Analyzing the Current State of Value Creation at Your Organization
By Matt Ring ,Jeff Gallimore ,Betty Junod ,Andrew Davis ,Dwayne Holmes
This post is excerpted from the DevOps Enterprise Forum paper “Measuring Value: Navigating Uncertainty to Build the Right Thing for Our Customers and Our Business.”
The ability to organize and motivate different groups of people toward a common goal requires clarity and specificity in the mission and a shared understanding of both the current state and future state. Understanding the destination is only helpful if you also know where you are today. When planning a trip, understanding the difference between where you are and where you want to be helps you decide what you need to do to get there. Which direction am I going? Can I walk there? Do I need to take a car? A boat? Airplane? Space shuttle? Am I traveling alone or with others? Does it include kids or pets? The answers to each of these questions inform decisions on how best to reach our destination.
This same concept applies when pursuing business, product, or initiative goals. We may have an overall target state with strategic intents, but we also need to understand the current state of our business and/or product(s) so that we can make more informed decisions about how to best achieve our goals.
Are We Building the Wrong Thing?
It is not uncommon, especially in IT, to be handed solutions to build from elsewhere in the organization. This is a symptom of traditional, order-taking IT organizations. At some point, somebody in the organization (hopefully) understood the problem or opportunity being pursued. But we also know that as much as 50% of knowledge is lost in every handoff, and it should not be surprising for the knowledge of the problem to be lost when initiatives are handed off between departments and down from leaders to teams.
With the shift from projects to products, the promotion of more autonomous, empowered teams and the increasing complexity of software solutions, organizational clarity around the problems to be solved is more important than ever. Understanding the problems to be solved (for the user, customer, and/or organization) provides the necessary context for teams to align any future decisions they make regarding solution exploration and implementation, and further ensure that the wrong thing is not being built sooner, safer, and happier.
Find the Signals for Your Product’s Health
When we think of the health of our digital products and solutions, technologists may immediately look to quality metrics like availability or system performance, or flow based delivery measures like lead or cycle time of features or software changes. And while those are useful measures of how the system or team itself is performing, they don’t tell us whether the product is producing value. They don’t indicate whether anybody is actually using the product or feature, if they are satisfied with it, or whether they’ll continue to use it in the future.
When exploring the overall health of a product or initiative, it is important to look holistically at both the performance of the product or system as well as what value it is producing— for our business, our customers, and users. This is where the BVSSH (Better Value Sooner Safer Happier) model from Jonathan Smart shines—in providing a holistic picture of the signals of product health.
The BVSSH model contains two sets of outcome-based signals, as depicted in the outer and inner loops:
- Better Sooner Safer Happier are the how outcomes. These measure the performance of the system of work, be that a product team, product value stream, initiative, etc.
- Value represents the what outcome, the hypotheses and bets that make up our OKRs and backlogs about what we think will be valuable to the consumers of our products and services and to our business.
It is important to measure holistically across both sets of outcomes. If we only focus on the how outcomes, we risk getting really effective at delivering a bunch of software changes that may or may not positively impact our business and product goals. And, while much has been said and written in the technology community about ways to measure the how outcomes, measuring value has been a bit more nebulous. This is where we can look to our peers in the product management community to help inform us further.
Find the Signals of Value
As mentioned earlier, focusing on outcomes (the human behaviors we’re trying to change) helps us connect the dots between output (the software changes we release) and impact (the business results we’re after). While the specific measures will likely vary from product to product, initiative to initiative, we can leverage some common frameworks to help us identify specific types of signals to look for, as well as create a common language to use across teams and the organization. Two common product success metric frameworks that can help us identify measures of customer behavior include Pirate Metrics, created by Dave McClure, and Google’s HEART Framework, created by Kerry Rodden.