Value vs. Risk Model

The classic way to prioritize with Risk as a prioritization factor

Pavel avatar
Written by Pavel
Updated over a week ago

Comparing the Value of what is to be done to some other measure of tradeoff is the canonical way of prioritization.  Typically the measure that is compared is Cost (that is described in the Value vs. Cost chart-method of determining priorities).

However, there is a Mike Cohn's point of view about considering Risk as a prioritization factor. His approach can be really valuable for new products and initiatives.

Value vs. Risk: what is it about?

You score your product features in two dimensions: Value and Risk. 

There is no way to estimate Value, you may just use one of the other techniques or approaches. However, there are multiple kinds to estimate Risk, for example:  

  • Schedule risk - this cannot be realized by the time we need it.

  • Cost risk - this may cost more to run than what the business case allows.

  • Functionality risk - we are not able to do this.

A high-risk and high-value: what should be done first? 

From one point of view, if you avoid risky items and go for high-value first, you may develop a large part of the product before hitting a major roadblock.

From another perspective, if you are focused on working on high-risk items first, you may end up doing unnecessary work on features that turned out to be less valuable.

The main idea of the model is to look for a balanced approach, going for 

  • high-risk/high-value first

  • low-risk/high-value second

  • and finally, low-risk/low-value 

High-risk/Low-value items are best avoided.

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