estimates

How often has someone on your team said “We should prioritise by business value” ?

How often have you heard someone say “We should do the biggest bang for the buck” ? – “lets find the quick wins which deliver the most value” or “Lets do the 20% that delivers 80% of the value.” The more studious people may call it “cost-benefit analysis” but it amounts to the same thing.

Yet while teams are quick to assign effort estimates – hours, days, story point or some other unit of measurement – very few teams add a value figure. When you think about it – and you only need a moment here – how can you do cost benefit analysis if you only know the cost? Without a number any attempt to “prioritise using business value” is likely to end up in decibel prioritisation, he who shouts loudest wins.

In fact, it is quite easy to estimate value in the same way we estimate effort. I’ve started including this in my product leader training workshops a few years ago and have seen game-changing results when used with clients. In one case estimating value allowed a client to remove more work in two hours than the team had delivered in two sprints.

Here I’ll describe how to play the game, the next post will describe the benefits and how to exploit values once you have them.

In the past I’ve improvised with value poker cards but the good folk at Agile Stationery have created a dedicated deck with 6 colour coded sets of cards.

I like to set the game up like the TV show Dragon’s Den – Shark’s Tank in the USA and other names in other countries. On TV four or five investor “Dragons” sit on one side of the room while a series of entrepreneurs (usually in pairs) pitch their product for investment. After the pitch the Dragons get to quiz the entrepreneurs and, after a little negotiation, may decide to invest in the product.

In my version the entrepreneurs are played by a pair of product people – these might be Product Managers, Product Owners, Business Analysts or someone else who works on the “what should be build” question. They start by pitching the product, or if the product exists, the goals of the next increment.

On the other side of the room sit my Dragons. These might be senior managers, other product leaders, actual customers or the engineering team who will build the product. Each role brings its own take on what is happening and adds value so don’t feel that you don’t have the right people.

As in the TV show the Dragon’s listen to the pitch and ask questions. Once everyone understands the product – or increment – is going to do the game differs a little from the TV show. Now the product leaders switch to pitching individuals stories – I say stories but these might be epics, features, functions, capabilities, or whatever the unit of work is that your team use. I’ll call them stories for now.

I take one of these stories – one I think is low value, preferably the lowest value. I hold it up and read it to everyone. Next I take a pen and write “10,000bp” on it, I tell everyone that this story is worth 10,000 business points – sometimes I invent a currency on the fly, perhaps the London Dollar or the Swedish Franc. It is important that the currency is not real, if it was people would argue about the valuation but it is the ratio between values on stories that is important not the actual number itself. Finally, I post the card where it can be clearly seen – on a wall, whiteboard or flip chart.

This done I hand each dragon a set of value poker cards. Each set contains about a dozen cards ranging in value from zero to one million.

Switching back to the entrepreneurs, one reads out the story, adds any description they think helps and the dragons reply with questions. When everyone has a good understanding of what the story is I ask the dragons to put a value on it.

As with planning poker dragons are asked to select up one playing card to indicate the value they put on the story but initially keep it secret. I count down, “3, 2, 1 – show ’em” – the dragons reveal their cards.

If there is a wide variation in votes – say three people vote around the 1,000bp mark and one 10,000bp we might have a discussion followed by a revote. More often than not I simply average the scores and write the value on the story card. For example, if four Dragons have voted 500, 1000, 2000 and 10,000 I might write “3,375bp” on the card. I then post the card on the wall relative to the others. So, a 3,375 card would be below a 10,000 card.

Usually I will impose a No Duplicate Values rule so if the next card also comes out at 3,375 I’ll ask the Dragons “Higher or lower?” We’ll adjust the value a little, say up 3,500 and place it higher.

We keep going through all the stories the entrepreneurs wish to value. Usually the second product leader will be selecting the stories they think will get a high value and feed them to the first. Sometimes they will write out new stories to cover ideas which have come up during the game play.

At the most basic levels the values suggest the order of work. Yet actually, as I’ll discuss next time, there are a lot of conversations that can now be had which were not possible before.

One time I did this exercise with a client team. The Product Lead from my team had already divided the stories into Must, Should and Could and the clients were asked to value only the Musts. Still, several stories came out with zero value. The Product Lead might have seen them as must haves but the client didn’t give them any value. Sadly, those stories represented more work than the engineering team had done in total over the last few sprints.

Next time I’ll write more about the benefit of putting value on your stories.

In addition, to Milton Keynes tomorrow I have tentative plans to run this session at events in London and Oxford later in the year, more details to follow.

And finally, if you like the idea go and get yourself some value poker cards – or, invite me to run the game for you, just get in touch.