prioritizing value beyond boundaries - scrum gathering bengaluru - natalie warnert

Prioritizing Value Beyond Boundaries

Natalie Warnert #sgblrJune 28, 2016

Natalie Warnert

• Agile Transformation Coach• MA, SPC, CSP, CSM, PSM• #WomenInAgile

Web: www.nataliewarnert.comTwitter: @nataliewarnert

Why is value measurement important to me?

What do the documents say?

• Agile Principles: – Our highest priority is to satisfy the customer through

early and continuous delivery of valuable software.

• Scrum Guide:– A framework within which people can address complex

adaptive problems, while productively and creatively delivering products of the highest possible value.

– The Product Owner is responsible for maximizing the value of the product and the work of the Development Team.

www.agilemanifesto.org, www.scrumguides.org

The fight for priority

• This is more valuable than that!

• Priority can look very different at different levels of the organization

• Portfolio• Program/Product• Team

Business Value Measurement

val·ue/ valy o/ˈ o͞

Verb

1.estimate the monetary worth of (something).“the feature was valued at $45,000”

Synonyms: evaluate, assess, estimate, appraise, price

www.google.com

Business Value Measurement

• Tangible• ROI (most common)– Net profit/cost of investment = ROI– OR… how much can we profit from this

investment (percentage)?

• Sales increase• Cost reduction• Net Present Value (NPV)

Business Value Measurement

• But how tangible is it?• Can we estimate “value” on stories? Groups

of stories? Non-functional requirements?• What is the relevant measure for the

business and the product?

• Who is our customer?• Who is our user?

Business Value Measurement –Cost of Delay

• Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement]

Business Value Measurement –Cost of Delay

• Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement]

• If we have an equal cost of delay pick the shortest job first

Feature Cost of Delay Duration

A $2 2

B $2 1

Business Value Measurement –Cost of Delay

• Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement]

• If we have an equal cost of delay pick the shortest job first

• If we have an equal duration pick highest CoDFeature Cost of Delay Duration

A $2 2

C $1 2

Business Value Measurement –Cost of Delay

• Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction/opportunity enablement]

• What if it’s not one or the other?

Feature Cost of Delay Duration

A $2 2

B $2 1

C $1 2

Business Value Measurement –Cost of Delay

• Cost of Delay – what is the cost of having NOT done this?

• Weighted shortest job first (WSJF) • Implementation and decision to use CD3 =

CoD/Duration

Feature Cost of Delay Duration CD3 = CoD/Duration

A $2 2 1

B $2 1 2

C $1 2 1/2

Business Value Measurement –Cost of Delay

• Cost of Delay – what is the cost of having NOT done this?

• Weighted shortest job first (WSJF) • Implementation and decision to use CD3 =

CoD/Duration

Feature Cost of Delay Duration CD3 = CoD/Duration

A $2 2 1

B $2 1 2

C $1 2 1/2

Activity – 7 minutes

• Prioritize the work items into a program roadmap based on tangible monetary measures only

• Left = lower value• Right = higher value

Lower Value Higher Value

Activity Debrief

• What was difficult about the activity?• What were the first few items in your

prioritization order? Last few?• How realistic is it to get everything done?• Which scope would likely get cut?• What was missing from the conversation

about priority and valuation?• Take a picture of your priority arrangement.

Business Value Management

• WSJF is important, but not as important as how we calculate it

Business Value Management

• WSJF is important, but not as important as how we calculate it

• Cost of Delay [value + urgency + risk reduction/opportunity enablement]– We forget components!

Business Value Management

• WSJF is important, but not as important as how we calculate it

• Cost of Delay [value + urgency + risk reduction/opportunity enablement]

• And duration…

Business Value Management

• WSJF is important, but not as important as how we calculate it

• Cost of Delay [value + urgency + risk reduction/opportunity enablement]

• And duration…

• But it’s an estimation at best

Business Value Management

• WSJF is important, but not as important as how we calculate it

• Cost of Delay [value + urgency + risk reduction/opportunity enablement]

• And duration…

• But it’s an estimation at best

• And when we estimate in a box (especially with money), we are more often than not WRONG

User Value Measurement

• But the end user does not care about value as a measure

User Value Measurement

• But the end user does not care about value as a measure

• User thinks of value as:

val·ue/ valy o/ˈ o͞

Noun

1. the regard that something is held to deserve; the importance, worth, or usefulness of something. “this product is of great value”

Synonyms: worth, usefulness, advantage, benefit, gain, good, help, merit

www.google.com

User Value Measurement

• As a…I want…so that…

User Value Measurement

• As a…I want…so that…

• As a customer/user/subscriber…• I want [certain functionality]

• So that I can do something that is valuable to me and gain satisfaction by doing it

User Value Measurement

• As a…I want…so that…

• As a customer/user/subscriber…• I want [certain functionality]

• So that I can do something that is valuable to me and gain satisfaction by doing it– Ease, time-saving– Unique/new/differentiating– NOT so that the company can make money off of me

• Intangible

User Value Measurement

• User cost of delay– What I NEED to do (basic/threshold)– What I WANT to do (performance)– What I haven’t thought to do yet (delight/excite)

User Value Measurement

• The user doesn’t always know what they want:– “If I had asked people what they wanted, they

would have said faster horses.” –Henry Ford

• The business does not always know either:– “People don't want a quarter-inch drill, they

want a quarter-inch hole.” – Theodore Levitt

User Value Measurement - Kano

Very Satisfied

Very Dissatisfied

Need FulfilledNeed Unfulfilled

User Value Measurement - Kano

Very Satisfied

Very Dissatisfied

Need FulfilledNeed Unfulfilled

Basic

User Value Measurement - Kano

Very Satisfied

Very Dissatisfied

Need FulfilledNeed Unfulfilled

Basic

Performance

User Value Measurement - Kano

Very Satisfied

Very Dissatisfied

Need FulfilledNeed Unfulfilled

Basic

Performance

Delight

User Value Measurement - Kano

Very Satisfied

Very Dissatisfied

Need FulfilledNeed Unfulfilled

Time

Basic

Performance

Delight

Activity 2 – 7 minutes

• Move feature cards ONLY vertically based on customer value factors• Discuss which buckets each feature could fit into based on what the customer

values

Lower Value Higher Value

Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

Activity 2 Debrief

Lower Value Higher Value

Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

Activity 2 Debrief

Lower Value Higher Value

Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

Activity 2 Debrief

Lower Value Higher Value

Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

Activity 2 Debrief

Lower Value Higher Value

Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

Activity 2 Debrief

Lower Value Higher Value

Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

What is missing?

User FeelingMoney

Run a business

Build the right thing

Find the right balance

User FeelingMoney

Run a business

Build the right thing

Money vs. Feeling

Very Satisfied

Very Dissatisfied

Need Unfulfilled Time

Basic

PerformanceDelight

Valuation = Money Value = FeelingVs.

Value

Cost

Money vs. Feeling

Very Satisfied

Very Dissatisfied

Need Unfulfilled Time

Basic

PerformanceDelight

Valuation = Money Value = FeelingVs.

Value

Cost

Portfolio

Money vs. Feeling

Very Satisfied

Very Dissatisfied

Need Unfulfilled Time

Basic

PerformanceDelight

Valuation = Money Value = FeelingVs.

Value

Cost

Portfolio Team

Money vs. Feeling

Very Satisfied

Very Dissatisfied

Need Unfulfilled Time

Basic

PerformanceDelight

Valuation = Money Value = FeelingVs.

Value

Cost

Portfolio TeamProgram (value stream)

What if my product does not align with monetary/user value?

• Switch out axes for other characteristics– Efficiency (transportation)– Compliance (government/legal)

• What else?

• Add a third dimension…

Why is value measurement important to me?

Wrap Up

• Value is both a verb and a noun (like Agile)• Think about making money and the user –

balance between importance• Development tier (level) can help influence

decisions

Questions? Thank you!

www.nataliewarnert.comTwitter: @nataliewarnert#sgblr

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