What does the 1st Agile Principle (Satisfying Customer with Valuable Software) look like in Action?

Many want to go Agile or claim to be Agile. The question is, are you and will you really align with the Agile values and principles?  To better understand what this means, I dissected the Principles to better discover the intentions behind them and what behaviors they entail. In this article, I expand on the first Principle and attempt to model how to marshal supporting evidence that a culture change may be occurring.  

Our highest priority is to satisfy the customer through early and continuous delivery of valuable software is the first Agile principle.  Satisfying the customer means delivering valuable software in a timely manner (that is, in the market window) for a reasonable cost. Continually striving to meet elusive customer value is important. Ultimately, the key measure of value for customers is an increase in sales and the continued loyalty of existing customers. 

How do you know that you are moving in the right direction of building value? It starts with understanding your customers: who they are and what motivates them. Their profiles include such information as their challenges, their vision for your product, and their buying trends. 

Delivering value continues with an effective sprint review process where the customer gains an opportunity to review and provide feedback on working software. If customers can sense that their input is valued during the demos, their satisfaction can increase. This is particularly true if the customers see that their feedback from the last demo has been incorporated in the working software of the current version. 

In addition, it is beneficial to use the Business Owner/Product Owner (PO) as the delegated voice of the customer to solicit acceptance criteria on what the customer would expect when they see a particular requirement or feature in action. You may also conduct periodic customer surveys to gauge their level of satisfaction with the product or solution. 

What actions exhibit “satisfying customer with valuable software”? 

• The PO works to understand customer value, constantly prioritizes and refines the backlog, and discusses customer needs with the team. 
• The PO creates customer profiles to recognize motivations. 
• The backlog is your single source of requirements (aka, value). 
• The Customer vision reflects how you wish to engage your customers. 
• Business Strategy focuses on delighting the customer. 
• Customers are an integral part of Reviews to provide feedback and validate value. 
• Acceptance criteria are been captured and met for each user story. 
• Customer satisfaction surveys are periodically conducted. 
• Customer revenue metrics are captured and reviewed.  

It is up to you to determine what supporting evidence will highlight that a culture change is occurring. It is worth experimenting with as it will help you better understand and embrace the Agile principles. The final question, if you really believe in this principle, do you believe in continuous customer engagement, adapting requirements, and validation as a means of building valuable software to satisfy the customer? 

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Learn more about what other Agile Principles look like in action:

• 2nd Agile Principle (Welcome Change to Requirements) at: https://cmforagile.blogspot.com/2024/01/do-you-have-evidence-to-support-2nd.html
• 3rd Agile Principle (Frequent Delivery) at: https://cmforagile.blogspot.com/2024/02/what-does-3rd-agile-principle-frequent.html
• 4th Agile Principle (Business and Development Work Together) at: https://cmforagile.blogspot.com/2024/03/what-does-4th-agile-principles-business.html
• 5th Agile Principle (Motivated Individuals who are trusted) at: https://cmforagile.blogspot.com/2024/04/what-does-5th-agile-principle-motivated.html

Company Success with an Enterprise Pipeline of Ideas

The Enterprise Idea Pipeline provides you with an end-to-end view of the flow of ideas from the moment they are recorded to when they are released.  It is meant for the enterprise to respond to high value ideas the moment they came so the enterprise does not miss the idea’s window of opportunity.  

It provides three primary benefits to an enterprise.  First, it is a channel that provides an end-to-end flow of ideas from the moment they are recorded to when they are released and reflected upon.  Second, it is the enterprise level portfolio backlog of ideas.  Third, it is meant to highlight high value ideas the moment they came in so that the enterprise does not miss the idea’s window of opportunity.  

The culture needed for the Enterprise Idea Pipeline is one where the enterprise immediately considers ideas as they come in because they are based on a current problem or opportunity.  You don’t wait for the next budget cycle to consider the idea. The pipeline is a more adaptable way of managing the portfolio of work across your enterprise since ideas can be admitted anytime and feedback may adapt its priority or reshape the idea.  Also, the pipeline brings enterprise-wide visibility and transparency to the work occurring within an organization.

Before moving further, what is an idea?  An idea is something that is deemed as valuable and has yet to be created.  The moment it is recorded, it may be small or large.  Depending on its level of customer value, it may become work that is worthy of evolving into a product or service or a significant feature of each.    

The pipeline is a working example of the delivery axis focused on delivering customer value as illustrated above. As the delivery axis represents the end-to-end flow of customer value from the recording of the idea to the point where it is released and reflected upon so is the Enterprise Idea Pipeline. 

The Enterprise Idea Pipeline can be known by different names such as a portfolio backlog, enterprise kanban board, and idea pipeline. What makes them all similar is that they hold the big ideas that may eventually (or immediately) be worked on by teams.  The Enterprise Idea Pipeline acts as the parent and feeder to all product backlogs and helps you connect strategy and ideas to user stories (and even tasks) and visa-versa.  

The pipeline is primarily used in medium to large companies, when visibility is needed to make investment decisions across portfolios to better understand where the highest value work lives.  It also helps when there are dependencies across multiple products, or when ideas do not have an obvious resting place in a product backlog.  When an enterprise is small and made up of a singular product, then the product backlog acts as the enterprise idea pipeline as these are the ideas that may be included in the future of that product.  

To learn more about applying an Enterprise Pipeline of Ideas in your company so you can be more customer value driven, feel free to reach out to Mario Moreira at: https://www.linkedin.com/in/mariomoreira/

Good and Bad Reasons for Moving to Agile

There are various reasons behind moving to Agile. Some are proactive and some are reactive. Proactive motivations tend to be accompanied by a greater understanding of the business benefits of Agile and the culture change it implies. However, this is not always the case. The reasons behind the motivation can determine your chances to achieve a real transformation. Let’s take at a notional proactive-reactive model that looks at some motivations for moving to Agile and what you can do to enhance your chances of gaining the business benefits of doing so.  

• "It’s the trendy thing to do." Agile is popular, so we should do it. This is reactive and not a strong motivator for change. When another trend comes along, Agile may be abandoned. Agile may be seen as a hollow initiative and some may wait it out to see if it will go away. It will be important to investigate the benefits of Agile to see if it is right for you. Then determine if real commitment can be gained. 
• "The competition is doing it." Others are doing it, so we better do it. This is reactive. Although it may provide a driver for change, it does not provide clarity on why Agile was chosen. Some will question why what a competitor does is good for us. What happens when they do something else? It will be important to investigate the benefits of Agile to see if it is right for you. 
• "We need to reduce costs." This is a reactive and insufficient reason whereby Agile is seen as a tool to cut costs and maybe the workforce. This will not lead to the business benefits of moving to Agile. Although it may be an outcome, other benefits of Agile may be gained if you are willing to adapt the culture. 
• "What we have isn’t working." We’ve been using another process to deliver software and it isn’t effective. This is a reactive reason with little understanding of Agile, but it may provide an initial motivation for change. However, moving to Agile without understanding what it takes may lead to a failed deployment. It is best to understand the root cause for the failures in the past, because this can affect your change to Agile. 
• "We hope to increase employee morale." This is a proactive reason based on an understanding of the importance of employee engagement and empowerment to improve morale. Validate that there is real commitment to empowering employees and self-organizing teams. 
• "We hope to improve productivity." This is a proactive reason when the goal is to empower employees and help them improve productivity. The danger is that management may believe that Agile is something someone else must do to increase productivity or the real intent is to make employees work harder. The other challenge is that productivity may come at the expense of sacrificing quality. It will be important to investigate all of the benefits of Agile, not just productivity. 
• “We aim to decrease time to market.” This is a proactive reason in which Agile is seen as a way to shorten release cycles. If there is an understanding that this implies a change across the organization to get from market idea to release and it is meant to satisfy the customer, then this is a good starting point. It is still important to discuss the benefits of Agile to see if it is right for you. 
• “We want to deliver customer value.” This is a proactive and genuine reason if Agile is seen as a way to engage the customer and understand value. Validate whether there is a real commitment to delivering value and an understanding of the need to change organizational behaviors and processes to get there .
• “We believe in the Agile values and principles.” This is a proactive and genuine reason where Agile may be seen as a positive change in company vision and behavior. Validate a drive toward continuous customer engagement and employee engagement that can help gain the business benefits that Agile can bring. 

In all of these cases, you need to validate commitment to the values and principles and the culture and business change it entails. Once the initial motivation is understood, we can work to adapt it with the goal of better gaining the business benefits of going Agile.  

Requirements Tree: Focusing your efforts on the highest value work

Requirement is a nebulous term.  It can mean something large like a strategy, to smaller items like features, user stories, or tasks. People often throw around the word requirement without a strong sense of the type of requirement it is or the level it belongs. It is important for clarity and common understanding across organizations and teams. Otherwise, it can be quite confusing as to which level people are discussing. 

To gain this common understand of the various levels of requirement, I recommend starting by establishing a requirements tree.  It is a structure that represents the relative hierarchy amongst various requirements elements within your enterprise. It makes it clear how requirements levels are connected. For example, a feature is a requirements element that is at the larger than a user story, so I would expect to find multiple children (aka, user stories) to the build a feature.  Think of it as your requirements lineage. 

What are advantages of creating a requirements tree? First, it ensures that requirements elements at the lower level (aka., the children) are aligned to higher level and presumably high value requirements elements. This ensures that you are putting all of your company’s effort on the highest value work. Second, it helps you determine if there are random requirements that made their way in through a back door.  Third, the requirements tree provides context of the level of requirement being discussed and traceability in the hierarchy.  

What are the various requirements elements and hierarchy? There is no industry standard group in either and they can vary from enterprise to enterprise. The key is to establish yours.  I like to start with corporate strategy and end with tasks as illustrated in the figure. 

Once you establish the levels of your requirements tree, it is important to craft a definition to describe each level.  Using the requirement levels from the figure, here is how I describe each level.  A strategy sets  direction for the enterprise.  An idea is a high customer value and outcome-based opportunity.  An increment is an end-to-end slice of the idea to provide value and validate of the idea.  An epic is a function or feature.  A user story is a requirement that fits into a sprint of a week or two and has one persona.  A task is a very small unit of work that incrementally builds the user story. 

In addition, when you have the requirements tree and definitions of each level, you can align roles of who should be working on those levels with expectations and outcomes of each level. 

You may notice that instead of putting the strategy on top, I place it on the bottom.  I do this to represent the strategy as the trunk of the tree as this should provide guidance for how the smaller requirements elements (e.g., ideas, increments, epics, user stories, and tasks) should grow. While your strategy may adapt over time based on customer feedback and the changing marketplace, it should guide the type of work you may consider working on. 

The key to your requirements tree is for you to establish one that makes sense for the type of work you do.  For example, if you only have one division in your company, then a division strategy isn’t necessary.  You may also work with business requirements so place them in the right level for your tree. Those that may consider creating a requirements tree are a combination of executives, portfolio, product owners, and team members.  Once crafted, it should be shared with everyone for a common understanding and a way to validate that the work at the team level is aligned with the highest value work.

Note: For more information on the Requirements Tree, read Chapter 15 of the book "The Agile Enterprise". 

 

Who really is the Customer?

As straightforward as this question may seem, it engenders a wide variety of answers that tend to be murky. The real answer is clear. A customer is someone who has a choice on what to buy, external to the company, and a choice of where to buy it.  As it relates to your company, a customer pays you with money to help you stay in business by purchasing your products.  For these simple factors, engaging the customer is of utmost importance.

Most companies like to say that "customer is king" and some indeed are.  But if you ask those in a company when was the last time they actually talked to customers, many say rarely or never. As bizarre as it may sound, there are challenges that companies have in relation to engaging with customers.

The first challenge is that the term “Customer” is being applied to a number of people “internal” to the company who are not really Customers. This means they don’t pay and bring revenue to the company. Instead, they are really internal stakeholders or partners. When you incorrectly title someone a customer when they are not, then when you apply Agile, it will not really be customer value-driven as you are not using actual customer feedback to drive toward customer value.

The second challenge is that some companies do not really engage their customers to get their feedback to understand what they find valuable.  This is often for two reasons. The first is that there is pretend or arrogant certainty from those in the company on what they think is customer value so they don’t really think they need to engage with customers. The second is that the company optimizes for sticking with the plan over adapting to customer feedback. In both cases, this prevents the opportunity of gaining valuable customer feedback. 

The key to engaging customers is to gain their valuable customer input and feedback.  The input and feedback should be the basis for driving a majority of your decisions and setting the direction of the product. As you look to build a customer value-driven engine within your enterprise, the customer or more specifically, customer feedback, is the “driver” that steers the engine of customer value.  The more you incorporate the customer at the center of your company, the more likely you will have satisfied customer and greater business success.

Learn if you incorporate customer feedback with the Empty Customer Chairs technique at: 

http://cmforagile.blogspot.com/2016/03/empty-customer-chairs-illustrating.html

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Top 5 ways to adapt your Agile Enterprise for a better Year ahead!

A New Year is upon us!  What is in store for 2018?  Better yet, what changes might you apply for a better Agile transformation and better business outcomes?  Here are a few to consider.

1) Focus more (much more) on the Agile mindset and the Agile values and principles.  Without this, people aren’t quite sure whey they are implementing the Agile mechanics (practices and tools).  Ask your employees if they know why they are applying the Agile methods and practices.  If they don’t really know, more strongly relate them to the Agile values and principles. 

2) Place Coaches high enough in to make a difference.  Placing them too low in an organization will give them little or no influence to change anything that matters.  Gauge your current placement of Agile Coaches and determine if they have the right access and influence to leadership.

3) Ensure leaders in your organization are educated in Agile.  Provide a combination of the Agile values and principles and Agile concepts, mindset, and practices that will help them support and lead an Agile transformation.  This includes understanding and establishing a high performing Agile workplace.

4) Focus on the employee side of Agile and what it takes to build a high performing team.  This includes establishing psychological safety, demonstrating servant leadership, creating a culture of self-organizing teams and even self-management, introducing continuous peer-to-peer feedback loops, and more. 

5) Become totally customer-value driven. Stop doing Agile for Agile’s sake and focus on the customer benefits.  Bring a customer mindset to Agile.  This means more closely identify with your customers (e.g., personas) and capture and apply more customer feedback along the way. 

I will go so far to say if you don't do anything else this year but these, you will have a stronger Agile enterprise that brings you more aligned with building high value products and services.  Give them a try!

Learn more by reading The Agile Enterprise.   

Embracing Agile in Tunisia

In October, I had the honor of being the keynote at the first Agile conference in Tunis in the past 4 years (generously sponsored by Vistaprint).  While I was grateful for the opportunity, seeing the number of the attendees from different fields highlighted the attention that Agile was getting in this growing Tunisian economy.  I was impressed by the quality of the professionals and students that attended, coming from a range of companies, government agencies, and universities.
 

My keynote was entitled the “Foundations and Future of Agile”.  You can watch the session here. I started my session by asking the question, “Who do you want to be.”  The intent was to get the audience to consider if they can be more than who they are today and make a commitment to Agile as they approach the future.  I followed this up with, “Who do we want Tunisia to be”?  I provided a vision on how Tunisia can be the pride of Africa. I challenged the participants to become the leaders in Agile and the customer value drive mindset.

To begin the “foundation” portion of my session, I focused on the Agile Values and Principles.  I find that too many companies lead with mechanics and forget the mindset of embracing the values and principles.  Leading with the mindset will remind people why they are doing agile in the first place.  As I shared each principle, one at a time, using a roman voting technique I asked attendees if they believed in each principle. I was pleased to see that there was a strong belief in embracing the principles.  This bodes well for their ability to apply Agile methods and practices and the future of Tunisia. 

As I moved into the “future” portion, I shared the importance of becoming customer value-driven.  I suggest that Agile shouldn’t be done for agile’s sake but instead the goal should be to build a customer value-driven engine. It is the customer who we are serving and who we want to make successful.  As they succeed, so will our business.  I shared the modern concepts of the enterprise kanban, customer value canvas, cost of delay, story mapping, and customer feedback loops.  I wove in the discovery mindset including incremental thinking, psychological safety, and, self-organizing teams.
  

I ended the session by asking again, “Who do you want to be? What is your role in building a greater Tunisia?”  With such potential in the audience from everyone I met, I can understand why some companies are already setting up development centers in Tunis such as Vistaprint.  I ended with asking all of the participants to make a commitment to explore in more detail one of the Agile concepts or mindset elements they learned today.  Almost everyone’s hand went up.  This will help make for a better future in Tunisia. I’m looking forward to it!

Note: In addition to my session, the conference included a session by Antonio Gonzalez on “The Role of an Agile Leader” and by JP Beaudry on “The Vistaprint Agile Journey”. Special thanks to Nawel Lengliz and Rahma Arfa for coordinating such a great event and to Walid Abdelaziz for sponsoring the event!  

Outcomes Matter in an Agile World

The primary outcome of Agile is achieving better business results. This is why outcome based measures are much more aligned with Agile then output measures. Output measures focuses on how much you delivered, while outcome measures focus on the results of what you deliver.  It is the results (aka, the outcomes) that matter. 

Outcome based measures are drivers to help you understand business success.  You may still need some output measures to help you on your way.  Just ensure that they are relevant to help you determine if you are reaching the outcomes you are looking for.  The output could be the delivery of a release or the number of releases.  The outcome is how many customers either bought or used the product release.  Often times people focus on outputs because they tend to be easier to measure or are a carry-over from a more traditional mindset.  

The danger of focusing on outputs is that you may have a high number of outputs with a low number of outcomes.  Outcomes are what drive business success. As illustrated in the chart, it appears that the output of the 4th quarter is best.  However, if you look at the outcomes chart, the 3rd quarter is better with revenues of $80,000 instead of only $20,000 from the 4th quarter. While the output of four releases sounds good, $20,000 is not favorable to good business results. Outcomes  ask you to measure different things, with a particular focus on customer value.

In addition, an outcome focus changes our perspective from internal to a customer or external focus.  This helps us better understand what we are aiming for in the customer value-driven world we need to establish. So next time you are considering measures of success, just remember that outcomes matter!

Worth Reading: The Agile Enterprise: Building and Running your Agile Enterprise - for better business results

Imagine an enterprise where everyone focuses on the highest customer value.  Where strategy to tasks are visible so everyone knows if their work is aligned with the highest value work. Imagine an enterprise where a discovery mindset wins over certainty thinking. Where experimentation with increments and feedback help define the way toward customer value.

Imagine a company where employees use 100% of their brain power to self organize around the work and be trusted to think of better ways to work. Where leaders encourage employees to put customer value first.  Imagine an enterprise where customers embrace the products and services being built because they are engaged in the building of the work all along the way.

If you can imagine it, it can be yours!  In this unique and cutting edge Agile book, veteran Enterprise Agile Coach Mario Moreira, will guide you to build and run an Agile enterprise at every level and at every point from idea to delivery. Learn how Agile-mature organizations adapt nimbly to micro changes in market conditions and customer needs and continuously deliver optimal value to customers.  Learn cutting-edge practices and concepts as you extend your implementation of Agile pervasively and harmoniously through the whole enterprise for greater customer value and business success.

Readers of The Agile Enterprise will learn how to:

• Establish a Customer Value Driven engine with an enterprise idea pipeline to process an enterprise’s portfolio of ideas more quickly and productively toward customer value and through all levels of the enterprise
• Incorporate the Discovery Mindset; experimental, incremental, design, and divergent thinking; and fast feedback loops to increase the odds that what you build aligns more closely to what customer wants.
• Leverage Lean Canvas, Personas, Story Mapping, Cost of Delay, Discovery Mindset, Servant leadership, Self-organization, and more to deliver optimum value to customers
• Use continuous Agile Budgeting and enterprise idea pipeline at the senior levels of the enterprise to enable you to adapt to the speed of the market.
• Reinvent Human Resources, Portfolio Management, Finance, and many areas of leadership toward new roles in the enablement of customer value. 
• Establish a holistic view of the state of your Agile Galaxy from top-to-bottom and end-to-end allowing you to understand where you are today and where you’d like to go in your Agile future.
• Be truly Agile throughout the enterprise, focusing on customer value and employees over all else.

This book is geared for: Sponsors of Agile Transformations; Executives and Senior Management; Agile Coaches, Consultants, and Champions; Portfolio Management; Project Management Offices (PMOs); Business and Finance; Human Resources (HR); Investors and Entrepreneurs; Scrum Masters, Agile Project Managers, and Product Owners. 

This book concludes with an adventuring through an Agile Enterprise story that shows you how an enterprise may transform to Agile in an incremental manner with materials in this book.  Let the material in The Agile Enterprise help you achieve your successful customer value driven enterprise.

Thank you to the contributors JP Beaudry (on Story Mapping) and David Grabel (on Cost of Delay)!  A special Thank you to the Apress editing team!

Four Anti-Patterns impacting Customer Value

Value is in the eye of the beholder.  Smart people will say that the beholder is the customer. While in most companies there will be a similar saying to the “customer is king”, some have lost their way and have somehow forgotten the importance of customer and their feedback.  The result is organizational anti-patterns that impede successfully getting to customer value. There are a number of anti-patterns on why this occurs and below are four: 

• Known as Pretend Certainty anti-pattern, this is believing that you can pretend to know with certainty what the customer wants upfront.  The danger: the consequence of limiting options and being blind to customer feedback to shape product direction.  
• Known as No Room at the Innovation Inn anti-pattern, this is focusing primarily on driving efficiencies through cost cutting and high resource utilization.  The danger: the unintended consequence of a lesser focus on the customer with little room to innovate and adapt. 
• Known as Sub-Optimizing for Comfort anti-pattern, this is sub-optimizing for the comfort of having a well-established plan and set of well-defined processes.  The danger: the consequence of restricting change at the expense of adapting to customer needs.  
• Known as The Few and the Missing anti-pattern, this is engaging few to represent the whole.  The danger: the consequence of understanding customer pool, ignoring potential customers, and missing customer feedback to shape product direction. 

When you are a start up, you realize the importance of being customer value driven because if customers don’t buy the product, then your start-up goes under. Because of this and their small size, most start-ups will stay very close to the customer or potential customer.  When companies become larger, there is a greater chance these anti-patterns appear.  More process and more controls are often put into place and unfortunately this leads to restricting change.  A company may sub-optimize for their own processes and plans that distances them from their customers.  

The question is, do you see any of these anti-patterns within your organization that impact your ability to achieve customer value?  Avoid the poor “aim of the anti-pattern’.  Instead, engage with your customers and use their feedback to help you hit the customer value target!

For more information on the topic of Customer Value, consider reading the following articles:

• Dangers of Certainty in Realizing Customer Value
• How an Agile Customer Feedback Vision can lead to Customer Value