Agile Chicago October 2018 @danielwalsh › wp-content › uploads › ... · 9. Continuous...

[email protected]

Agile Chicago

October 2018

@danielwalsh

http://www.nucognitive.com/

http://twitter.com/danielwalsh



@danielwalsh

<Value> Is An Elusive Concept

Difficult to define…

misunderstood …

ambiguous …

…and while we may not agree on

a precise definition for <value>,

we all kind of ‘get it.’

2 Copyright © 2018 nuCognitive. All rights reserved.


https://twitter.com/danielwalsh

@danielwalsh

This is the journey of one

amateur axiologist that

hopes to encourage others

to follow.

“..specifying value

accurately is the critical first

step in lean thinking.”

Lean Thinking

by Womack & Jones, 1996


Reference: https://en.wikipedia.org/wiki/Axiology



https://en.wikipedia.org/wiki/Axiology

https://www.amazon.com/gp/product/0743249275/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0743249275&linkId=1e07a081fed9b19137545200a0cc8c3e

https://en.wikipedia.org/wiki/Axiology

@danielwalsh4 Copyright © 2018 nuCognitive. All rights reserved.

Scaling Without Getting Stupid




Misconceptions about <value>

are dangerous at scale.



@danielwalsh

Company Inertia Challenges


“… most producers want to make

what they are already making ...”

Lean Thinking





@danielwalsh

Customer Inertia Challenges


“… many customers only know

how to ask for some variant of

what the are already getting.”

Lean Thinking





@danielwalsh

Abstraction Challenges


Company Customers

Suppliers

Equipment

Materials

Supplies Products

$$$ $$$

Company CustomersSuppliers

Humanity

End Users

Nature

Sub Suppliers

CustomersUpstream

SuppliersOutputsYouInputs

Reference: Learning to See – Value Stream Mapping



https://www.amazon.com/gp/product/0966784308/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0966784308&linkId=4f94a8987c1b19707b1d0ff64803f0ca


How would you define <value>?



@danielwalsh

How Do You Define <Value>?

While there are several definitions*,

value is frequently thought of as:

• a held principle or behavior standard.

Philosophical values assessed by

what is right or good (e.g. trust).

• the importance, worth, merit, or

usefulness of something.

Economic value assessed by

currency, which could be money, time

investment, reputation, attention,

personal data, access, etc. (e.g.

battery life).


Reference: https://www.merriam-webster.com/dictionary/value



https://www.merriam-webster.com/dictionary/value

@danielwalsh

What does Agile say about <value>?

11Copyright © 2018 nuCognitive. All rights reserved.

Reference: http://agilemanifesto.org



http://agilemanifesto.org/


Principles behind the Agile Manifesto1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the customer's

competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter

timescale.

4. Business people and developers must work together daily throughout the project.

5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to

get the job done.

6. The most efficient and effective method of conveying information to and within a development team is face-to-face

conversation.

7. Working software is the primary measure of progress.

8. Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a

constant pace indefinitely.

9. Continuous attention to technical excellence and good design enhances agility.

10. Simplicity--the art of maximizing the amount of work not done--is essential.

11. The best architectures, requirements, and designs emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior

accordingly.





@danielwalsh

Extreme Programming

The customer will provide a shortlist of high-value

requirements for the system

Business sorts the user stories by Business Value

The delivery of the software is done via frequent releases

of live functionality creating concrete value

… lots of other qualifiers for different kinds of value


Reference: https://en.wikipedia.org/wiki/Extreme_programming



https://en.wikipedia.org/wiki/Extreme_programming

@danielwalsh

Scrum Guide

References to <value> increased from 11 instances (2010) to 20 instances (latest Nov-2017)

• The Product Owner is responsible for maximizing the value of the product resulting from work of the Development Team. Optimizing

the value of the work the Development Team performs.

• The Scrum Master helps everyone change these interactions to maximize the value created by the Scrum Team. Ensuring the Product

Owner knows how to arrange the Product Backlog to maximize value.

• Helping the Development Team to create high-value products

• Based on that and any changes to the Product Backlog during the Sprint, attendees collaborate on the next things that could be done to

optimize value.

• Scrum Artifacts Scrum’s artifacts represent work or value to provide transparency and opportunities for inspection and adaptation

• Product Backlog items have the attributes of a description, order, estimate, and value

• As a product is used and gains value, and the marketplace provides feedback, the Product Backlog becomes a larger and more

exhaustive list.

• The Increment is the sum of all the Product Backlog items completed during a Sprint and the value of the increments of all previous

Sprints.

• Decisions to optimize value and control risk are made based on the perceived state of the artifacts

• To the extent that the artifacts are incompletely transparent, these decisions can be flawed, value may diminish and risk may increase.


Reference: https://www.scrumguides.org



https://www.scrumguides.org/

@danielwalsh

User Story Are A Common Way To Define Value

As a <type of user>, I want <some goal> so that <some reason>.

INVEST* is an acronym for a widely accepted set of criteria to assess the quality of a user story.

A good user story should be:

Independent (of others)

Negotiable (not a contract)

Valuable (vertical slice)

Estimable (approximations work)

Small (fits within an iteration)

Testable (capture success with a test)


*Reference: Bill Wake Blog on INVEST https://xp123.com/articles/invest-in-good-stories-and-smart-tasks/



https://xp123.com/articles/invest-in-good-stories-and-smart-tasks/

@danielwalsh

How do we know if something is of value?




@danielwalsh

Countermeasures to conceptualize

and understand value





Reference: Jason Davis. 15.912 Technology Strategy. Fall 2008. Massachusetts Institute of Technology: MIT OpenCourseWare, https://ocw.mit.edu.

License: Creative Commons BY-NC-SA. Image courtesy of Prof. Rebecca Henderson

How will we

Deliver value?

How will we

Capture value?

How will we

Create value?



https://ocw.mit.edu/courses/sloan-school-of-management/15-912-technology-strategy-fall-2008/

https://ocw.mit.edu/

https://creativecommons.org/licenses/by-nc-sa/4.0/


Reference: Business Model Generation by Osterwalder & https://strategyzer.com/canvas/business-model-canvas

https://en.wikipedia.org/wiki/Business_Model_Canvas#/media/File:Business_Model_Canvas.png

How will we

Deliver value?

How will we

Capture value?



https://www.amazon.com/gp/product/0470876417/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0470876417&linkId=f0c57ccd7bdf2bd052e8ad61d054290c

https://strategyzer.com/canvas/business-model-canvas

https://en.wikipedia.org/wiki/Business_Model_Canvas#/media/File:Business_Model_Canvas.png

https://www.amazon.com/gp/product/0470876417/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0470876417&linkId=f0c57ccd7bdf2bd052e8ad61d054290c


Reference: Learning to See by Rother, Shook, Womack

Image Attribution CC BY-SA 3.0 DanielPenfield https://en.wikipedia.org/wiki/Value_stream_mapping

How will we

Deliver value?



https://www.amazon.com/gp/product/0966784308/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0966784308&linkId=16ed72083e9c3812c78df04a3585b53c

https://creativecommons.org/licenses/by-sa/3.0

https://commons.wikimedia.org/w/index.php?title=User:DanielPenfield&action=edit&redlink=1

https://en.wikipedia.org/wiki/Value_stream_mapping

@danielwalsh

Value-Stream Mapping Example

Copyright © 2018 nuCognitive. All rights reserved.





@danielwalsh

What Is Your Team’s Value Test?

A value-added activity meets the following criteria1. The customer must be willing to pay for the activity and

2. The product or service must change

3. It must be done right the first time

OR

4. Creates “usable” knowledge for future profitable value-streams

Non-value added activities are categorized asType 1: Necessary under current constraints (necessary waste)

Type 2: Not necessary and can be eliminated (pure waste)

Copyright © 2018 nuCognitive. All rights reserved.






Reference: Jason Davis. 15.912 Technology Strategy. Fall 2008. Massachusetts Institute of Technology: MIT OpenCourseWare, https://ocw.mit.edu.

License: Creative Commons BY-NC-SA. Image courtesy of Prof. Rebecca Henderson

How will we

Deliver value?

How will we

Capture value?

How will we

Create value?



https://ocw.mit.edu/courses/sloan-school-of-management/15-912-technology-strategy-fall-2008/

https://ocw.mit.edu/

https://creativecommons.org/licenses/by-nc-sa/4.0/

@danielwalsh

Wealth of Nations

Copyright © 2018 nuCognitive. All rights reserved.26

An Inquiry into the Nature and

Causes of the Wealth of Nations

by Adam Smith 1776

Value-in-exchange (worth) as

the product’s power for

purchasing other objects

Value-in-use (outcomes) as the

goodness of a product’s use

Reference: https://en.wikipedia.org/wiki/Adam_Smith

https://en.wikipedia.org/wiki/The_Wealth_of_Nations



https://www.amazon.com/gp/product/0857080776/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0857080776&linkId=05523df63d993c600e28ec780c3bc97b

https://en.wikipedia.org/wiki/Adam_Smith

https://en.wikipedia.org/wiki/The_Wealth_of_Nations

@danielwalsh

What is Value?

27Presentation copyright © 2018 nuCognitive LLC. Content copyright © 2018 Erik Simmons. All Rights Reserved.

Business

Value

Ingredient

Capability

Usage

Technology

Value combines the economic and

conceptual aspects of a system

The product is an offering that serves as a

type of promise to potential customers

Value

Usage

Business

Brand

Reference: Balanced Solutions – How to deliver winning products that balance business, usage, and technology



https://www.amazon.com/gp/product/B06XQR6ZNJ/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=B06XQR6ZNJ&linkId=71dc13061e8d34541212df6662f444c4

@danielwalsh

Many Understand the Importance of Value-In-Use

64% of Features Really Rarely or Never Used1

• Data was sourced by Jim Johnson

(Standish Group)

• Presented it in a keynote at the XP 2002

conference

• Study was based on four internally

developed projects at four companies

…lots of behavioral analytics tools2

How do you measure Value-in-use?


References:

1) Mike Cohen Blog https://www.mountaingoatsoftware.com/blog/are-64-of-features-really-rarely-or-never-used

2) https://www.predictiveanalyticstoday.com/best-user-and-entity-behavior-analytics-software/



https://www.standishgroup.com/

https://www.mountaingoatsoftware.com/blog/are-64-of-features-really-rarely-or-never-used

https://www.predictiveanalyticstoday.com/best-user-and-entity-behavior-analytics-software/


People don’t want to

buy a quarter-inch drill.

They want a quarter-

inch hole.

Theodore Levitt

Marketing Myopia, HBR 1960



@danielwalsh

Helpful metaphors…

Value-In-Exchange as potential energy: when we

purchase a product we are buying the potential to

create value so we can achieve desired outcomes

Value-In-Use as kinetic energy: when we use a

product we are creating or experiencing desired

outcomes




@danielwalsh

Value-In-Use Example

Value is created only when the mug is

experienced in some way

Value is emergent and experienced through

interactions between the users and the offer

Value-in-use shifts the focus away from

outputs (worth and exchange) toward

outcomes (experience and use)




@danielwalsh

Outcome-driven Innovation and Jobs-To-Be-Done

Outcome-driven innovation1 is built around the idea that people buy (or hire)

products and services to get jobs done and produce beneficial outcomes


References: 1) https://en.wikipedia.org/wiki/Outcome-Driven_Innovation

What Customers Want by Ulwick, Jobs To Be Done by Ulwick, Competing Against Luck by Christensen, Hall, Dillon, Duncan



https://en.wikipedia.org/wiki/Outcome-Driven_Innovation

https://www.amazon.com/gp/product/0071408673/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0071408673&linkId=89c7e3a358035bc08811efc085713148

https://www.amazon.com/gp/product/0990576744/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0990576744&linkId=005877d4893db6829a9d1f662164c3d6

https://www.amazon.com/gp/product/0062435612/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0062435612&linkId=9dc2fc99ab89145b5670f7ed0c0eeb08

https://www.amazon.com/gp/product/0071408673/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0071408673&linkId=89c7e3a358035bc08811efc085713148

https://www.amazon.com/gp/product/0990576744/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0990576744&linkId=005877d4893db6829a9d1f662164c3d6

https://www.amazon.com/gp/product/0062435612/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=0062435612&linkId=9dc2fc99ab89145b5670f7ed0c0eeb08


Reference: Value Proposition Design by Osterwalder

https://strategyzer.com/canvas/value-proposition-canvas and Value Proposition Canvas is Copyright Strategyzer.com and Strategyzer AG.



https://www.amazon.com/gp/product/1118968050/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=1118968050&linkId=a5e9cc9c4e5cddae740ea70744962dfb

https://strategyzer.com/canvas/value-proposition-canvas

https://strategyzer.uservoice.com/knowledgebase/articles/506842-business-model-canvas-and-value-proposition-canvas

https://www.amazon.com/gp/product/1118968050/ref=as_li_qf_asin_il_tl?ie=UTF8&tag=d1115-20&creative=9325&linkCode=as2&creativeASIN=1118968050&linkId=a5e9cc9c4e5cddae740ea70744962dfb

@danielwalsh

Elements of Value1

lists categories for

how products and

services create value

for customers and

users.


References:

1) http://www.marketingjournal.org/the-elements-of-value-an-interview-with-jamie-cleghorn/ &

https://hbr.org/2016/09/the-elements-of-value

2) https://hbr.org/2018/03/the-b2b-elements-of-value

B2C Value Categories1

Self-transcendence

Provides Hope

Self-Actualization

Motivation

Heirloom

Affiliation and

Belonging

Reduces Anxiety

Rewards Me

Nostalgia

Design and

Aesthetics

Badge Value

Wellness

Therapeutic Value

Fun & Entertainment

Attractiveness

Provides Access

Saves Time

Simplifies

Makes Money

Reduces Risk

Organizes

Integrates

Connects

Reduces Effort

Avoids Hassles

Reduces Cost

Quality

Variety

Sensory Appeal

Informs

B2B Value Categories2

Purpose

Hope

Social Responsibility

Network Expansion

Marketability

Reputational Assurance

Design and Aesthetics

Growth and

Development

Reduced Anxiety

Fun & Perks

Time Savings

Reduced Effort

Decreased Hassles

Information

Transparency

Availability

Variety

Configurability

Responsiveness

Expertise

Commitment

Stability

Cultural Fit

Risk Reduction

Reach

Flexibility

Component Quality

Improved Top Line

Cost Reduction

Product Quality

Scalability

Innovation

Meeting Specifications

Acceptable Price

Regulatory Compliance

Ethical Standards



http://www.marketingjournal.org/the-elements-of-value-an-interview-with-jamie-cleghorn/

https://hbr.org/2018/03/the-b2b-elements-of-value

https://hbr.org/2018/03/the-b2b-elements-of-value

@danielwalsh

Some Implications…

Products may have worth at the point of

exchange by may NEVER actually create

value for users (e.g. uneaten food,

miswanted products)




@danielwalsh

Mini-exercise

Let’s consider a ride share offering (e.g. Lyft, Uber, …)


What are the

outcomes of the

experience?

functional,

emotional,

…

???

→

→

→

→

→

→

→

What are the

components of the

solution?



@danielwalsh

Implications of Value As Co-creation

Users co-create value with offerings through

resource integration and experiential use to

achieve outcomes in context

• Users co-create value with the offering

• Value creation occurs at the point of

experiential use

• Users need to access their own resources

and integrate other resources in order to

create value

→Users as system integrators

→Offerings as resources for value co-creation

in context




@danielwalsh

Implications of Value-In-Context

The ability to serve contexts where both exchange and need are aligned usually creates a higher willingness to pay

The closer Value-In-Exchange point is to Value-In-Use → the more the offering is worth

E.g. bandages at a festival

HMW - give customers a choice of buying in advance AND on-demand?

E.g. temporal pricing by Zoom and Lyft




@danielwalsh

Summary

Agile concepts tend to focus on the delivery of value as

outputs

• Agile Manifesto: “Our highest priority is to satisfy the

customer through early and continuous delivery of

valuable software”

• Scrum: “The Product Owner is responsible for maximizing

the value of the product resulting from work of the

Development Team”

• XP: sort the user stories by Business Value

Overly focusing on <value> as delivery of output

and as value-in-exchange is risky




@danielwalsh

Possible Next Steps

In order to be successful, organizations will need to understand value

in terms of the goodness and outcomes that users co-create with

their offerings, rather than in terms of the worth that is generated

through exchange

• Value-in-exchange → Value-In-Use

• Offerings as resources for the co-creation of value by users

• Users as system integrators for the co-creation of value in context

• Value-Driven Development (VDD)

• Write the “tests” for value first (Both for VIE AND VIU)

• Build an MVP(Minimum Valuable Product) to make the test pass

• Refactor





Q&AFeel free to follow up with us at

[email protected]

linkedin.com/in/danwalsh1115

The Achilles’ Heel of Agile Teams… Value

http://bit.ly/walshslides



mailto:[email protected]

mailto:[email protected]

https://linkedin.com/in/danwalsh1115

http://linkedin.com/in/danwalsh1115

http://bit.ly/walshslides

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