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AgileCamp Dallas: Unpacking Business Value (Mironov)

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Rich Mironov
Rich Mironov

From the development side, we often think of Business Value as accurate, one-dimensional, and easy to auto-sort. We unpack this a bit, and try to get back to real customer value. Core analogy: is freeze-dried astronaut ice cream really ice cream? Do our paying customers care about business value points, or only real improvements they can directly experience? A keynote at AgileCamp Dallas, 19 Oct 2015

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UNPACKING BUSINESS VALUE AgileCamp Dallas Rich Mironov @richmironov
•  Process improvements: throughput, quality, building things right •  Assumes strategic prioritization and useful market outcomes •  Does “Business Value” still taste like customer success? Agile’s Focus on Velocity
There’s nothing more wasteful than brilliantly engineering a product that doesn’t sell, or a project that doesn’t matter.
•  “The Business” separated from “The Team” •  Assigned value, not market outcome •  Early (fixed) estimates •  Prioritizing unlike things algorithmically •  Are paying customers saying “yum?” We’re Forgotten What Real Business Value Tastes Like
Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
•  New product/service •  Promise of future revenue •  Feature/workflow improvement •  Promise of future user happiness •  Technical debt reduction •  Promise of future velocity •  Test automation, CI-CD •  Promise of faster releases •  System improvements •  Promise of future operational savings Many Flavors of Business Value
Hypothesis: •  Project business value estimates +/- 70% •  1 in 10 will deliver zero value Would that change portfolio planning and stakeholder interactions? Business Value Error Bars >> Development Error Bars
1.  Negotiate real trade-offs with decision-makers 2.  Relative, like-with-like comparisons 3.  Reality-based budgeting (projects don’t end) 4.  Get closer with actual users (paying customers) What Can We Do?
Development can never build as fast as we can dream
•  “CEO says it’s really important.” •  “We already promised it to a big prospect.” •  “How hard could it be? Probably only 10 lines of code.” •  “We’ve been talking about this for months.” •  “We’ve gone agile, which gives us infinite capacity...” •  “My neighbor’s kid could do this in an hour.” Magical Thinking
•  Most requests will go unfulfilled •  Roadmap: what we are building (instead of new request)? •  What commitments would we drop to add this? •  Trade-offs among like items #1: Real Trade-Offs are EXCLUSIVE ORs (not ANDs)
Features  for   current  release   50%   Quality,  test   automa6on,  tech   debt  15%   Management,   overhead,  10%   Future  R&D,  5%   One-­‐offs,  non-­‐ roadmap  20%   Typical Commercial Software Development Budget
Prioritizing Within Buckets #2. Prioritization within buckets
•  Quick-sort top candidates •  Let us negotiate complex issues •  Live stakeholders around the table •  WSJF assumes accuracy and independence that I rarely see Prioritization Algorithms Get Us 80% There
•  Programs/products run for a very long time •  Things we dropped from V1.0 •  What we learn, new needs, platform evolution •  Yet we budget as if projects end on ship date •  Need sustaining budget until end-of-support #3: Reality-Based Budgets
•  External customers pay our salaries •  Measure satisfaction, adoption, usage, revenue •  Meet them, hear their stories, look for joy #4: Get Closer to (Paying) Customers
•  Talk in terms of paying customers •  Use your own products •  Listen in on customer calls/ interviews/UX tests* •  Ask for success metrics •  Look at revenue •  Celebrate customer improvements Things You Can Do (This Week)
•  Business Value is essential •  Different flavors •  Not precise enough for auto-sort •  Sample what your real customers taste Take Aways
Rich Mironov Mironov Consulting San Francisco, CA rich@mironov.com 1.650.315.7394 twitter.com/richmironov linkedin.com/in/richmironov

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AgileCamp Dallas: Unpacking Business Value (Mironov)

  • 2. •  Process improvements: throughput, quality, building things right •  Assumes strategic prioritization and useful market outcomes •  Does “Business Value” still taste like customer success? Agile’s Focus on Velocity
  • 3. There’s nothing more wasteful than brilliantly engineering a product that doesn’t sell, or a project that doesn’t matter.
  • 4. •  “The Business” separated from “The Team” •  Assigned value, not market outcome •  Early (fixed) estimates •  Prioritizing unlike things algorithmically •  Are paying customers saying “yum?” We’re Forgotten What Real Business Value Tastes Like
  • 5. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
  • 6. •  New product/service •  Promise of future revenue •  Feature/workflow improvement •  Promise of future user happiness •  Technical debt reduction •  Promise of future velocity •  Test automation, CI-CD •  Promise of faster releases •  System improvements •  Promise of future operational savings Many Flavors of Business Value
  • 7. Hypothesis: •  Project business value estimates +/- 70% •  1 in 10 will deliver zero value Would that change portfolio planning and stakeholder interactions? Business Value Error Bars >> Development Error Bars
  • 8. 1.  Negotiate real trade-offs with decision-makers 2.  Relative, like-with-like comparisons 3.  Reality-based budgeting (projects don’t end) 4.  Get closer with actual users (paying customers) What Can We Do?
  • 9. Development can never build as fast as we can dream
  • 10. •  “CEO says it’s really important.” •  “We already promised it to a big prospect.” •  “How hard could it be? Probably only 10 lines of code.” •  “We’ve been talking about this for months.” •  “We’ve gone agile, which gives us infinite capacity...” •  “My neighbor’s kid could do this in an hour.” Magical Thinking
  • 11. •  Most requests will go unfulfilled •  Roadmap: what we are building (instead of new request)? •  What commitments would we drop to add this? •  Trade-offs among like items #1: Real Trade-Offs are EXCLUSIVE ORs (not ANDs)
  • 12. Features  for   current  release   50%   Quality,  test   automa6on,  tech   debt  15%   Management,   overhead,  10%   Future  R&D,  5%   One-­‐offs,  non-­‐ roadmap  20%   Typical Commercial Software Development Budget
  • 13. Prioritizing Within Buckets #2. Prioritization within buckets
  • 14. •  Quick-sort top candidates •  Let us negotiate complex issues •  Live stakeholders around the table •  WSJF assumes accuracy and independence that I rarely see Prioritization Algorithms Get Us 80% There
  • 15. •  Programs/products run for a very long time •  Things we dropped from V1.0 •  What we learn, new needs, platform evolution •  Yet we budget as if projects end on ship date •  Need sustaining budget until end-of-support #3: Reality-Based Budgets
  • 16. •  External customers pay our salaries •  Measure satisfaction, adoption, usage, revenue •  Meet them, hear their stories, look for joy #4: Get Closer to (Paying) Customers
  • 17. •  Talk in terms of paying customers •  Use your own products •  Listen in on customer calls/ interviews/UX tests* •  Ask for success metrics •  Look at revenue •  Celebrate customer improvements Things You Can Do (This Week)
  • 18. •  Business Value is essential •  Different flavors •  Not precise enough for auto-sort •  Sample what your real customers taste Take Aways
  • 19. Rich Mironov Mironov Consulting San Francisco, CA rich@mironov.com 1.650.315.7394 twitter.com/richmironov linkedin.com/in/richmironov