Wednesday 26 August 2009

I don't believe in "Business Value" (sort of)

Ok, let's define terms. I'm not against value-oriented thinking. in fact, I'm all about the customer. I think whatever can add value to the customer or the output the customer wants (presumably software, in my case), the better. But this term "Business Value" has crept in to the Agile community, as a bastardization of the Lean concept of "Customer Value-Added activities" and it worries me. I'm concerned with terms here, and the term is used two ways. I'm increasingly concerned about it's sloppy use and the impacts of such.

In Lean, specifically in Value Stream Mapping there are two kinds of activities - those which add value to the customer, and those which do not. You analyze a process (say, software development from feature request to delivery into production) and you identify the time each activity takes, and whether that activity added or failed to add value to the customer. Writing code, writing tests, designing, working out clarifications of the requirements - these were customer-value-added activities. Waiting for a server to be deployed, waiting for three VPs to sign off on a design, etc. these were non-value-added activities. I like this kind of cycle-time measurement, because it forces the observer to be in the mind of the customer. If there's a business process which slows down the process, or, in lean terms, lengthens the cycle-time, it's an inefficiency and you try to find a way to remove it, circumvent it, etc.

At a fairly large financial service client, I saw a rather crazy thing occur. The coaches and suits were doing a value stream mapping. There were business activities whose performance served a business need, but not the needs of the customer. This might be a strategic steering committee meeting which a Team Lead might be required to attend, or a process step that existed to satisfy a regulatory requirement imposed on the business. These weren't really "customer value added" activities, but the coaches and business were unwilling to see them as non-value-added activities, or "waste". This led to an interesting compromise - the concept of "business value added" activities.

Now, I don't mind if there's a piece of waste in your cycle, and you acknowledge it, but then decide, for strategic trade-off reasons, to keep it. That's a sane business decision, even if it rankles my personal aesthetic. It is the prerogative of a company's decision makers to judge the interests of their customer against the interests of the organization and of the shareholders and come to whatever balance they feel best serves the principles and values and mission of their company. But by calling it "business value added" what they did, in effect, was move it out of non-customer-value-added column, which effectively stopped people from considering whether or not to reduce or eliminate it. It became synonymous with "customer value".

On the other hand, often when people use the term "business value" in the Agile community, they mean it as the customer value of a product feature, and are using it to help focus people's prioritization of work/features on the backlog (worklist for the uninitiated). And I get it. In that context, you need to have product managers prioritizing based on value, not cost, for reasons that Arlo Belshee can better explain. But the term business value gets mixed up in these various contexts, and I have heard consultants who, two years earlier would have called that committee review of design "waste" simply brush it off as "business value added" activity, and I think it's the sloppy language around BV and CV and NVA that is at the root of this phenomenon. In other words, hard nosed management consultants have stopped calling out the Emperor's nakedness. Since these external entities are the few empowered to call bullshit on a client, this means that less such is being called, to the detriment of our industry.

So yes, this is an argument about definitions and semantics. Yadda yadda yadda. But for my money, I want crisp meaning - especially if it allows the "cloak of truthiness" to descend and sow confusion about what's important. And if delighting your customers is critical to your long-term business survival, then anything not in that "value conversation" is waste (sorry, but it is - deal with it). You might have to live with some waste you can't get rid of yet, but you should never stop calling it like it is. Otherwise you begin to sink back into the very state from which you used value stream mapping to escape. And as far as I'm concerned, serving, nay, delighting the customer is the only way to be in business for the long haul.


Unknown said...

It's a sign of the political times: people support structures that empower them at the best of times, and in a negative growth economy, other people end up supporting structures that marginally employ them as well (so even the bottom rung is in on it).

Also, neologisms in business always speak to the insecurities of middle management. Many people... Read more are not in a position to wish the 'cloak of truthiness' to descend. That, in fact, is the opposite of the function of a cloak. We do our best to obfuscate our inadequacies and reify our 'value'. (Wow, this spell checker is woefully inadequate.)

I say 'we' -by which I mean 'they'. They murder truth; it's their job. They create value mapping, and they circumvent it.

Unknown said...

Also, the methodolatry doesn't end there. 'Business speak' smoothly and easily enters the mainstream and becomes 'word' and you can never step in the same value stream map twice, while even academic neologism (like methodolatry itself, anthropoesis -ask me later) remains jargon, marginalised interests remain slang (eco-thug, etc), and non-standard ethnicities stay on the 'disputed' pages of wiki (see 'skinship', very interesting.)

Gabriel Andres Bermeo said...

Nice rant! I agree that the path to long term growth and profitability is to serve the customer. I think that’s why I'm so attracted to Agile, it comes out and beats you over the head with customer value.

This horrible cycle that begins with a short-term focus on profit by any means necessary, drives the rank and file to make decisions that ultimately serve only the organization and not the customer. The fact these abhorrent terms such as "business value" creep into efforts like a value stream mapping are the by-product of such myopic thinking. This trend drives me up the effing wall. I really hope this latest round of financial disasters will shift the market and consequently the c-suite to consider a more rational approach to running a business.

Unknown said...

Well said!

This must be happening in many places because I have seen this myself many times. What people seem to forget is that the emperor is counting on them for 'nakedness awareness' (might be a first for that term). This problem stems from people putting their own needs ahead of the organization.