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Prioritizing Value
Beyond Boundaries
Natalie Warnert #sgblr
June 28, 2016
Natalie Warnert
• Agile Transformation Coach
• MA, SPC, CSP, CSM, PSM
• #WomenInAgile
Web: www.nataliewarnert.com
Twitter: @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
/ˈvalyo͞o/
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 CoD
Feature 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
/ˈvalyo͞o/
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
Feeling
Money
Run a business
Build the right
thing
Find the right balance
User
Feeling
Money
Run a business
Build the right
thing
Money vs. Feeling
Very
Satisfied
Very
Dissatisfied
Need
Unfulfilled Time
Basic
Performance
Delight
Valuation = Money Value = FeelingVs.
Value
Cost
Money vs. Feeling
Very
Satisfied
Very
Dissatisfied
Need
Unfulfilled Time
Basic
Performance
Delight
Valuation = Money Value = FeelingVs.
Value
Cost
Money vs. Feeling
Very
Satisfied
Very
Dissatisfied
Need
Unfulfilled Time
Basic
Performance
Delight
Valuation = Money Value = FeelingVs.
Value
Cost
Money vs. Feeling
Very
Satisfied
Very
Dissatisfied
Need
Unfulfilled Time
Basic
Performance
Delight
Valuation = Money Value = FeelingVs.
Value
Cost
Program (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.com
Twitter: @nataliewarnert
#sgblr
Please fill out feedback for the session on the
post-it notes and leave for me

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Prioritizing Value Beyond Boundaries - Scrum Gathering Bengaluru - Natalie Warnert

  • 1. Prioritizing Value Beyond Boundaries Natalie Warnert #sgblr June 28, 2016
  • 2. Natalie Warnert • Agile Transformation Coach • MA, SPC, CSP, CSM, PSM • #WomenInAgile Web: www.nataliewarnert.com Twitter: @nataliewarnert
  • 3. Why is value measurement important to me?
  • 4. 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
  • 5. 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
  • 6. Business Value Measurement val·ue /ˈvalyo͞o/ Verb 1.estimate the monetary worth of (something). “the feature was valued at $45,000” Synonyms: evaluate, assess, estimate, appraise, price www.google.com
  • 7. 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)
  • 8. 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?
  • 9. Business Value Measurement –Cost of Delay • Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement]
  • 10. 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
  • 11. 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 CoD Feature Cost of Delay Duration A $2 2 C $1 2
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. 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
  • 16. 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.
  • 17. Business Value Management • WSJF is important, but not as important as how we calculate it
  • 18. 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!
  • 19. 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…
  • 20. 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
  • 21. 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
  • 22. User Value Measurement • But the end user does not care about value as a measure
  • 23. User Value Measurement • But the end user does not care about value as a measure • User thinks of value as: val·ue /ˈvalyo͞o/ 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
  • 24. User Value Measurement • As a…I want…so that…
  • 25. 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
  • 26. 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
  • 27. 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)
  • 28. 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
  • 29. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled
  • 30. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic
  • 31. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic Performance
  • 32. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic Performance Delight
  • 33. User Value Measurement - Kano Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Time Basic Performance Delight
  • 34. 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
  • 35. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  • 36. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  • 37. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  • 38. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  • 39. Activity 2 Debrief Lower Value Higher Value Delight: Don’t know I want Performance: I WANT Basic: I NEED
  • 40. What is missing? User Feeling Money Run a business Build the right thing
  • 41. Find the right balance User Feeling Money Run a business Build the right thing
  • 42. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost
  • 43. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost
  • 44. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost
  • 45. Money vs. Feeling Very Satisfied Very Dissatisfied Need Unfulfilled Time Basic Performance Delight Valuation = Money Value = FeelingVs. Value Cost Program (value stream)
  • 46. 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…
  • 47. Why is value measurement important to me?
  • 48. 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
  • 49. Questions? Thank you! www.nataliewarnert.com Twitter: @nataliewarnert #sgblr Please fill out feedback for the session on the post-it notes and leave for me

Editor's Notes

  1. Prevent crashes Limited resources of time and money. -Has anyone experienced this type of thing Stability, security, and flashiness. We work the entire year to build up the site and then at the busiest time turn off a lot of the new functionality to improve performance and prevent issues. Ended up with a list of 30 critical defects and had to choose which ones we would be allowed to fix and get into the final builds of the freeze (which were pushed off a few extra days). At that point, how do we justify the value? defects differently than we looked at new functionality in general. So we looked at what was important for the freeze – security, stability, executive investment/interest, moron factor (spelling error on cart page)…this was a new way to look at what NEEDS to be done – why can’t it expand to program level roadmaps? Is it always about dollars earned? Dollars saved? No – there are many other things to consider…
  2. Finite resources = conflict “Something happens” – exec pet project There are different goals and motivations driving what should be “one” strategy, but it never is a single strategy. Chicken and egg question? Do we make money and invest it to make the customer happy or do we make the customer happy and therefore we make money? Different areas in the development stack look at value differently. Would go into detail but no time - handout
  3. Noun: regard that something is held to deserve, worth, usefulness Verb: valued at – estimate the monetary worth Run the business
  4. Tangible makes us feel safe – we can assign a number to it, even if it is a wrong number How often have you heard “just put a number on it?” How often have you said it? How often have you needed to make some numbers match or look profitable, successful, efficient, effective
  5. Think internal and external. Who is our “customer” v. “user” Link to dev for a company… Features that deliver customer value do not necessarily lead to increased revenues, or they can be more expensive to develop than the revenue they drive. On the other hand, we can easily imagine software features that are valuable to the business even if they are not directly valuable to the business’s customer (BI, accounting, procurement)
  6. How much will we lose if we wait (opportunity cost) Value – cust and business Urgency – is there a deadline? Regulation? Event? RR – is this something that is risky? Competition? Some event (e.g. Holiday) OE – competition? Is there a window? (First to have something, need to match or beat someone else – also urgency).
  7. B
  8. A
  9. WSJF is the implementation of CD3 and the decision to use SAFe and Lean implementation Assuming WIP = 1
  10. Pick highest CD3 or WSJF
  11. 4:05 activity start 4:15 activity complete
  12. 4:20 Should there be one “right answer”? Probably not. Should make some of the features the same or close WSJF and CoD? – check on this?
  13. Gives us the most value for the least effort to: Gives our customer the most value for the least effort…
  14. Hard to quantify, so why are we always trying? Tangible = blame, we feel wrong, are we punished? What about how the customer feels?
  15. What is lost…? The actual reality of what could happen
  16. Time Risk Scope Value What is lost…?
  17. But it feels good because it’s tangible = blame, we feel wrong, are we punished? This estimate was wrong, we were wrong, we spent too much, took too much time, didn’t get the results. This is waste!
  18. Value to the company as a measure. In most cases…
  19. Value is a feeling to them…
  20. It’s so I can do something. The value is me doing something – the value is a thing, not an amount/measure.
  21. Though that is usually what happens because that is how the company stays in business. But it is not the first thought of the customer. Intangible and hard to assign a number to…
  22. Retail example…persistent cart vs. look ahead buying behavior… MORON FACTOR
  23. Mr. Clean and Swiffer example – Stephen Forte Product is a means to an end So how in the hell do we get it right?!
  24. Here is where I tell the story about the auto save…Moron factor Product detail page – can’t measure value directly back to it… Tech debt also fits here – the customer doesn’t notice if we do, but they notice if we don’t Needs to balance because we can only do so much before it becomes a loss and levels out
  25. What is a performance feature? Filter, ISPU
  26. Apple Pay – maybe this doesn’t make us a ton of money yet, but it differentiates us
  27. Time: it becomes commonplace after time and delights/performance turn into base expectations…search, save example, pay with something other than a credit card (before paypal you needed to have a credit card – teenager story when I had to beg to use a credit card to buy things online)
  28. Add diagram of where factors are here… Explain why I valuated these in this way. Delights – can be a differentiator or can flop, but if you don’t have basic needs met they mean nothing. Start at 4:30 End at 4:40
  29. Add diagram of where factors are here… Explain why I valuated these in this way. Delights – can be a differentiator or can flop, but if you don’t have basic needs met they mean nothing. Start at 4:30 End at 4:40
  30. Sexy, fun, new Explain why I valuated these in this way. Delights – can be a differentiator or can flop, but if you don’t have basic needs met they mean nothing. Start at 4:30 End at 4:40
  31. But need to do the basic things first, otherwise no one will use your product to access the cool new features
  32. Then look at performance features and figure out what is really necessary – that’s more about where we can make some money while providing value
  33. Reminder of time – status quo Pay attention to these…
  34. What happens when we only look at one? We miss the whole picture (portfolio and team)
  35. But what about those damn executive pet projects?? How do we show this to folks that are not into cards and valuation in this way?
  36. Bring this back around – needed to look at not just what is going to make us money, but also what customers want/need and what will keep the site up and stable. It needs to balance out and by admitting we cannot do everything we are making one step toward progress. Fixed about the top 8 defects and site did not go down.