Within the agile mindset, delivering value looks very different than traditional thinking around this topic. For the next three posts, I’m going to cover three principles that are crucial to delivering value with an agile mindset:
- Focus your attention on lead time (= your most precious resource) and delay time (= your most toxic obstacle).
- Move forward with imperfect information, using explicit assumptions to approximate value.
- Put a price tag on time, so that the economic consequences of delay are crystal clear.
Looking at lead time
Let’s begin by looking at lead time through a common experience for most people: ordering coffee. Lead time starts as soon as a customer walks into the store. Lead time then tracks the amount of time the customer spends waiting in line, making the order, and all the other activities that need to happen before the coffee is delivered to the customer.
When it comes to knowledge work, measuring lead time can be a bit more complex. Teams are often looking at insight from the market and performing acts of ideation, discovery and grooming. In this case, when does lead time start and when does it stop?
Taking a page from the Kanban method, knowledge workers can measure lead time by agreeing on a commitment point and delivery point at the team, departmental or organizational level. The commitment point is when a group of knowledge workers commit to actually delivering a piece of work. The delivery point is when that group of people have delivered that value to the market—or, at minimum, to the next team that needs to keep working on it. Different teams will have to negotiate different commitment points and delivery points with their customers in order to come up with a measurable lead time that is not only relevant to their business, but, more importantly, one that acts as a baseline for realistic improvement. Measuring and trying to improve end-to-end lead time has the most impact on business agility. Sometimes, internal lead times are used, as the team is simply not in a position to make end-to-end improvements.
Work that is in a backlog, sitting prior to a commitment point, can often be considered an option. Any prior effort against those options should be minimal—just enough work to do some initial scoping to facilitate options analysis. Again, it’s important that teams, as well as customers of those teams, negotiate a commitment point based on the type of improvements they’re looking for.
Reducing lead time > increasing throughput
Whenever teams need to work in a complex environment, these are the things that help them most: getting things to market quickly, getting early feedback, continuous validation and any other form of early feedback. In most cases, the total value one can receive from a piece of work is reduced significantly per period of time that the solution is not in the market. In other words, time is your most precious asset.
Organizations that deliver value with an agile mindset constantly think about time to deliver value, and the impact of time on that value. The simplest description of an agile organization is one that continuously seeks to reduce the time between committing to the delivery of a value-creating idea and validating that idea by putting it into the hands of real customers.
Reducing delay time > increasing efficiency
Traditional thinking emphasizes effort. Most knowledge workers make estimates based on effort. They calculate the amount of effort it will take to deliver something, then compare it against the number of people who can do the work, and then use this information to create some kind of work breakdown schedule. With this type of thinking, the ideal approach is to try to increase throughput or velocity. Unfortunately, this usually translates into increasing the amount of work in progress. Increasing throughput has the side effect of increasing the time it takes to deliver. So, while more things may get delivered over time, the amount of time that it takes to get any one thing out the door increases. This delays getting real value into the hands of customers, as well as getting paid for that value.
Estimate lead time
If time is really our most important asset, then perhaps we should spend more energy estimating the actual time it would take to deliver an idea to market. This is often not a function of the effort, but a function of the amount of waiting required to move work across various teams, processes and stages. Delay and sources of delay is another item we should spend more time estimating. Following this mindset, improving time to deliver matters more than increasing effort, and consequently, removing delay matters more than increasing efficiency.
A simple practice to get folks delivering value with agility is getting them to estimate lead time and delay time. Take any team, group of leaders, executives, etc. and have them look at a backlog of work. This backlog can be at any level: sagas, epics or features (stories are probably too small). Have the group estimate the total time it would take to get various units of value into the market. Then have those same people estimate how much of this lead time would be spent waiting.
Estimate and attack sources of delay
Another key practice is getting those same folks to start identifying their biggest sources of delay and putting plans in place to remove them. Examining and removing sources of delay is something you can do whether you’re part of a “waterfall” or an “agile” organization. Delay typically occurs when there is an overall lack of alignment or focus within the organization. Typical sources include:
- different departments or teams have different priorities
- there is too much work in progress
- ideas are too big and take forever to finish
- teams are overly specialized, and work cannot be completed without a large number of handoffs
- people are rushing to meet preordained schedules, which lowers quality and results in a lot of rework
- too much time is spent in specification, planning and analysis
Putting all of this together, an agile organization does not focus on increasing throughput, maximizing efficiency or avoiding failure. Rather, an organization looking to increase its agility can begin by attempting to:
- reduce lead time
- deliver less at a time, but more often
- strike a balance between success and failure
- increase the frequency of customer insights with tight feedback loops
In the next post, I’ll discuss using imperfect information to keep things moving forward. Stay tuned!