Making Value Visible
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The document emphasizes the importance of making value visible within organizations to drive value-based decision-making and reduce low-value activities. It discusses various frameworks, methodologies, and tools such as value modeling, design thinking, and lean start-up principles to enhance business and learning agility. Additionally, it presents case studies and encourages continuous experimentation and adaptation to align investments with tangible benefits, ultimately fostering a culture of value across the organization.
Making Value Visible
- 2. SO WHAT? 2
- 3. GLOBAL MARKETING ROLE 25 staff, in 7 countries 5 Global Business units with differing needs 8 geographic regions Global Field marketing strategies Corporate Communications Corporate Marketing requirements Local sales needs Shrinking budgets Increased expectations 3
- 4. CIO ROLE • Outdated client systems • Inefficient process to update client details • Skilled Agile Developer • Newly acquired Agile skills • Built new system using Agile approach • Clients were happy • After 2 months no-one used the functionality that had taken 80% of the time to develop 4
- 5. SENIOR LEADER • Large backlog of investment ideas for Leadership team to analyse • No clear way of evaluating them • Hard to get alignment and focus 5
- 6. THERE MUST BE A BETTER WAY? 6 How do we get people making value-based decisions? 1 How do we prevent waste from low value activities? 2 How do we make value visible? 3
- 7. MY JOURNEY 7
- 8. BUSINESS / LEARNING AGILITY Business Agility Spiral for Active, Continuous and Intentional Learning 8 Teach Learn Experiment or Try Explore Alternatives See © Pat Reed, iHoriz, 2015
- 9. BELIEVING IS SEEING 9 Mental models are your mind’s tool box for making decisions. The more tools you have, the better equipped you are to make great decisions and avoid problems. Value Stream Mapping Cynefin CanvasesA3’s & Personal Kanban Assessments & Alternate Perspectives Value Modelling and Mapping Sense MakingFocus & Clarity Transparency & Information Radiators EnvisioningEliminate Blind spotsEmpathy Maps Visual Tools Expanding Awareness & Context Lean Project CharteringVisioning Agility Adopting Agile Mindset and Breaking Paradigms © Pat Reed, iHoriz, 2015
- 10. CYNEFIN FRAMEWORK FOR DEALING WITH COMPLEXITY 10For more see: https://en.wikipedia.org/wiki/Cynefin_framework and David Snowden and Cognitive Edge Cause-and-effect is known Cause-and-effect is unknown OrderedUnordered Complex Probe Sense Respond Emergent Complicated Sense Analyse Respond Good Practice Chaotic Act Sense Respond Novel Simple Sense Categorise Respond Best Practice Disorder Volatility Uncertainty VUCA Complexity Ambiguity
- 11. DESIGN THINKING 11 Learn about the audience for who you are designing Construct a point of view that is based on user needs and insights Brainstorm and come up with creative solutions Build a representation of one or more of your ideas to show to others Return to your original user group and testing your ideas for feedback EMPATHIZE DEFINE IDEATE PROTOTYPE TEST
- 12. LEAN START-UP • Start small • Engage everyone in generating ideas • Select the highest value idea and the thinnest possible slice • Experiment and test relentlessly • Fail fast to succeed sooner • Learn from customer feedback • Pivot when needed • Keep on experimenting 12 Idea Build Product Measure Data Learn Build – measure – learn feedback loop © Eric Ries, The Lean Startup, 2011
- 13. VALUE ENGINEERING / VALUE MODELS 13 © Pat Reed, iHoriz, 2015 Value as perceived by the customer = Feature Value Experience (i.e. Sales) (or benefit) + & Service Quality Cost to Cost of Deliver Value Doing Business Perceived Value Perceived Cost
- 14. DIMENSIONS OF CUSTOMER VALUE Consumer banking • Quality • Provides access • Heirloom • Avoids hassles • Reduces anxiety 14https://hbr.org/2016/09/the-elements-of-value
- 15. RELATIVE SIZING 15 T-Shirt XS S M L XL XXL Fibonacci 1 2, 3 5, 8 13, 20 40 100 Planning Poker small 10-20 lbs medium 20-40 lbs large 40-60 lbs xlarge 60-90 lbs huge 90+ lbs
- 16. A3 THINKING / CANVASES / PLAN-ON-A-PAGE Reducing waste and communicating efficiently and effectively 16 Background & problem statement Target condition Current condition Steps, schedule and measurements Project area: Owner: New Initiative Canvas
- 17. Dimensions of Customer Value Value Engineering Design Thinking Cynefin Framework Lean Start-up A3 Thinking A3 Thinking Cynefin Framework Design Thinking Lean Start-up Elements of Value Relative sizing Sse opportunities for break-through innovation Define, test and evaluate dimensions of Value Build a Value Model to evaluate opportunities Continually Probe, sense and respond to emergent information Thin slice to create the minimum testable hypothesis PUTTING IT ALL TOGETHER 17 VALUE LIFE-CYCLE Other seeing tools Empathy Maps
- 18. AN EXAMPLE OF VALUE- BASED PLANNING Scenario: I have a maximum of one `spare day in Bangalore and I’d like to explore and experience the city. What should I do? 18
- 19. VALUE-BASED TRIP PLANNING 19 VALUE TRIP PLANNING Define what’s important to me Look at what’s available Build a Value Model to evaluate options Re-evaluate model after learnt something Test my assumptions
- 20. DEFINE THE VALUE DRIVERS 20 Holiday Experience - Value Planner Value Drivers Cost Fun / Entertainment Self- actualisation Therapeutic Value Wellness Saves time (distance) Quality (ratings) Cost 1. Driver Importance 5 13 8 5 5 8 82.
- 21. EVALUATE THE OPTIONS 21 3 . Options Fun / Entertainme nt Self- actualisation Therapeuti c Value Wellnes s Saves time (distance) Quality (ratings) Cost M. Chinnaswamy Stadium Wonderla Amusement Park Lalbagh Botanical Garden ISKCON Temple Bangalore Bannerghatta National Park 4-Hour Bengaluru Heritage Walk Art of Living International Center Day trip to Agra Visvesvaraya Industrial and Tech Museum UB City Ssaffron Restaurant 3. Options Fun / Entertainment Self- actualisation Therapeutic Value Wellness Saves time (distance) Quality (ratings) Cost M. Chinnaswamy Stadium 8 8 5 8 13 5 2 Wonderla Amusement Park 13 5 5 5 5 13 8 Lalbagh Botanical Garden 5 5 8 8 5 8 1 ISKCON Temple Bangalore 5 13 8 5 5 8 2 Bannerghatta National Park 5 13 8 13 2 8 5 4-Hour Bengaluru Heritage Walk 5 13 13 5 5 8 8 Art of Living International Center 5 8 8 8 8 8 2 Day trip to Agra 8 20 13 5 1 13 20 Visvesvaraya Industrial and Tech Museum 3 5 5 3 3 8 2 UB City 2 2 2 2 5 5 3 Ssaffron Restaurant 5 8 8 8 5 13 5
- 22. REVIEW THE OUTPUT 22 Holiday Experience - Value Planner Options Value Value in Scale Weighted Cost Cost in scale VPI (Cost / benefit Index) Rank M. Chinnaswamy Stadium 329 9% 2 3% 2.58 4 Wonderla Amusement Park 324 9% 8 14% 0.64 10 Lalbagh Botanical Garden 283 8% 1 2% 4.44 1 ISKCON Temple Bangalore 372 10% 2 3% 2.92 2 Bannerghatta National Park 397 11% 5 9% 1.25 6 Private Tour: 4-Hour Heritage Walk 412 11% 8 14% 0.81 8 Art of Living International Center 337 9% 2 3% 2.64 3 Day trip to Agra 538 15% 20 34% 0.42 11 Visvesvaraya Industrial and Tech Museum 214 6% 2 3% 1.68 5 UB City 127 3% 3 5% 0.66 9 Ssaffron Restaurant 362 10% 5 9% 1.14 7 3695 100% 58 100%
- 23. Sensing Problems / Opportunities Sensing Problems / Opportunities Sensing Problems / Opportunities ANYTHING MISSING? 23 Lalbagh Botanical Gardens ISKCON Temple Art of Living International Center
- 24. EXAMPLE DECISION ARCHITECTURE 24 Situational Awareness Simple rules Below x Discuss with one other person, list on experiment board and do and document X=$ or hours Complete new Initiative Sheet Sensing Problems / Opportunities Above X To do Plan Implement Review Done WIP Limits Initiative Board Monthly Decision Making Forum Pre-read initiative sheet Value Score new item Add to backlog Assess where it fits Review Kanban
- 25. INTEL CASE STUDY Intel’s IT Staff was challenged in 2001 to measure the bottom-line impact – the business value – of their IT solutions As a result, the IT department developed the “IT Business Value Program” (ITBV) to include: “Business Dials” – a standard set of financial measurements • A Standard Measurement Methodology • A Common Valuation Process • A Business-Value portfolio • A Set of Ground Rules 25Source: “Measuring the Business Value of Information Technology” by David Sword from the Intel Press
- 26. CASE STUDY: CIANT 26Source: ciant.com
- 27. 27 CASE STUDY: CIANT Source: ciant.com
- 28. PITFALLS AND TRAPS – OVER ENGINEERING • Complexity bias • Ignore simple solutions — thinking “that will never work” — and instead favour complex ones • Occam’s razor - because a hypothesis is the simplest, involving the fewest assumptions, it is most likely the correct one • Value Estimation is a complex problem • Probe – Design and execute tests • Sense – observe how the system responds • Respond – Act based on new understanding 28 “Life is really simple, but we insist on making it complicated.” - Confucius
- 29. FROM THIS… TO THIS… 29
- 30. FROM THIS… TO THIS… 30 Product Backlog Sprint Backlog At end of Sprint Useable Product or Feature At end of Project (after multiple Sprints) Final Product Agile-Scrum Sprint Scrum Work day
- 31. 31 Simple, clear purpose and principles give rise to complex and intelligent behavior. Complex rules and regulations give rise to simple and stupid behavior. Dee Hock, founder and former CEO of Visa
- 32. PITFALLS AND TRAPS – NOT ENOUGH INFORMATION • Discipline of providing just enough information to inform others and help make a better decision • Lack of clarity or understanding on the root- cause of the problem the solution addresses • Difficulty of defining the tangible benefits and how to measure them 32
- 33. PITFALLS AND TRAPS – NOT EVOLVING 33 • Value Estimation is a complex problem • Probe, sense and respond … • Experiment with new methods to improve decision making • Expectancy theory • Base rates • Bayesian cognition to improve decision- making • Decision rules • NPV / IRR • Cost of Delay • Biases • Expand beyond the base • Product / project to portfolio to business Shu Ha Ri – Stages of Learning Follow the Rule - Follow the teachings precisely - Focus on how to do the task as taught Break the Rule - Learn the principles and theories - Learn from others & integrate Be the Rule - Learn through practice - Adapt to circumstance SHU HA RI
- 34. PITFALLS AND TRAPS - CHANGE LEADERSHIP 34 Performance Time Current Comfort Zone Short Term Gain / Excitement Introducing Change Resistance Chaos Transforming Idea Integration New Comfort Zone Denial Virginia-Satir change curve Lean Change Management (Jason Little) OPTIONS INSIGHTS (START HERE) EXPERIMENT PREPARE INTRODUCE REVIEW http://leanchange.org/
- 35. WHERE CAN I START? 35 Define your value drivers Rank the relative importance of the value drivers Broaden to other areas Continually adapt to fit your needs Build your value model Experiment and test and learn with your team
- 36. INVITATION… 36 • What do we do as our world becomes increasingly volatile, unpredictable and overwhelming? • Make value visible and create a culture, language, and currency of value across the organisation • Making value visible helps focus our time to innovate for our customers, and stop doing work that doesn’t deliver the highest value SO WHAT? cost value
- 37. WANT TO BECOME A VANGUARD OF VALUE? 37 Making Value Visible Useful articles 1. Elements of Value article (HBR) 2. Information on Elements of Value including descriptions (Bain & Company) 3. Enterprise Value Map to identify sources of value (Deloitte) 4. Video on the Cynefin framework 5. Planning for Value – Cost of Delay presentation Value Planning Guide 1. Steps to creating a Value Planner Samples of Value models 1. Intel’s Business Value Index 2. Sample Value Model (used in a large client engagement) 3. Value planner example Spreadsheet (used in the session) 4. C I & T Value Engineering Framework (showing use in Agile Delivery) More questions? For more information, feel free to contact me via email at [email protected] Softed.com/007
- 38. THANK YOU Connect with me @andy766cooper [email protected] andy766cooper 38