Understanding and Addressing Value: The Best Enterprise Survival Strategy
Change is the only certainty in this world. Change is always lurking just around the corner, no matter our current situation. We just have to be prepared for it and see change as an opportunity, not a threat. But… Will agile teams understand that this constant change also applies to their increased value?
What is Value?
Value is the benefit you get from owning something, be it a product or a service. For example, you can buy a new laptop because you want to work faster and finish your tasks with better tools.
Value is the desired benefit customers get once they own that product or service in business terms. And as an Agile Coach in an Agile Team, your role is that everyone can understand that offering that value incrementally serves us so that customers and stakeholders start benefiting as soon as possible but also always receive better value over time (Well, you get feedback after each iteration, right?).
One of the biggest problems that agile teams encounter is the inability to measure their value as they focus on building value rather than the increasing value per se. And that is the reason why many teams are not really Agile because neither the Organization in which they are immersed nor the people who accompany them understand that they should not be measured by the value they increase and not by the amount of their work or compliance with the framework that the consultant has just sold us. This misunderstanding of what we should really measure is a severe problem, inherited from the pseudo-consulting companies that, trying to sell services or try to sell agile magic recipes, focused on showing results of the process (Measuring story points, served story points, not catered,
This lack of visibility in the measurements of the value that they increase removes, without a doubt, the reason for being or doing Agile. It causes frustration among team members, who feel that they are measured by the framework or framework and its compliance and not by the satisfaction of the value they increase.
When we accompany Agile teams, we have to take a step back and think about the measure of success. Is it the number of stories delivered? The number of points completed? The number of lines of code written?…
Or is it something else, like customer satisfaction or increased revenue or market share?
How is it understood?
We need a way to calculate the value to measure those teams’ value. And to identify value, we can ask ourselves: What are we building? Who benefits? How do they benefit? When will they benefit? What are we building it for now?
And to understand the value, you have to understand that customer expectations are dynamic and constantly changing. For example, few customers expected to use their mobile phones to make payments a decade ago. But today, such technology is commonplace. Similarly, when Amazon launched its Prime offering in 2005 with free two-day shipping, it was seen as innovative and disruptive. Today, customers expect same-day shipping to be the norm.
However, expectations are often subjective and vary significantly from one client to another. While these new technologies may be exciting to some consumers — especially early adopters — others may be perfectly content with the status quo.
Understanding the value your customers expect is essential because it will help you identify the features and services that are important to them now and which ones they may be interested in in the future.
It will also help you understand which features or services are specifically crucial to your target audience and better prioritize backlogs. In fact, many companies have found success by focusing on capturing high-value or high-return customers first. Once you’ve successfully done this, you can apply what you’ve learned to other customer segments according to the prioritization they exercise out of empathy and understanding of the value they add.
And do not forget that the main reason for the existence of an agile team is to offer value and make that value always more and better. We cannot increase value unless we understand how to measure and improve that value. So, in addition to understanding, agile teams must also communicate value in a way that makes sense to executives, stakeholders, customers, and other organizations who are also trying to maximize their impact on business.
This understanding and communication of value will keep the flame of the team’s purpose alive. Of course, the happiness of building something that we understand impacts clients that we know, with whom we empathize, and to whom we always give our best.
The first thing is to understand that there is no single way of measuring value for each team. This means that the team is responsible for the value it creates and its measurement. But often, there is no single metric that can measure it. So here are some things to keep in mind when calculating the value created by teams:
- Powerful questions that lead to even more powerful insights into measuring success: What are the main success metrics for this product or service? (A good indicator of whether agile teams have accomplished their mission is if these key success metrics have been moving in the right direction lately. If you’re not already tracking key success metrics, now would be a good time to start and soak up the concept of OKRs).
- Powerful questions about iteration increments: What is the initial goal of this release/sprint/iteration? How will we know that we have achieved it? (You can help yourself with concepts such as Finished Definition or Product Goal and/or Iteration)
- KSI or Key Success Indicators: The Key Success Indicator is a measure of progress that tells us how we are doing. A KSI is an indicator of success relevant to a product or service in a specific iteration or release. It is constantly changing, just like the value we serve. It can be a financial measure, such as MRR (Monthly Recurring Revenue). Still, it could also be product design changes, such as improvements in conversion rates or usability. It is what the team and/or Organization consider success at that time. KSIs allow teams to decide what success means to them and the value they add; it’s a measure they can influence and take ownership of. The team must assume the responsibility of continuously improving the KSI, attending to it, and empathizing with those who benefit from the value — customer.
Adding value means offering the correct value at the right time. And that’s precisely what agile teams and their leaders need to understand. Let’s stop measuring things that don’t matter and understand that to survive in this fast-paced environment, we must understand and question the concept of “value” and notice every change in it. The better we know the value, the better results, whichever KSI you choose.