No matter what environment an organization operates in, it almost goes without saying that it (along with every other organization) faces the age-old challenge of defining, communicating, delivering, and measuring business value on a daily basis.
You’d think that something we do every day might get easier—but no. All too frequently, we see misalignment among business units, especially in large organizations. Sometimes, even the first step of assigning a definition to value is a struggle. And what about integrating finance into the equation?
Many organizations have introduced agile management of one flavor or another to this process, but in my experience, other agile practices that bring key improvements to value delivery are still missing.
Let’s take a look.
Create the Connection
An often-overlooked factor is a clear connection between strategy and execution—alignment all the way from the executive level to the teams deploying code day to day. I see a need to create this connection on two distinct levels—structural and cultural.
The Structural Connection: The Backbone of Your Program
Agile transformations in large organizations normally focus first on the team level, creating high-performing teams that operate in regulated cadences and focus on technical excellence for rapid delivery.
Further up the chain, organizations need to create a program that enables work to be openly shared across teams of teams, where each backlog has an intrinsic value and focus. Teams that share the same or similar delivery focus areas can be grouped together, resulting in encapsulation that reduces and manages dependencies and costs.
Above the program level, it’s wise to establish a portfolio/investment tier where C-level/executive leaders, in collaboration with Finance, can set a strategy or vision for the entire enterprise that can cascade down the chain.
As for the tools that can help with these tasks, Rally Software® and Clarity can bring the various structures together and make them visible to everyone.
Making these structures consistent with one another ensures the visibility of each team’s contribution to the big strategic picture that is agile transformation from every perspective—planning, strategy, finance, and delivery.
The Cultural Connection: The Heart of Your Program
For your program to be successful, organizations must create a culture of affinity that allows all team members to understand and adapt to change.
That’s why it’s so important that leaders engage in the day to day. When leaders attend team meetings, they foster a culture of connectivity to strategic goals, helping to cement the value of the change in the minds and hearts of all team members.
Furthermore, everyone in the organization, whether or not they’re part of the teams directly responsible for the agile transformation, needs to do three things:
- Know that their work has intrinsic value
- Align themselves to the larger vision
- Understand that they are accountable for value delivery.
Every colleague must be able to answer the question, “Why am I here and how does my work contribute to the goals of the wider organization?”
To help them do these things, leverage your best communicators to drive home the strategic message (“We are here, this is our goal, and this is how we’ll get there) via emails, intranet posts, internal social media, and in-person meetings–whatever communications channel work best for your organization.
Made to Measure
Agility makes it likely that organizations will accomplish many tasks that traditionally were much less feasible. Some of the most common organizational goals are:
- Deliver value faster
- Make and meet commitments
- Improve quality
- Develop and follow a strategic roadmap
- Align teams
- Achieve stable throughput
- Foster rolling wave backlog planning
The made to measure concept calls for us to first understand and define the problems we want to solve. We can then create metrics to measure our success in meeting our goals, adapt, and improve outcomes. So, the first question we need to ask and answer is, “what do we want to manage and how do we measure it?”
All too often organizations get bogged down maintaining and managing metrics rather than improving and empowering teams to deliver value. By simplifying your metrics so that they align with your goals, you’ll be well on your way to supporting your problem-solving efforts.
Agile delivery tells us that the most basic user story in the sprint backlog when delivered should equate to an item of value. To extend the agile delivery concept, backlog (delivered or undelivered) should also be of some quantifiable value.
Value prediction’s complexity stems from its varying degrees of subjectivity and context through which it is judged. The key is to reduce complexity by creating consistency across all organizational elements
This can be viewed through the following prisms:
Focusing on the Outcomes
Organizations must first understand that value is intrinsically embedded in the delivery of business outcomes, not the execution of activities.
Traditional approaches would see the creation of a project which would be broken down into activities (WBS). The completion of these activities would more often than not be fundamentally independent of the business outcome.
Agile approaches see activities as being clustered together and continuously executed in pursuit of an overall business outcome.
Planning at all levels must always keep the business outcomes as the central objective – this gives our organization focus toward an agile approach.
For example, if our objective is to travel from Munich to Berlin the real value is in our arrival in Berlin. Yes, we know that we can take a train, bus, flight, or car but achieving the outcome (arrival in Berlin) is the key to delivering value as opposed to the value of how we got there.
Visualization and Transparency
Organizations suffer enormous amounts of waste because of lack of visualization and transparency. It is not enough to suggest that if IT teams visualize metrics (Burndowns, CFDs) the organization has achieved transparency.
Transparency must exist across the organization. Meaning there is a clear path showing direct flow and linkage between strategic outcomes and execution,
Transparency and visualization allow the organization to logically answer the very basic questions; here is what we are doing to meet our X objective.
This approach allows the organization to create an organic collective ownership of value, where each contribution from each area of the value stream impacts value.
Lack of transparency can be detrimental and can manifest itself in several ways. One example is teams working on the wrong priority items, worst yet on delivering items that have been deemed no longer valuable to the business (discontinued projects) leading to misalignment of outcomes and ultimately wasted effort.
Standardization of metrics
Another key element fostering the understanding of value is standardization of metrics and the data that drive these metrics.
Several organizations have fragmented approaches to metrics. In most cases this occurs over the course of time as organizations grow, with different stakeholders influencing different parts of the organization with their own remit as to what metrics are needed and what data is needed to drive that metric.
The result is several pockets of the organization that become lost in translation in terms of what numbers actually mean.
By creating standardization of metrics and data units, we save time and effort in the generation of reporting but more importantly create commonality across the organization. For example, I have seen teams struggle between estimating story points and days. Why not simplify and settle on a unit that is easily understood across the organization in its application?
Of course, we should allow teams the flexibility to foster ideas and be creative in their approaches, but organizations need that level of commonality with standardization to understand and easily identify value.