Define "Value"#15

There are multiple areas where “value delivery” is mentioned as an ultimate goal.

For example:

“Scrum is a lightweight framework that helps people, teams, and organisations generate VALUE through adaptive solutions for complex problems”,

“The Product Owner is accountable for maximising the VALUE of the product resulting from the work of the Scrum Team”.

“The Product Owner proposes how the product could increase its VALUE and utility in the current Sprint”.

“The Scrum Master serves the Scrum Team in several ways, including:
<…> Helping the Scrum Team focus on creating high-VALUE Increments that meet the Definition of Done”.
However, what is “value” is quite unclear.

And considering the deep effort to explain such technicalities as Product Backlog management, inexperienced product owners too easily can be turned into “backlog monkeys” (because it’s unclear what to do with the value, while it’s quite clear what to do with the backlog).

So I propose to add more details to the sprint review part stating that “value can be defined by the actual user”,
and we should “evaluate if our solution actually helped the user to achieve one’s goal or not”.

I find “value” as the most important thing to define, because there is no point in being efficient if we are delivering things that nobody cares about. And still, the wording is difficult, so feel free to jump into the discussion and brainstorm other ideas on how we could bring more clarity to the definition.

I find the ‘Elements of Value Pyramid’quite useful cheatsheet. When I coach a PO we can run through PBIs to clearly define hypotheses: Once this PBI becomes an increment of value how will it:

• save time
• reduce hassle
• reduce cost
• increase quality
• simplify things
• provide access
• provides information
• connect things/people
• make money
• reduce anxiety
• reward me/us
• make it more fun
• motivate
• provide hope
• etc.

How can we learn this to be true?

I don’t think the SG should state what value is or who determines value. I think it would be good if the SG states that team and stakeholders should agree upon what value means.

“Value” is very much context-dependent. What is value for one organization in one specific situation might differ 180 degrees to another context. The Scrum Guide can’t prescribe one and can’t cover all.

I like the idea of the Value Pyramid, Sjoerd. And yet, any of these elements remain our hypothesis of how we gonna create value. And it can only be proved once the users confirm it. Maybe as Willem suggested, we could just propose to agree on what value is within the organization first.

@Agnė Kel
Yes the Product Backlog contains hypotheses (definitions of Unrealized Hypothesized Value). EMB for Scrum contains a good framework with definitions and approaches for value.

I have the impression that many are deliberately blurring the notion of value. It seems obvious to me, that you can’t “maximize value” if there is no conversion algorithm, that allows you to compare different “types of value”.

It is worth noting that the theory of value, what value is and how it can be created, is the foundation of economics. And it is agreed that the USD is, as the world’s reserve currency, a heuristical quantification of value.

I realize that applying this approach to products would be at least debatable, however, it’s hard for me to find a better candidate ;)

@Pawel Huryn the exchang of a currency is ultimately the result of something that people value. Whatever is it that people are benefiting from or experiencing that ultimatly results in the exchange of a currency, is ultimatly what value is. We do many things in life we value without exchange of USD or defining it in USD. Value is not always and only expressable in numbers either. The human experience is richer then only an expression in currency.

@Pawel Huryn Purpose trumps money. When you work for a company, sure, they aim to make money. But they do make money through a certain purpose. That’s why different companies make money in different ways. Why did the founders of the company choose that specific way? Did they just do what they did only to make more money? They could make money a bazilion ways, why that way? what drives them? what value did they deliver that people were willing to pay them money?

Why do employees choose to work for one company and not the other? why not just the company paying the most? There are other drivers in life, business included as business is part of life and other things we value.

The human experience is more than that. We value lots of things. Money and currency remain a means, not and end. One can be loaded with money, but if it had no purpose, motivation or meaning, there would be nothing to spend it on. You’d just be hoarding it, not spending it and you’d end up being a dragon resting on an idle treasure.

A company has more reasons for being than just money. It serves other purposes in society too. Believing that its all about money is insensitive to what ultimately makes us human. That’s a truth in life and business.

@Sjoerd Nijland Thanks for your comment. My intention was to describe the reality I encountered without judging it. I share your views and values, but it doesn’t change my experience with C-level.

I’m not sure whether we can figure out someting better than USD, and if we are not able to compare different types of value, maximizing it is “challenging”.

I need to think about it and make some research.

Scrum tells you what to do, and not how to do it. Defining value is what you have to do. How do you go about? It is up to you!

Having worked with many organisations, I have found that there is massive differences in what value is. It will be near impossible to specify.

The dictionary description of Value is sufficient - “the regard that something is held to deserve; the importance, worth, or usefulness of something”

@Brett agreed, value is unique to the organization. But I struggle with the vague ‘deliver value’ concept can be abused in the name of Scrum or Agile.

@Michael Connolly said “But I struggle with the vague ‘deliver value’ concept can be abused in the name of Scrum or Agile.”

That is also very common. However, lets use the Scrum framework to reveal this and have professional-to-professional conversations with the stakeholders. The best place for this will be the Sprint Review, lets reveal the question of “what does deliver value” mean to everyone and facilitate an inspection to people come to a shared understanding.

Let’s use empericism (transparency, inspection and adaptation) to cause positive change. This will require a SM to facilitate the conversation. I would suggest using several liberating structures depending on the people to remove this.

I also work closely with the PO as it is their accountabiliy and help them better the messaging of it.

It is not hard to do, but it requires some robust and productive discussions. Some people cannot have these conversations, so work on that problem first to create an environment where people can talk openly without being shot down.

Notice, I am simply using Scrum to raise transparency, inspect and adapt the understanding of “Value” with all involved. A good conversation to have as it helps improve commitment and focus.

@Brett agree with your comments and approach, the problem is that rarely is a SM ever afforded the opportunity to have these conversations or worse the SM is really just a relabled Project Manager who has no skills in leveraging Scrum to produce the evidence we need for change.

This of course is not the fault of the SM but of the organizations who don’t hire and train people to be effective SM’s.

My approach using Scrum involved building 3 Pillars, Transparency, Accountability and Predictability. Having a clear understanding of what value is allows teams to become accountable and predictable because the flow of work to them is transparent and predictable.

Value is always financial gain. No matter how you slice it.

Sjoerd Nijland I’ve been thinking about it for some time. In my opinion, products exist primarily for the customers, and creating value for the business should be a result. Can we agree on that?

I would exclude employees of the development organization, their goals, and their well-being from the conversation, as Product Backlog items are rarely about creating value directly for them. Taking care of employees is essential for any long-standing business, but the Product Backlog is not the right tool to address those issues.

Of course, people start businesses to solve specific problems in specific areas. Their motivations are not purely commercial and contribute to the product vision and product boundaries. Having said that, I’m not sure if this should be considered when talking about the Product Backlog. I see those as constraints that limit a solution space. Inside this space, we still need to maximize the value.

I found this definition. It’s quite interesting:

“In a LEAN context, and as per the LEAN Lexicon, value is the “inherent worth of a product as judged by the customer and reflected in its selling price and market demand””

Source: https://medium.com/theleanreview/what-is-value-in-lean-fe8ab9411314

From the POs perspective, we need to include costs, as no commercial company can afford to create value for customers without a profit (for example by offering the product for free). It does not necessarily mean maximizing profit, but at least a perspective of a positive cash flow.

To sum it up, it seems to me that in commercial products value for the customer can be expressed in USD, value for the development organization not necesarily. For that reason, after consideration, USD is not a universal determinant of value that companies maximize.

What are your thoughts?