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

http://www.nataliewarnert.com/

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

http://www.agilemanifesto.org/

http://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


• 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)


• 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]



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

Feature Cost of Delay Duration

A $2 2

B $2 1



• 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


• 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


• 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


• 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



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



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

• And duration…




• And duration…

• But it’s an estimation at best




• 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


• 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


• 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



• 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 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)


• 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


Very Satisfied

Very Dissatisfied


Basic


Very Satisfied

Very Dissatisfied


Basic

Performance


Very Satisfied

Very Dissatisfied


Basic

Performance

Delight


Very Satisfied

Very Dissatisfied


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


Delight: Don’t know I want

Performance: I WANT

Basic: I NEED

Activity 2 Debrief



Performance: I WANT

Basic: I NEED

Activity 2 Debrief



Performance: I WANT

Basic: I NEED

Activity 2 Debrief



Performance: I WANT

Basic: I NEED

Activity 2 Debrief



Performance: I WANT

Basic: I NEED

Activity 2 Debrief



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


Basic

PerformanceDelight


Value

Cost

Portfolio

Money vs. Feeling

Very Satisfied

Very Dissatisfied


Basic

PerformanceDelight


Value

Cost

Portfolio Team

Money vs. Feeling

Very Satisfied

Very Dissatisfied


Basic

PerformanceDelight


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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Prioritizing Value Beyond Boundaries - Scrum Gathering Bengaluru - Natalie Warnert