Prioritization is the most challenging and impactful part of product management. Rock Pebble and Sand Product Management approach popularized by PayPal product leaders is an effective way to prioritize across product and portfolio.
Product management is a juggling act with constant influx of product ideas coupled with unplanned production issues. Every product team feels pressure and needs an effective way to prioritize. Rock, Pebble and Sand product management is a product management framework popularized by PayPal. It is also a part of the Responsive Portfolio Management for product prioritization, connecting OKRs with agile, often carried out in quarterly product planning/ roadmap alignment.
Here’s how this technique can help your teams to align the company and achieve your product OKRs effectively.
Rock, Pebbles, and Sand Explained
Imagine you are filling a jar with rocks, pebbles, and sand. Each piece represents the potential benefits and extent of effort required to pursue a product idea. The jar represents the available engineering capacity in a given time, e.g. a quarter.
The rocks represent the biggest potential impact and effort. For that reason, the rocks need to be prioritized first and added to the jar before anything else.
Next, add the pebbles; these have less strategic impact, but the impact can accumulate significantly.
The sand comes last and represents small effort tasks or bug fixes.
Let’s use some examples. Building a mobile app would amount to a rock, some UX improvements from the last big rock initiative would be pebbles, and a production bug reported by a customer is probably sand.
While stakeholders primarily focus on the rocks, all these elements are important to engineering teams who will have the context that protecting the shipping time for big rocks will trump those for pebbles or sand.
Putting the most important product first ensures it gets done with priority. This sequence also allows more pieces to fit into a fixed capacity jar.
The Evolution of Rocks, Pebbles, and Sand
David Sacks, the first COO of PayPal, founder of Yammer, and now founder of Craft Venture, has a well-written Medium post on the rocks, pebbles, and sand method practiced at PayPal since its early days. We have been fine-tuning this approach for over a decade both within PayPal and at small to mid-sized companies like Shutterfly, Bigcommerce, and Feedzai, where I led product portfolios.
We expanded the approach further with the concept of portfolio management, incorporating a “variable-sized” jar analogy, especially when prioritizing product initiatives and allocating engineering resources across teams.
Why Allocate Resources Using a Rocks, Pebbles, and Sand Portfolio Approach?
With the rocks, pebbles, and sand approach, when new ideas or requests come in, product leaders have a framework within which to categorize requests according to business outcome and the request’s contribution.
We use a variable jar approach because we have recognized that at any given time, a product team needs to support many goals competing for the same resources. For example, user acquisition, platform scalability, and new market expansion.
Prioritizing big rocks for these varies goals results in an apples to oranges comparison. Instead, we create “virtual jars” of various sizes representing the amount of resource allocation applicable to the product team’s goals. Then, the rocks fit as acquisition goals in the acquisition jar, and platform rocks in the platform jar, and so on.
Why are separate jars better? Because this enforces a level of accountability at the leadership level. Leaders define goals. Leaders must decide what resources should be applied to these goals. These decisions give their teams what they need to be innovative and create products with the essential resources.
The goals shift according to marketing and business conditions, and so should the number and the size of jars. For example, in Q1, there might be a 20% allocation to tech debt and 50% in acquisitions, whereas in Q3, there may be a 40% investment in tech and 20% in user acquisition because the user growth has strained the platform. Without the additional focus on platform improvements, we will lost users.
Transform With A Proven Practice
In the earlier days at PayPal, we proposed, evaluated, and prioritized rocks and used this information to create engineering budgets and headcount annually. As the pace of change accelerated, we transformed our product planning to a quarterly practice during our agile transformation. Ultimately, we rolled out our product portfolio management connecting annual vision and goals with quarterly milestones adjusting the portfolio allocation responsively. This practice allowed rapid product innovation while ensure the continued improvements of existing product experience and growth.
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