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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