What is value?

As we work with our own model, we feel confident and comfortable prioritizing work based on the value we expect it to deliver. This is not an exact science but if gives the right direction. And the more we use it, the easier it becomes. Not only easier but also better. We get challenged on the value we set by our stakeholders and need to backup our assumptions with data. So we value our work better and better every time. We grow!

The Value Bucket Model

We did a post on the Value Bucket Model before in more detail. The model prioritizes work on score and this is calculated by value divided by work size.
Value defines what it brings to the organization in terms of money, cost, customer happiness, efficiency and such. Work size is not a direct money parameter, but the time one or more teams are busy to deliver the value (or make it possible).

Is it hard to define value?

As it turns out, starting from scratch with value, can be daunting. As we talk to more and more organizations interested in our solution, the one thing holding them back is actually getting started. This was a surprising learning for us, since we think it is a no-brainer. Thankfully our customers feel the same way and only need a small nudge in the right direction to get going. This post is meant for all of you that we can’t nudge personally (let us know if you need it, we’re more than happy to help out).

Value Parameters

There are a lot of papers and blog posts that write about value. Most people think of money when it comes to value and although it probably is an important component, it certainly is not the only one. Perhaps not even the most important. That depends on what your organization values most. We will try to give an extensive list of possible value parameters (we call buckets) for you to choose from:

  • Revenue
  • Margin
  • Profit
  • Reducing costs
  • Customer satisfaction
  • Efficiency
  • Risk
  • Compliance
  • Cost of delay
  • Opportunity cost
  • Innovation
  • Sustainability
  • Impact
  • Continuity
  • Reducing technical debt
  • Urgency
  • MoSCoW

If you have additions to this list, let us know and we’ll update this list.

Choose the initial set of parameters

It is not needed to use all forms of value for your own model. We advise to start with 5 or 6 of them that are important for your organization to answer the question for any initiative you have: why?

Value scales

Knowing which value parameters to use is one thing. A big step. Congrats.
There is however one other thing to be able to define value: setting the scales.

The easiest way to start is using t-shirt sizing: XS, S, M, L and XL (or with number 1 to 5 or use Fibonacci scale: 1,2,3,5,8,13,21….). Soon you’ll learn that this opens the door to opinions and that is something you don’t want. Try to become as objective as possible. Sometimes that is really hard or even impossible. The goal is to use something everyone can understand, interpret and use.

Evolve

Once you have started the discussion will come. And that is a good thing! This means people are trying to improve (although they will probably start trying to get around the value system to get back to their old self and keep guessing). The discussion whether you are using the right buckets or missing some takes your organization to the next level every time. Improving on the scales once someone thought of a better way of making them (more) objective: perfect. Your organization is learning.