Agile 2013 – Measure Business Value

At Nordstrom, we are becoming more disciplined bout data-driven decision-making. In Direct, we have been using a scoring system to measure Business Impact for about year. We’ve tweaked this formula a few times and added some curbs to aide in scoring. As the organization has adopted the Scaled Agile Framework (SAFe), more business units are finding their own business value measurements but there isn’t a consistent formula across the company. There’s been some debate about this and I was hoping this session would provide some insight into how we can normalize business value for our enterprise portfolio.

I was a bit disappointed in the session because it was more about a facilitation technique rather than a methodology for measuring value. This was an workshop-format where the presenter, Chris Sims, taught us how to prioritize using stack-ranking card sorts. I know how to do card sorts and their value is has diminishing returns above 20 items and about a dozen participants. It doesn’t really scale and while cases have to be made to ‘sort,’ it’s not really as data-driven as we want to be as an organization.

I’m not saying there wasn’t value in the session; it’s just not what I was looking for. It’s a valuable technique to know and is incredibly useful at the team level and on small-scale engagements. Diana McCasey said it well, “It’s like an Agile 101 course on measuring business value but what we really need is Agile 401.”

Quotable Quotes

‘Incremental Value’ The things that make your product better but aren’t differentiating. It’s important to not ignore incremental value when measuring and comparing business value at the feature level. This is something I continually fret over when we look at WSJF prioritization. I often worry that we’ll lose sight of the things we should do to maintain the quality and value of our products that don’t necessarily increase their value. Unfortunately, the session didn’t provide any insight into this; but I’ll take the phrase and carry it around with me.

'Dimensions of Value’ Business value shouldn’t be measured one-dimensionally. We already measure Business Value multi-dimensionally. In Direct, we use Customer, Financial, Enablement, and Strategic Boost as factors in our formula. This isn’t new but I like the phrase.

Things to Read Up On

•  Kano Model