Business Value Alignment in Agile Product Development

This article blends Agile Methodology with a selected portion of the Business Relationship Management (BRM®) Methodology from BRM® Institute with the specific purpose of diving deeper into Business Value as it relates to Agile Teams developing digital products for Business Partners. BRM® also stands for Business Relationship Manager, the role, as used throughout this article.

Business value leakage occurs when the full potential value from solving a Business Partners’ business problem does not realize in practice. What causes business value leakages, and how can leakages be prevented from occurring as Agile Teams develop products? With the development of B2B digital products in mind, this article aims to:

· Explore the beginning source of business value leakage in product development

· Explore the role the Agile (Scrum) Team plays in protecting business value from leaking when developing digital products

Observe the value leakage pipeline image below and imagine that business value is flowing through the pipeline. As Agile Teams create digital products, at various points in the pipe, there is a leak. As business value streams through the pipeline, it leaks at each of those different leakage points — misaligned value system, missed opportunities, suboptimal design, suboptimal deployment and operation, suboptimal measurements, accountability & organizational capability. Also, delivering business value in creating a digital product for a Business Partner can sometimes feel like an uphill struggle because we are working against ingrained cultures, budgets, resources, time, and other factors. Finally, note that the pipeline will undoubtedly leak at some point because we are working with humans (and humans are not perfect), and, therefore, some potential value never realizes.

To adhere to exploring the beginning source of business value leakage in product development, Misaligned Value System, is the focus of this article. Articles on missed opportunities, suboptimal design, suboptimal deployment and operation, suboptimal measurements, accountability & organizational capability will be published separately.

Value Leakage Pipeline

Misaligned Value System

Digital products are evaluated based on price and perceived value. Companies tend to focus on price because it is easy to understand and manage. Perceived value, on the other hand, is harder to define or even measure. However, when a company decides to launch a new product or improve an existing product, it is essential to know the Business Partners’ value system.

What is our Business Partners’ value system to align what the product offers to those values? Eric Almquist, Jamie Cleghorn, and Lori Sherer with Bain and Company researched and identified 40 B2B Elements of Value and organized them into five categories. The 40 B2B Elements of Value pyramid has roots in Abraham Maslow’s hierarchy of needs, where the most basic needs, the table stakes or the got-to-haves, are at the bottom of the pyramid, as shown in the image below.

The B2B Elements of Value Pyramid

The got-to-haves or table stakes revolve around regulatory compliance, ethical standards, meeting specifications, and, of course, always offered at an acceptable price.

Fulfilling the got-to-have values for the Business Partners’ digital product opens the opportunity to explore other Elements of Value in the pyramid. The most effective way to clarify the Business Partners’ value system is for the Product Owner (who ideally is versed in BRM® methodology gained through the BRMP® certification) to hold a session with them and listen to their pressure points. Their pressure points often tell a story about their want-to-haves or wow-to-haves in the digital product. The BRM® certified Product Owner organizes the information gathered from the session and integrates the Business Partners’ values in the roadmap, naturally in the form of enhancements or features.

An example would serve beneficial. Suppose the Business Partner suffers from inefficiencies in their processes produced by multiple and yet essential digital products. In this particular case, the automatic transferring of information from one product to another could directly eliminate the transactional work of manually sharing information between products. In this case, a solution could be to provide an integration between products. The BRM® certified Product Owner must keep in mind that the technical feasibility of what the Business Partner considers valuable might require research. Setting expectations with the Business Partner on the onset and minimizing making promises to the Business Partner should not be discounted. Also, discovering if the integration is a want-to-have or wow-to-have requires additional probing. The Product Owner should always be cognizant of the Business Partners’ want-to-haves vs. wow-to-haves to prioritize features effectively. A good Product Owner will also communicate the Business Partners’ value system to the Agile Team.

The BRM® certified Product Owner informs the remainder of the Agile Team about the Business Partners’ value system, understanding that timing is essential for preparation. Ideally, insight transfers in the form of a Product Roadmap and User Stories explaining the reasoning for the feature (the “why”) and the Product Backlog priority. For example, when the Development Team understands a User Story’s regulatory compliance, they know the criticalness to meet legal requirements, giving them another reason to be exact in their development efforts. Equally, the Scrum Master removes impediments to achieving the Sprint Goal, thereby enabling success — a complete and timely release.

A feature may require the Development Team to research and/or conduct a feasibility experiment in a different scenario. For this reason, a good Product Owner shares the Product Roadmap generously in advance, allowing the Scrum Master to organize professional development, if identified as a necessity, for the Development Team. Similarly, the Development Team is allowed ample time and space to gain a skill set, if needed, preparing the team to successfully develop the features when they enter the Sprint as a goal.

Aligning with the Business Partners’ value system serves as the foundation of providing business value and sets the tone for the remainder of the efforts to deliver high-value digital products for the Business Partner. The Agile Team must be aware of that value system to align actions and investments to appeal to the value system. When the Agile Team understands the “why” for the Business Partners’ values, it allows the team to be compelled by the larger vision and goals for the product, enabling them to produce their best work.

The Agile Team must also be watchful of other business value leakage sources that could undermine the effort placed on aligning with the Business Partners’ value system if left unchecked. Next, we will explore missed opportunities.

About the Author: Letty Fuentes is a certified Business Relationship Manager Professional (BRMP®) with the BRM® Institute. Follow me on LinkedIn.

Side Note: As mentioned in the article, Eric Almquist, Jamie Cleghorn, and Lori Sherer with Bain and Company developed the 40 B2B Elements of Value. The authors have also developed a B2C Elements of Value Pyramid. In the sources, Elements of Value refers to the B2C Elements of Value Pyramid.

Sources:

“Business value leakage occurs when the full potential value from solving a…”, “Business Value Leakage”, “Misaligned Value System”, “Missed Opportunities”, “Suboptimal Design”, “Suboptimal Deployment and Operation”, Suboptimal Measurements, Accountability, and Organizational Capability”, “Business Partner’s Value System”, “…gains clarity about the Business Partner’s value system”, “…action and investments to appeal to that value system.” Business Relationship Management Institute, Inc., BRM Body of Knowledge (BRMBOKTM), Business Relationship Management Institute, Inc. 2019, Page 76–79. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of BRM® Institute.

“Value Leakage Pipeline”. Business Relationship Management Institute, Inc., BRM Body of Knowledge (BRMBOKTM), Business Relationship Management Institute, Inc. 2019, Page 76. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of BRM® Institute.

The B2B Elements of Value. Bain and Company, 18 Jan. 2021, https://hbr.org/2018/03/the-b2b-elements-of-value.

The B2B Elements of Value Pyramid. Bain and Company, 18 Jan. 2021, https://hbr.org/visual-library/2018/03/the-b2b-elements-of-value-pyramid.

“…products are evaluated based on price and perceived value. Companies tend to focus on price because it is easy to understand and manage…value…harder to define or even measure.” Bain and Company, 18 Jan. 2021, https://media.bain.com/elements-of-value/.

The Elements of Value. Bain and Company, 18 Jan. 2021, https://hbr.org/2016/09/the-elements-of-value