In my previous blog article, I discussed the importance of scrum teams knowing the value in addition to just the size of what they are working on. While knowing the size helps sequence work to increase throughput, knowing the value helps the team increase its productivity. I suggest that value is an estimate and should be treated as such. I recommend using relative value as a way to do a quick sort rather than struggle over a discreet estimate (guess). The discreet value estimates we normally do are usually a waste of time because no matter how hard you work it will never be true.

Since I wrote that last article, conversations with BAs and Product Owners, makes me feel like I need to say a bit more about what attributes we look for to rate value. Another way to think about this is to think about what impacts matter. This is a very key concept that there should be consensus on at a very strategic level. For example, if the impact we are after is revenue, that may lead to very different priorities than if the impact that the company values is say market share. This is a very key area that has the potential to either results in alignment or chaos. I like alignment because it allows autonomy without command and control. Alignment is gained by providing a decision framework to kind of create mindshare (consensus about how to think about a problem) that helps people decide in context.

An example of a value decision framework is known as the Pirate metrics. This was first presented in 2007 by Dave McClure at Ignite Seattle. You can see it here Pirate Metrics Video . This framework is still about the most popular way used by venture capitalists to value startup companies.

The key impacts that are sought after are;

• Awareness
• Activation
• Registration
• Retention
• Referral

These are pronounced AARRR! <Please use proper pirate accent>. Notice the absence of ROI, revenue, customer satisfaction, and many other popular impacts. There are reasons for this. Some of the reason is based on lean thinking to minimize the work down to what really matters. 4X has the same kind of thinking about minimizing to just the OMTM (One Measurement That Matters). The thought is, to the extent that you are customer driven, the AARRR measures will move. Using this framework consistently gives you a way to evaluate the performance of an enterprise or compare one with another.

So my thinking is that this sort of framework becomes useful when you need to evaluate the relative value of a bunch of ideas; initiatives, epics, stories, and so on. Although it may be difficult to guess the exact impact (even if you have a 5 tab Excel with pivot tables), you may be able to very quickly sort or rank one item compared to others. As the items change over time from either market developments, splitting, and so on, you can quickly re-sort. When this is used in priority setting, it can leave to very high performance teams.

Thoughts?