Blow Up The Business Case

Writing a well-crafted business case may be key to securing funding but it has little impact on whether your initiative succeeds or fails. A clear product vision, strategy for testing it and knowing which initiatives to start, stop, or continue will serve you better every time — especially if your goal is to create a high performance organization.

While the discipline of creating a business plan is useful it doesn’t guarantee anything; except maybe that the plan will change once it comes into contact with customers. So it begs the questions, how do you manage investment risk without simply writing documents, cloning other companies success by becoming ‘The Uber of [insert domain here]‘ or implementing the next great HiPPO (High Paid Person Opinion) idea?

In the webinar ‘Blow Up The Business Case’ hosted by O’Reilly Media, I presented how to take an evidence-based approach to investment decision-making by creating a framework of evaluation to manage and prioritise your organization’s projects and products. It discussed how techniques such as customer discovery, hypothesis-driven development, and innovation accounting can minimize risk, uncover and inform options, and get the optimal return on your efforts.

Throughout the course of the webinar I asked the attendees three questions to get a sense of what techniques they are currently using and how they are incorporating customer/user feedback, measurement and decision-making frameworks into their development process to drive success in their own organisations. As ever, the results are both interesting and surprising.

Closing the learning loop with customers and users

How often do you get feedback from real users and customers in an iteration?

The two biggest risks to any investment in a new initiative is not how much it costs or when it will be done; but reducing the uncertainty of will it get cancelled and will anyone use it? The way a user tells you that they like your product is they use it. Customers tell you that they like your product by sending you money for using it.

If you’re not talking to the people ultimately responsible for the success of your products, how can you know if you’re creating something they deem to be valuable and worth sending your their hard earned cash for the honour of using it?

“The most expensive way to find out if something works is to build the entire thing, then find out if people use it.”

Involving customers and users in your development process helps close the learning loop with the people that matter in making your product a success. If you are serious about co-creation, get them involved!

What gets measured gets done — Peter Drucker

How do you measure the impact of work in an iteration?

Understanding the results and impact of our efforts should be the key focus for any high performance organisation and team. Sadly, too many teams live in a world so disconnected from business/customer/user success that they only focus on their own inputs and outputs not outcomes.

Organizations that see technology and software development as a cost centre simply care about how much work gets done, not how effective that work was in achieving our ultimate business/customer/user goals. Teams also tend to fall in love with their process… how great and efficient their process is — often it's all they want to talk about.

Stories complete is a vanity metric to make you feel good or get management off your back. Velocity, lead time and cycle time are process metrics. Information gained and economic value captured are outcome metrics. Velocity, lead time and cycle time tells you how well your process is working, not how effective the team has been about achieving business outcomes — bottom line impact for our efforts.

High performance teams understand the difference between vanity, process and outcomes metrics. They focus their one metric that matters on solving problems aligned to their current goals — which may be process or business focused depending on the problem they are trying to solve.

Frameworks for decision-making, evaluation and investment

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How do investment decisions get made in your business?

Death by steering committee or HiPPOs handing out orders to implement — you decide. Engaging teams by framing problems to solve, rather than order to take, has a huge impact on how leaders can encourage teams to work in an innovative way.

Creating a framework for making decisions based on the ambiguity that is inherent when innovating and operating in conditions of extreme uncertainty is a critical factor for high performance teams. No one person can be expected to get it ‘right’ every time. The goal of using economic frameworks such as Cost of Delay or WSJF is not to provide a magic number. The goal is to force people to expose and explain their assumptions behind why they came up with that number. The added advantage with exposing assumptions is that they are shared, testable, and we can create experiments to exercise those assumptions in learning loops.

It also means that we can start to create and link economic information back to business outcomes to provide a common language that is universally understood across the organisation — money!

Conclusion

The new business case isn’t a 100 page document with well crafted numbers and arguments as to why your idea is the best. It’s a runway for testing and learning all our best ideas to find out what works, and what doesn’t.

When you are putting together your next business case, try using the following principles to set up for success:

• Get across functional group together that understands and represents the organization
• Map ideas out at speed using a canvas (like business model or value proposition canvas)
• Treat the canvas as a living document, updated regularly based on the learnings from testing out your ideas
• Test ideas with real customers and users — close the learning loop together
• Optimise to reduce the uncertainty of building something no one wants and stop wasting people's time
• Create a framework for the evaluation of ideas for future investment
• Set investment boundaries around time, effort and scope to build in feedback loops for course correction or close

Further references

Blow Up The Business Case was the final session in a series of three webinars with my co-authors and me. You can check out Joanne Molesky presenting ‘Financing Alternatives for Software Delivery‘ and Jez Humble talking about Running Agile Programs At Scale on O’Reilly's website.