The agile community describes a "value focused" approach to management and development activities. While few would argue that the creation of value is not useful in managing projects, the question is what are the characteristics of these values?
A Systems Engineering paper, "Value-Centered R&R Organizations," William Rouse and Kenneth Boff, describes ten principles for characterizing, assessing, and managing value. These principles can be expanded to cover general technology development activities.
- Value is created in organizations by providing "technology options" for meeting contingent needs of the enterprise.
- Value focused organizations provide the primary means for the enterprise to manage uncertainty by generating options for addressing contingent needs.
- A central challenge of a value focused organization is to create a portfolio of viable options; whether or not options are exercised in an enterprise challenge.
- Value streams, or value networks, provide the means for representing value flow and assessing the value of options created.
- Valuation of technology investments can be addressed by assessing the value of the options created by the value network.
- Decision making processes - governance - are central in managing the flow of value.
- Organizational structure affects value flow, with significant differences between hierarchical versus heterarchical structures.
- Individual and team affiliations and identities affect value flow; dovetailing processes with disciplines is essential
- Champions play important, yet subtle roles in value flow; supporting champions is necessary but not sufficient for success.
- Incentives and rewards affect value flow; aligning these systems with value maximization is critical.
What's the Point?
When there is a suggestion that a process, tool or paradigm be applied to a problem, asking and answering the questions embedded in these principles will be useful.
- How can we generate value as part of the governance process?
- How can this value generation effort be traceable to a strategy?
- How can the organizational factors be aligned to support value generation?
- If a tool is being proposed, can the application of this tool be traced to a metric that in turn is traceable to value generation?
This last question is the show stopper question that must be asked to every process improvement product vendor.
