The hidden assumption we all make is that when things get done, progress is being made. When people are busy the mind tells us that motion, whatever that might be, is better than no motion at all.
- When it will be Done?
- How can we get it Done faster?
- Can we get everything Done?
Often, questions as above are the driver of the decision making. Getting it done is key to anything in life, and it is not an exception in product development. If you don’t get it done for a while you run out of business, profit or non-profit alike.
And if it were that simple, would be the end of a very weird article. But, by the contrary what we see in real life is that it is not that simple. Conflicting experiences such as: things get done and the results are not as we wanted or we don’t get it done and yet everything turns out to be just fine or better. The problem is that we don’t know why.
Eliyahu M. Goldratt explains this conflict superbly in a very simplistic form.
- There are things that should be done and are not.
- There are things that should not have been done and were.
However, you can’t know what should be done and what shouldn’t if there is no holistic understanding of the system, about the bottom line and what is the impact of decision we make. The true fact of life is that when people are ill informed and yet forced to take a decision, they do make one — get everything done. The problem with the decisions we take in such circumstances is that they are flawed, because these decisions are designed to restore local safety rather than global results.
Eliyahu M. Goldratt refers to such decisions as “local optimization” rules. By taking decision in isolation we create global disturbance that creates exactly the results we want to avoid — poor bottom line.
Do we actually need everything? If you dare to say we do not, continue reading to see one possibility to obtain a holistic view of the system and make better decisions.
#1— determine what potential Value is.
“Half of the money I spend on advertising is wasted; the trouble is, I don’t know which half” — John Wanamaker
There is anecdotal evidence which show that most of the features built and shipped are in fact not used. This tell us two things, one good and one bad.
- potential value can be increased significantly;
- the product is incurring waste;
To make better decision, decrease waste and increase the creation of value first and foremost we must determine what value is. Defining what is of most value is no trivial task but the cost of treating every action of equal value is of a greater cost. There is no one way to define what value is, nonetheless I will share a tool, which if used properly will increase your understanding of value and quality of decisions.
Throughput accounting(TA). The basic idea is that every decision that you make should have a positive impact on the bottom line. Your actions need to increase throughput (T) while at the same time decrease Inventory (I) and operational expense (OE).
- Net Profit:
NP = T - OE
- Return on Investment:
ROI = NP / I
#2 — measure realized Value.
“If you can not measure it, you can not improve it.” — William Thomson, Lord Kelvin.
We concluded earlier — getting it done is key to business success. But— when it is done? If you have not defined what potential value is you won’t be able to answer. In fact even if you have defined what value is, you still won’t be able to answer. Nonetheless, when we need to make a decision but we have incomplete data we create yet another “local optima” rule and as such we decide — it is done.
The missing element from our decision making is the valid information which helps us decide if it is or isn’t done. We use lots of data and measure many things such as: velocity, points, flow metrics, number of deployments, defects etc. These king of metrics are also called vanity metrics, however I say that are not, as long as it helps you determine two things —
- potential value (#1) has been realized;
- the opportunity to realize the potential value is not longer there;
In addition to throughput accounting I recommend start learning about innovation accounting. In The Lean Startup Eric Ries beautifully suggests to revert our thinking about product development and start measuring the bottom line as in which of our efforts (if any) generate the outcomes that we desire.
A systemic approach is no longer something in the clouds, something that only an expert can touch. Running a business with a holistic approach is the only way to make it through the fierce competition. Everything that is done right now is not of equal value. It must be clear for everyone when a decision is accumulating waste or is increasing the realized value.
A humble exercise —
- What are the core values, the mission and what is the bottom line?
- What initiatives we do right now, relate to the bottom line and how?
- What initiatives we do right now, do not relate to the bottom line, why?
- What initiatives we need to start that will positively influence the bottom line?
- What information and metrics we need to make sure that every investment we make is tied back to the bottom line?
To all Scrum Practitioners
As we are on the Serious Scrum publication I would like to leave all Scrum Teams with one challenge. Show respect and focus to your stakeholders by working on the highest possible valuable work — always.
Start Sprint Planning with — if this were our last Sprint what should we get done?
Scrum (n): A framework within which people can address complex adaptive problems, while productively and creatively delivering products of the highest possible value. — Scrum Guide