What is Evidence-Based Management, and why should you care?
What is Evidence-Based Management?
Evidence-Based Management (EBM) is an empirical approach that helps organisations to continuously improve customer outcomes, organisational capabilities, and business results under conditions of uncertainty. (EBM Guide, by scrum.org)
I will focus on the Time to Market key value area in this article with the help of the sources I’ve researched.
The first thing we should keep in mind is that Evidence-Based Management is an empirical approach just like all agile approaches and we need to create a structure that ensures feedback loops for continuous improvement.
Evidence Based Management consists of 4 key-value areas:
The Current Value (CV) Key-Value Area reveals the value that the organization delivers to customers, today.
The goal of looking at Current Value is to maximize the value that an organization delivers to customers and stakeholders at present; it considers only what exists right now, not the value that might exist in the future.
Some questions that organisations need to continually re-evaluate for Current Value are:
- How happy are users and customers today? Is their happiness increasing or decreasing?
- How happy are your employees? Is their happiness increasing or decreasing?
- How happy are your investors and other stakeholders? Is their happiness increasing or decreasing?
The Unrealized Value (UV) Key-Value Area reveals the potential future value that could be realized if the organization was able to perfectly meet the needs of all potential customers.
- The UV key value area measures the market capabilities of the organization.
The Ability to Innovate (A2I) Key Value Area reveals the ability of a product development organization to deliver new capabilities that might better meet customer needs.
- The goal of looking at the A2I is to maximize the organization’s ability to deliver new capabilities and innovative solutions.
- The A2I key value area measures organizational capabilities.
Organizations should continually re-evaluate their A2I by asking:
- What prevents the organization from delivering new value?
- What prevents customers or users from benefiting from that innovation?
The Time to Market (T2M) Key-Value Area reveals the organization’s ability to quickly deliver new capabilities, services, or products.
If you want to improve your product’s time to market, some practices that might help you achieve this goal are:
- Reducing the number of features in each release.
- Committing team members to only one team.
- Adopting continuous integration practices.
- Co-locating team members.
Questions that organizations need to continually re-evaluate for Time to Market are:
- How fast can the organization learn from new experiments?
- How fast can you learn from new information and adapt?
- How fast can you deliver new value to customers?
Which metrics can we measure while evaluating the Time to Market key value area?
- How fast can you repair a system or remove defects? (Mean Time to Repair)
- Do you have continuous integration? (Build Frequency)
- How often do your clients get updates? (Release Frequency)
- How long does it take to get a new feature to a customer? (Lead Time)
- How fast is the team able to turn a requirement into a done increment? (Cycle Time)
Let’s take a quick look at what these terms mean:
Mean Time to Repair
- MTTR (mean time to repair) is the average time it takes to repair a system (usually technical or mechanical). It includes both the repair time and any testing time. The clock doesn’t stop on this metric until the system is fully functional again.
- You can also check here if you want to know more about MTTR.
Build Frequency
- Build Frequency tracks how often the team creates an executable version of the system, integrating the latest code.
Release Frequency
- The number of releases per time period, e.g. continuously, daily, weekly, monthly, quarterly, etc. This helps reflect the time needed to satisfy the customer with new and competitive products.
Lead Time
- Lead time is the period of time that begins with having the idea in mind until it’s usable by the end-users.
Cycle Time
- Cycle time is the period of time that extends from beginning to work for it until it’s usable by the end-users.
Summary:
In light of this information, we can say that Evidence Based Management has 4 main Key Value Areas which are Current Value, Unrealized Value, Ability to Innovate, and Time to Market.
Organizations try to create an outcome by each loop of these four main Key Value Areas and this outcome becomes the evidence on a strategical base.
Just like in all agile approaches, after we’ve got our outcome, we inspect and adapt it according to our customer or market’s needs. Evidence Based Management helps us to create value by using its own empirical way.
Thanks for reading :)
Here are the resources that enlightened me :)
