The discussion highlights the importance of tracking business value alongside traditional metrics like velocity. Todd and Ryan emphasize distinguishing between perceived and validated business value to truly gauge product success. They advocate for evidence-based management and suggest metrics such as cycle time and throughput may offer more insight than velocity alone. Their insights help product owners focus on what really delivers value to customers.
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Quick takeaways
Measuring validated business value is crucial for understanding product effectiveness, distinguishing it from merely perceived value to customers.
Other metrics like cycle time and throughput should be prioritized over velocity to better reflect actual product utilization and customer satisfaction.
Deep dives
The Importance of Measuring Business Value
Business value is identified as a critical metric that companies should measure to assess the effectiveness of their products and services. Evidence-based management (EBM) emphasizes the need to differentiate between perceived business value and actual business value delivered to customers. By tracking current business value thoroughly, organizations can understand the real impact of their products on customer satisfaction and overall business performance. Recognizing that business value is foundational helps teams focus their efforts on meaningful outcomes rather than just outputs.
Rethinking Velocity in Agile Metrics
The podcast discusses the inadequacy of using velocity as a primary metric in agile environments, suggesting that other metrics such as cycle time, throughput, and work-in-progress (WIP) limits are more valuable. Velocity may reflect perceived business value, but it does not guarantee that the product delivered is actually useful or utilized by customers. The distinction between creating a product and confirming its value is emphasized, warning against reliance on superficial metrics like velocity. Instead, validating business value through customer feedback and actual usage should take precedence over mere output measures.
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Understanding Business Value Versus Velocity in Agile Metrics
Todd and Ryan discuss tracking business value as a metric similar to velocity. They believe that measuring business value is essential for understanding the success of products and that evidence-based management is a good approach. They also suggest that metrics such as cycle time, throughput, and item age may be more beneficial than velocity. They caution against using perceived business value, the perceived value of a product backlog item, instead of validated business value, which is the actual value delivered to customers. Todd and Ryan suggest that product owners should strive to measure validated business value and that evidence-based management can help in this respect.