How to make good tradeoffs
Tradeoffs are the heart of a good strategy. Despite our desire to have our cake and it too, building products requires making opinionated choices on how to allocate scarce resources. High performing teams make these decisions rigorously. When evaluating opportunities, they don’t say “yes” or “no” without due diligence. Nothing is free, yet with enough creativity, nothing is impossible, either.
Tl;dr on how to make effective tradeoffs:
Identify the options. Get creative in identifying all possible routes. Hold nothing sacred, and accept no constraints as fixed.
Illuminate & rank the criteria. The most common criteria are maximizing impact (metric, strategic, and comms & marketing), adherence to your principles, precedent, and minimizing cost (short-term, long-term, and risk).
Evaluate & make a recommendation. Create a color-coded scorecard that evaluates each option according to your criteria. Simplify before you socialize. Always, always, always make a recommendation. Then, invite debate but ensure you do make a decision.
Step 1: Identify the Options
To begin, describe the core decision you have to make. What motivated you to tee up a tradeoff in the first place? Often, that will look like: Should we build A, or should we build B? Then, you flex your creativity:
Identify the third options. Could you do some of A, and some of B? Reflect on what it would take do both A and B, or build one now and the other later. Maybe there’s a completely different option C. Consider brainstorming with your team to ensure you exhaust possibilities. Ensure the options are as specific as possible for accurate vetting and clarity in your path forward.
Hold nothing sacred, and accept no constraints as fixed.
Define your ideal outcome, and reflect on what it would take to make it happen. Then, dial each constraint up or down: What would you do with more or less time? people? money? What would it mean to pursue more or less scope? tolerate worse or demand higher quality?
If you find yourself saying, “We have to pick between two options, because we don’t have enough time to do both,” recognize you’ve implicitly made the tradeoff decision just there by fixing your deadline. If you find yourself saying, “We couldn’t build A because we don’t have enough people to do it,” recognize you’ve assumed that increasing the number of people is off the table. Sometimes, neither is the case, and articulating these options might persuade your leadership to unlock resourcing.
Step 2: Illuminate & Rank Criteria
Next, clarify your decision criteria.
It can be tempting to simply list out pros and cons of options. In some cases, this is straightforward. Many tradeoffs can be simplistically solved by weighing ROI (time to implement vs. metric impact), but explicating a decision framework enables nuance. Here are the most common criteria:
Maximize Impact
Metric Impact. One of the main reasons we have goal metrics is to dictate prioritization. If you have a good metric, forecast the metric value each option will deliver.
Strategic Impact. Metrics don’t capture everything, and some options will advance your team’s strategic aims. As part of this, consider how users will respond to various paths; for example, certain strategies may churn the user experience in a way not fully realized by your metrics. There may also be more learning value imbued in certain options that will help you make better decisions down the road.
Comms & Marketing Impact. Finally, you should understand any PR value or risk in supporting your comms goals or exacerbating risks in areas like privacy, integrity, and more.
Adhere to Your Principles. Grounding decisions in principle creates more coherent products. The best principles are enduring, comprehensive, and opinionated. (Crystalizing opinionated principles is useful specifically because it can help resolve tradeoffs.) If any options violate your principles, that’s a clear cost; sometimes a principle violation may be enough to strike an option altogether. If you find your team debating principles locally for each decision and project, it’s a sign you should formalize them.
Consider Precedent. The decisions you make now inform decisions later. Sometimes this tips the scale from a short-term, myopic approach to one that’s enduring. Pay particular mind to decisions that are irreversible: “one-way doors” are cause to scrutinize decisions meticulously.
Minimize Cost.
Short-Term Cost. The cost of an option is typically how long it’ll take to get it done. Scope the number of person-days needed (e.g. “x engineering days”), as well as whether elements of the implementation timeline can be parallelized or must be pursued sequentially. In some cases, there are other costs ($$$) to represent, too.
Long-Term Debt. Beyond the immediate cost, options may induce long-term technical or design cost. The paths that do something the “right” way are preferred, but urgency may demand cutting corners.
Risk. You’ll also want to understand the degree of uncertainty. For example, option A may probably be ~5 days, but could be 20, whereas option B might definitely take <10 days. How much is risk a factor?
Not all of these criteria are created equal. Record how important each is, must have vs. nice to have, hard vs. soft constraint, and stack rank if possible.
Step 3: Evaluate & Make a Recommendation
The last step is to determine your recommendation and align on the path forward. If your options are specific and criteria clear, the evaluation should be straightforward.
Create a scorecard. Determine how each option scores on each criterion. Like with the options themselves, ensure the implications for all criteria are crisp. For example, if you say you’ll need to deprioritize something else you’re building, identify what that is and exactly what “deprioritized” (delayed? descoped? scrapped altogether?) means. Color coding makes your evaluation easy to parse.
Simplify before you share. As you socialize your recommendation, distill complex topics. Consolidate the many options you initially explored into the core ones worth serious consideration (and punt the “non-options” to the Appendix). Pro tip: Number and title each option for easy reference.
Always, always, always make a recommendation. The recommendation is the most important detail, but ironically is often left out. You possess the deepest context, and it’s your job to have an opinion.
Invite debate... When you do share, encourage your team, peers, and leadership to discuss the decision. Critically, when others disagree, elucidate what it is they’re challenging. Do they take issue with the criteria? The importance of the criteria? Or what “good” means for each? If you’re not clear on the root of the disagreement, you’ll talk past each other and swirl with frustration.
...and make a decision or escalate. Preference for consensus means alignment may prove evasive, but even the most vigorous debate must come to an end. Indecision is a decision itself (and typically the worst outcome of all). In these cases, call out that fact and urge others to disagree and commit. And if you can’t align internally, escalate as needed.