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Value Mapping with Fewer Dollars and more Sense - Natalie Warnert Agile2016

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Value Mapping with Fewer Dollars and more Sense - Natalie Warnert Agile2016

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Prioritization of work is hard across all levels of the organization. When we focus on feature value, often the first indicator of value is dollars versus effort expended. But what about value that is not realized through dollars? Our customers do not only think in dollars.

By expanding the definition of what value can truly mean, we can normalize, rationalize, and quantify value in new and different ways that make sense to all of our customers. We can assess value across programs as well as engage team members and stakeholders through interactive activities. In a way, it’s like relative sizing to drive values that appeal to many different consumers of your product.

Natalie first demonstrates traditional value estimation (dollars) and the resulting feature map/prioritization. Then, we look at other types of value realization through a team or program level activity using common customer sense. The activity provides participants with hands-on experience estimating and mapping feature value sans dollars on a level playing field. This gives Product Owners and teams a better baseline to align enterprise and program roadmaps with their own team or product priorities - and most importantly what the customer actually values - dollars aside!

Prioritization of work is hard across all levels of the organization. When we focus on feature value, often the first indicator of value is dollars versus effort expended. But what about value that is not realized through dollars? Our customers do not only think in dollars.

By expanding the definition of what value can truly mean, we can normalize, rationalize, and quantify value in new and different ways that make sense to all of our customers. We can assess value across programs as well as engage team members and stakeholders through interactive activities. In a way, it’s like relative sizing to drive values that appeal to many different consumers of your product.

Natalie first demonstrates traditional value estimation (dollars) and the resulting feature map/prioritization. Then, we look at other types of value realization through a team or program level activity using common customer sense. The activity provides participants with hands-on experience estimating and mapping feature value sans dollars on a level playing field. This gives Product Owners and teams a better baseline to align enterprise and program roadmaps with their own team or product priorities - and most importantly what the customer actually values - dollars aside!

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Value Mapping with Fewer Dollars and more Sense - Natalie Warnert Agile2016

  1. 1. @natali ewarnert VALUE MAPPING WITH FEWER DOLLARS AND MORE SENSE Natalie Warnert – #Agile2016
  2. 2. @natali ewarnert • Natalie’s background • The fight for priority – org levels • Traditional value measurement • Activity 1 & debrief • Customer value measurement • Activity 2 & debrief • Bringing it all together AGENDA
  3. 3. @natali ewarnert Natalie Warnert www.nataliewarnert.co m
  4. 4. @natali ewarnert PERSONAL IMPORTANC E
  5. 5. @natali ewarnert DOCUMENTS 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
  6. 6. @natali ewarnert THE FIGHT FOR PRIORITY PORTFOLI O PROGRAM TEAM
  7. 7. @natali ewarnert Long term roadmaps Strategy PORTFOLIO PRIORITY Performance objectives Funding allocation
  8. 8. @natali ewarnert PORTFOLIO PRIORITY Strength: ROI Deficiency: Being laser focused Leads to inconsistent messaging and constant priority changes. What features to buy from what teams?
  9. 9. @natali ewarnert Roadmap alignment Features: -Top down -Laterally -Bottom up PROGRAM PRIORITY Dependency management Funding projects/teams
  10. 10. @natali ewarnert PROGRAM PRIORITY Strength: Value stream Deficiency: Correct balance Balance portfolio wants with team constraints across the product
  11. 11. @natali ewarnert Team roadmap -Enhancements -New functionality -Tech debt -Defects Dependencies TEAM PRIORITY Constraints
  12. 12. @natali ewarnert TEAM PRIORITY Strength: Customer factor Deficiency: Bigger picture Keep focused on the same thing in the long run – but it’s personal.
  13. 13. @natali ewarnert BRAINSTORMING ACTIVITY What issues have you noticed between priority valuation at different levels of the organization? Who usually ”wins” and “loses” these discussions?
  14. 14. @natali ewarnert If everythin g is a priority than nothing is a priority. ”
  15. 15. @natali ewarnert TRADITIONAL 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
  16. 16. @natali ewarnert ROI Net profit/cost of investment = ROI OR… how much can we profit from this investment (percentage)? Tangible TRADITIONAL VALUE MEASUREMENT - ROI
  17. 17. @natali ewarnert Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement] TRADITIONAL VALUE MEASUREMENT – COST OF DELAY
  18. 18. @natali ewarnert 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 TRADITIONAL VALUE MEASUREMENT – COST OF DELAY Feature Cost of Delay Duration A $2 2 B $2 1
  19. 19. @natali ewarnert Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement] If we have an equal duration pick the highest CoD TRADITIONAL VALUE MEASUREMENT – COST OF DELAY Feature Cost of Delay Duration A $2 2 B $1 2
  20. 20. @natali ewarnert 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? TRADITIONAL VALUE MEASUREMENT – COST OF DELAY Feature Cost of Delay Duration A $2 2 B $2 1 C $1 2
  21. 21. @natali ewarnert Cost of Delay – what is the cost of having NOT done this? [value + urgency + risk reduction & opportunity enablement] Weighted shortest job first (WSJF) Implementation and decision to use CD3 = CoD/Duration TRADITIONAL VALUE MEASUREMENT – COST OF DELAY Feature Cost of Delay Duration CD3 = CoD/Duration A $2 2 1 B $2 1 2 C $1 2 1/2
  22. 22. @natali ewarnert Prioritize the work items into a program roadmap based on monetary measures only Incorporate Cost of Delay, Duration, Weighted Shortest Job First, and ROI Left = lower value Right = higher value Lower Value Higher Value ACTIVITY 10 MINUTES
  23. 23. @natali ewarnert 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. ACTIVITY DEBRIEF
  24. 24. @natali ewarnert WSJF is important, but not as important as how we calculate it TRADITIONAL VALUE MEASUREMENT
  25. 25. @natali ewarnert WSJF is important, but not as important as how we calculate it Cost of Delay [value + urgency + risk reduction/opportunity enablement] TRADITIONAL VALUE MEASUREMENT
  26. 26. @natali ewarnert WSJF is important, but not as important as how we calculate it Cost of Delay [value + urgency + risk reduction/opportunity enablement] And duration… TRADITIONAL VALUE MEASUREMENT
  27. 27. @natali ewarnert 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 TRADITIONAL VALUE MEASUREMENT
  28. 28. @natali ewarnert 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 TRADITIONAL VALUE MEASUREMENT
  29. 29. @natali ewarnert But the customer does not care about value as a measure CUSTOMER VALUE MEASUREMENT
  30. 30. @natali ewarnert But the customer does not care about value as a measure Customer 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 CUSTOMER VALUE MEASUREMENT
  31. 31. @natali ewarnert As a…I want…so that… CUSTOMER VALUE MEASUREMENT
  32. 32. @natali ewarnert 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 CUSTOMER VALUE MEASUREMENT
  33. 33. @natali ewarnert 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 CUSTOMER VALUE MEASUREMENT
  34. 34. @natali ewarnert Customer 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) CUSTOMER VALUE MEASUREMENT
  35. 35. @natali ewarnert CUSTOMER VALUE MEASUREMENT - KANO Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled
  36. 36. @natali ewarnert CUSTOMER VALUE MEASUREMENT - KANO Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic
  37. 37. @natali ewarnert CUSTOMER VALUE MEASUREMENT - KANO Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic Performance
  38. 38. @natali ewarnert CUSTOMER VALUE MEASUREMENT - KANO Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Basic Performance Delight
  39. 39. @natali ewarnert CUSTOMER VALUE MEASUREMENT - KANO Very Satisfied Very Dissatisfied Need FulfilledNeed Unfulfilled Time Basic Performance Delight
  40. 40. @natali ewarnert 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 – TEN MINUTES
  41. 41. @natali ewarnert 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 – TEN MINUTES
  42. 42. @natali ewarnert 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 – TEN MINUTES
  43. 43. @natali ewarnert 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 – TEN MINUTES
  44. 44. @natali ewarnert 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 – TEN MINUTES
  45. 45. @natali ewarnert Which features are now the most important customer value factored in? Which features are more likely to be lower in priority? ACTIVITY 2 - DEBRIEF
  46. 46. @natali ewarnert Customer Feeling Money Run a business Build the right thing WHAT IS MISSING?
  47. 47. @natali ewarnert WHAT IS MISSING? Customer Feeling Money Run a business Build the right thing
  48. 48. @natali ewarnert Time Basic Performance Delight ROI (Valuation = Money) Kano (Value = Feeling)Vs. Value Cost ROI VS. KANO – MONEY VS. FEELING
  49. 49. @natali ewarnert Time Basic Performance Delight ROI (Valuation = Money) Kano (Value = Feeling)Vs. Value Cost ROI VS. KANO – MONEY VS. FEELING
  50. 50. @natali ewarnert Time Basic Performance Delight ROI (Valuation = Money) Kano (Value = Feeling)Vs. Value Cost ROI VS. KANO – MONEY VS. FEELING
  51. 51. @natali ewarnert Time Basic Performance Delight ROI (Valuation = Money) Kano (Value = Feeling)Vs. Program (value stream) Value Cost ROI VS. KANO – MONEY VS. FEELING
  52. 52. @natali ewarnert PERSONAL IMPORTANC E
  53. 53. @natali ewarnert • Development tier (level) can help influence decisions • Value is both a verb and a noun (like Agile) • Think about making money and the customer – balance between importance (activity) WRAP UP
  54. 54. @natali ewarnert THANKS FOR COMING www.nataliewarnert.com #agile2016 @nataliewarnert

Editor's Notes

  • 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…
  • This is more valuable than that. Priority can look very different at different levels or the organization

    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.


  • Value return to the company
    Where is the money coming from and going to--- disconnect with what is actually being built on the ground/team level
    Where should I invest this money? What features should I buy from which teams? What product line is doing well and should we invest in? Those lines that are performing the best and are probably focusing on their users so that makes for a difficult decision – feed those teams or invest in teams that are not doing as well? Finite resources drive the need to make these decisions.
  • Laser focus and understanding the lower level issues that are contributing to some of the priority discussion we see at a higher level. Constraints that teams feel are not felt at the portfolio level – they are usually extrapolated and are harder to get to the root issue (example? Dependencies between teams, arch/infra constraints, devops and RM issues)

    They do not understand how their actions impact and disrupt at the program and team level – reprioritizing of features,
    pet projects,
    needing to “see” to believe, not attending demos and then later trying to incorporate feedback – all of this delays value delivery.
  • Level does not exist in most companies – can utilize collective personas (JTBD and user journeys). They can see the picture at multiple levels and understand what is driving value and what is not but often get stuck resolving most disagreements and managing expectations

    Discuss – ORV wants to know where their money will be spent and how much of a feature they will be funding and when they will see it
    -PG & A does not put in enough money but their features need to be done first from a program and product dependency perspective.

    This is often shown at the program level and directly affects team and portfolio, program is stuck in the middle
    Budgeting and funding decisions are leading to poor directional decisions based on short term returns and a less than ideal user experience
    Poor budgeting models based on funding projects v. teams can contribute to this issue of building the wrong thing and not managing expectations

  • Can understand and see how things are implemented
    the value they could bring as well as
    managing the expectations of many different levels in the organization.

    It is difficult to balance expectations, budget, and value, though as things are constantly changing.
  • Teams are at the close level. They know what is being built and how it will affect the customer (or how it will not). They know how it will affect themselves.

    Often teams feel the constraints very closely because they feel the need to deliver everything because priority decisions cannot happen. Or when priorities change there is a lot of throw away work.

    How many times is the solution “hacked” together? How many times does it “work on my local machine?” Does it work for one area and not integrate with other solutions or with other things? How many firedrills when another team did something similar or is thinking about doing something similar?
  • Can translate the value to persona – sometimes cannot see the entire picture and how it relates to the business
  • Are they discussions at all?
  • Noun: regard that something is held to deserve, worth, usefulness
    Verb: valued at – estimate the monetary worth

    Run the business
  • 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
  • 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).
  • 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).
  • 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).
  • 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).
  • WSJF is the implementation of CD3 and the decision to use
    SAFe and Lean implementation
    Assuming WIP = 1
  • 4:05 activity start
    4:15 activity complete
  • 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?
  • Gives us the most value for the least effort to:
    Gives our customer the most value for the least effort…

    Tangible = blame, we feel wrong, are we punished? What about how the customer feels?
  • Often the components are forgotten about for CoD

    Look to do something else with the greater than/less than sign – maybe add descriptor in front of/behind value and then effort?

    Tangible = blame, we feel wrong, are we punished? What about how the customer feels?

  • Often the components are forgotten about for CoD

    Tangible = blame, we feel wrong, are we punished? What about how the customer feels?

  • Time
    Risk
    Scope
    Value
    What is lost…?


    Gives us the most value for the least effort to:
    Gives our customer the most value for the least effort…
  • 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.

    What about how the customer feels?
  • Value to the company as a measure. In most cases…
  • The ”so that” is not usually so that the company I’m paying can make money. It’s so I can do something. The value is me doing something – the value is a thing, not an amount/measure.
  • 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…
  • Retail example…
  • 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)
  • 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)
  • 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)
  • 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)
  • 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)
  • When you are done it will look like this…
    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
  • When you are done it will look like this…
    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
  • When you are done it will look like this…
    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
  • When you are done it will look like this…
    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
  • When you are done it will look like this…
    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
  • 4:45 move on

    What order were they actually implemented in?

    ISPU, Save, Save for Later, filters
    Required Accessories
    ApplePay
    Gift packaging
    Responsive
  • Add image here – label with what the lines are called… Eric

    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?
    Where do I add relative estimation into this?
  • Add image here – label with what the lines are called… Eric

    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?
    Where do I add relative estimation into this?
  • Add image here – label with what the lines are called… Eric

    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?
    Where do I add relative estimation into this?
  • Add image here – label with what the lines are called… Eric

    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?
    Where do I add relative estimation into this?
  • 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.
  • Add diagram of where factors are here
  • ×