We often hear from prioritizing our work. But everything can be important. Sequencing is a better model because it forces decisions on which item is more important than another. Not making this decision sets the stage for ambiguity throughout the organization on what to work on. This leads to less important work holding up more important work and often starting more work than should be started. This sequence of work allows people throughout the organization to have a common view of what is most important to be worked on.
What’s Required to Sequence Your Work
Sequencing your work requires two things:
- your cost of delay
- the time it will take to manifest the item to be developed and have value realized for
What are you investing in?
The first step to achieve business agility is to create 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 initiatives to budget. Each of these initiatives will be further decomposed into business increments to be delivered as they become available.
For example, a financial company might focus on:
- Retaining assets (because they make money based on a percentage of assets)
- Improving customer experience
- Lowering costs
- Lowering risk
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.
Not Everything You’re Investing In Has Equal Value
In addition to identifying these 4-5 investment areas, we must decide upon their relative importance. For example, retaining assets in the first example may be more important than customer experience. These values can be weighted according to what the intention of the organization is. This will be a way for us to set our strategies, and eventually sequence our MBIs.
Note how it is critical that sequencing takes place on actual items that provide value. And the Cost of Delay should be calculated on the smallest items it can be. We’ll go through this in the next part of the book.
Calculating Business Value for Weighted Shortest Job First (WSJF)
While Weighted Shortest-Job First will be the mechanism we use, how you calculate the business value can have a significant impact on how well it can be used. SAFe’s method of doing relative estimation on business value is not a bad first start. But if more than one business stakeholder is involved, it may be hard to get agreement on what business value is. By basing business value off of the areas of investments that are to be made a more quantifiable conversation can be made. This can also help normalize the calculation of business value for different business stakeholders.
What We Need to Sequence On
One of Don Reinertsen’s most valuable pieces of advice is “If you only quantify one thing, quantify the Cost of Delay.” This means to look at the loss of value realized incurred by a delay. That is, if a release is delayed by two months, and the value we would achieve is $100,000 a month, then our cost of delay is $200,000.
WSJF is a great method of sequencing the work to be done based on cost of delay. However, it requires that the items being sequenced have realizable value. A feature cannot realize value by itself doesn’t realize any value from the customer. While it does have value for the purposes of feedback, this is not cost of delay, nor what Reinertsen means. WSJF should only be applied to items that will realize value when released.
Since the features that are not MBIs have no realizable value for the customer, doing WSJF on features is a non-sequitur. This focus on features also has an unintional side effect in that this has people focus on finishing features and not finishing value that is deliverable and realizable. One can counteract this with an MBI Mindset. It is important that sequencing of work be based on value realized to customers or internal personnel. This is another reason for using MBIs, they provide us with a focus on value realized which improves alignment.
One Other Thing to Consider
SAFe’s WSJF is based on Cost of Delay / Effort. Don Reinertsen’s WSJF is based on Cost of Delay / job duration. There is a difference here that is significant. First, we want to be thinking in terms of duration and not effort expended. Effort expended gets management into thinking about utilization and productivity – thoughts that often sidetrack true improvements. But it also both misses an opportunity and avoids shifting from return on investment being considered as dollars received divided by dollars invested to lowering cost of delay divided by time. When one considers WSJF as CoD / job duration we can see that raising the WSJF value can be achieved by increasing the effort to get the item out. While adding people at the end of a project rarely speeds up delivery of a project, having more people on a project from its beginnings often does. Essentially this can be summed up by saying you should allocate all the capacity you have to make the most important item be built and released as quickly as possible.