when, and to create clarity around stakeholder priorities, plus share relevant information to allow the group to reach a consensus
- The need for respectful participation: take turns, allow others to speak, act non-hierarchically for best results
- The need to be transparent and explain your why: you’ll be asking folks to score different options and it’s important that they explain their reasoning to others
- Share with them the matrixes you worked up in advance, and explain how they work & what you need the group to do
- Share that this is a process: based on outputs from this workshop, you will invest further time in refining a prioritized opportunity list (with calculations) and share back. It’s key not to let stakeholders walk out of the room thinking the thing at the top right is happening tomorrow.
Running scoring cycles
In order for this to be most effective you want to avoid groupthink. Therefore run your cycles in the following order:
- Share your first matrix, with the trade offs, and the actions you will take based on quadrant placement with the group
- Share your definitions of the two axes: if Value is an input on an axis, explain the definition of Value that you would like the group to score with
- Share your list of opportunities: and ask if it’s complete, or other things need to be added
- Give the group 10-15 mins to individually score the opportunities in private, and send you their scores
- Once the cycle is complete, copy paste people’s individual scores into a spreadsheet, with an column per person, and call on them one by one as you work through the opportunities to explain their scoring
- Get the group to agree on a consensus score per opportunity and enter it in the spreadsheet
- Plot the opportunities on the matrix according to the group’s score and throw it up on the wall: ask if it looks right
- Iterate until everyone aligns on the priority order
- Lock the matrix, and go again with a different matrix with different axes
Concluding the workshop
At the end, ask people to share their reflections and what they have uncovered through the process. What inputs matter the most to them? Do they think you’ve missed a key prioritization input? Have they any general reflections?
You should capture this, and take away your populated matrixes to work up a prioritized list of opportunities.
You can use RICE, or you might find that your organization wants to use variants, i.e. ‘Can we add urgency to RICE? Can we add risk as an input?’.
Take that into account and use those inputs to derive a final prioritization score and a stack ranked list of opportunities to inform your backlog.
Wrap up on prioritization matrix best practices
A 2 x 2 prioritization matrix can be an extremely useful tool. It’s especially useful as a thought model to look at problems from different angles, with different lenses. Its simplicity makes it a powerful communication tool, meaning there are many applications for using it when it comes to stakeholder communication and workshops to align groups.
However it does come with risks. It’s commonly used as the only prioritization mechanism. This is not great. It’s hard to make choices based on only 2 pieces of information. There are lots of other backlog prioritization techniques you can use, and depending on context, they may be more effective.
Don’t use it without considering if it’s the right tool for the occasion. It can also help to familiarize yourself with other product backlog prioritization techniques, such as RICE to ensure you have a robust process to fall back on.
Hustle Badger Resources
Other Resources
FAQs
What is a prioritization matrix?
A prioritization matrix is a way to force rank opportunities according to two equally valid but conflicting criteria. Those which win out against both criteria should be selected for implementation. It’s an elegant visual way to communicate complex trade offs in a way that can be easily understood.
How to use a prioritization matrix to evaluate projects?
A prioritization matrix is best understood as a powerful communication tool. As such it’s effective as a method to evaluate opportunity spaces through different lenses, and to communicate different mental models to stakeholders.
What are the advantages of a prioritization matrix?
The advantages of a prioritization matrix are the simple, visual way in which it communicates complex information. By simplifying the display of data into an intuitive diagram users can quickly grasp both complex opportunity lists and the decision making process behind sequencing of execution.
What are the two axes on a prioritization matrix?
You can select any two axes you want to prioritize opportunities against. Common examples include: Value vs Effort, Impact vs Urgency, Cash flow vs Market Share, Risk vs Impact and Time vs Money. In selecting your criteria for each axis you should ensure that they are equally important, and mutually exclusive.
