Terminology - Value

Overview

The understanding of Value like all things Agile, takes time to master. Coming from a fixed scope mindset we're usually looking at a solution which will service the customers needs. The customer needs a hair salon, the customer needs a bike, the customer needs a new e-commerce site. If we try to split these things up into a 2 week deliverable we're not focusing on value delivery, we're slicing up a fixed delivery which services lots of elements of value. And we can't give the customer a wheel of a bike, or a Salon which isn't complete, or a half completed E-Commerce site.

Value is a way of understanding what are the critical needs for your customer and why. It's kinda like flipping requirements gathering on it's head.

Hair Salon

If we take the example of a hair salon, we can break down the value the customer may want. We may think they want a hair cut, a shampoo and a blow dry, a highlight or colouring, etc... we're servicing a lot of value in one big hit with a Salon.

But the value to the customer is to look nice, to have a good haircut, to have their hair coloured, or highlighted, to have a shampoo, a blow dry and maybe have a place to be around other nice looking people. These are much simpler to deliver independently.

Bike

With a Bike, we can break down the value the customer may want. We may think they want a way to commute, a way to keep fit, a way to socialise, a way to escape at the weekend, etc... we're servicing a lot of value in one big hit with a Bike.

But the value to the customer is to get to work, to keep fit, to socalise, to escape at the weekend. These are much simpler to deliver independently.

E-Commerce Site

With an E-Commerce site, we can break down the value the customer may want. We may think they want an online presence, a way to sell to a local market, a way to sell to a global market, a way to keep track of stock, a way to take online payments, etc... we're servicing a lot of value in one big hit with a E-Commerce Site.

But the value to the customer is have an online presence, to sell locally, to sell globally, to take online payment, to keep track of stock. These are much simpler to deliver independently.

Why is this Important?

In each of these examples, if we are service small elements of value, we can deliver to the customer something more frequently and more completely. This allows us to change direction at any point. We may still eventually deliver a bike, or open a hair salon or give them an e-commerce site, or we may not, our initial assumptions may have been wrong.

If in the hair salon instance we initially just deliver hair cuts. We could organise that in a couple of weeks, we have minimal outlay as we can do it at the customers house. In doing this we can immediately get paid, and learn about what element of value to focus on next. Does the customer want colouring, do they actually want a beard trim?

This may seem like a total waste of time. Giving the customer a haircut at home is going to make you hardly any cash, and might not work. But what have you lost? A week, or 2 weeks worth of effort. What have you gained? Insight from the customer.
With this insight you can now steer to focus on improving on what you previously delivered, or pivot and start delivering something else. If you hit one element of value at a time, you're giving the customer what they want a little bit at a time, and gaining knowledge for the next thing.