Create Clarity on What Represents Value for the Business and Its Customers
What are you investing in?
Achieving alignment around business agility requires clarity about the strategy and initiatives of the business. In order to be able to make decisions about which ones of these are important, it must also be clear what the business is wanting to invest in. These will often be fairly unique to a business and will help people in the business decide which MBIs of the company’s initiatives are most important.
For example, a financial company might focus on:
Retaining assets (because they make money based on a percentage of assets)
Improving customer experience
They might also include one for improving internal processes.
A not-for-profit, such as a place the provides meals and housing for homeless may focus on:
Number of meals served
Number of beds provided
Amount of monetary donations received
Value of non-monetary donations received
These become the basis for an organization’s strategic initiatives.
How many do you need? While you don’t have to have exactly four or five values for the business, that is often the right number. They may not be equally important; however, once you have the five most important, you have at least 5/6ths of it. These areas of investment are just guides but create focus when decisions need to be made.
How to use these areas of investment
Weighted Shortest Job First (WSJF) suggests we look at the cost of delay (CoD) divided by the duration to create a value for different pieces of work that can be used to determine the sequence within which they should be developed. But how does one compute business value and what does one do WSJF on? Let’s first look at what we should apply WSJF to first. Since our goal is achieving business agility, we are attempting to realize value as quickly as possible. While it may be useful to do WSJF on epics, since we won’t build the entire epic, the CoD and especially the duration of the epic won’t be accurate (both of these should be based on that part of the epic we’ll use). However, features, in an of themselves, don’t often result in the realization of value since they require other features. This is why WSJF should be done on MBIs and not features,.
What WSJF should be applied to is the smallest increment of value that can be realized – the very definition of an MBI. CoD in WSFJ should be based on the business value of the MBIs. This can be refined by attending to the relative importance of what the company wants to be investing in as described above.
Using these areas of investment
The importance of these areas of investment varies depending upon the scale of the organization. At a minimum, they create clarity to people in the entire value stream as to the context of all work. At large scale, they are essential to create the foundation for sequencing the work to be done. This will be described in the Lean-Agile Product Management chapter where they will be used.
Initiatives will be adopted for these strategies. Each initiative will spawn a series of business increments. These can be thought of as epics if you want to use standard Agile and SAFe terminology. Later we will see how epics is an overloaded term creating the need for other terms all of which together cause unneeded complexity. The first three boxes in the following figure represent Lean Portfolio Management.