Great success stories in businesses are often based on being first on the market, but they thrive by being able to outmanoeuvre the competition and adapt rapidly.
The easiest domain that can be used to indicate different examples remains nowadays the technology world, where we can find different good and bad stories. “The first major social network, Friendster, was trumped by MySpace, which in turn was trumped by Facebook. Netscape was trumped by Yahoo!, which was then trumped by Google”. We all know that this is not the end and, somewhere, into a basement or a small garage, someone is building the next 'big thing' that can become the main actor on the market.
All the current small and medium companies want to scale up in a very short period of time, becoming more complex in their organizations, having multiple roles defined, and willing to manoeuvre as easily as possible in all the situations that the clients from the market are unexpectedly bringing up.
It is important to learn and adapt rapidly and find the shortest path to deliver the most effective services to our clients. In our daily basis work, we have to adapt to changes in the market, changing customer needs or technology, to deal with uncertainty and regulatory changes. In fact, the only constant variable remains the change. The better and faster we are at adapting, the more we’ll not only survive but thrive, succeeding in delivering premium services on time. What can we bring in equation that would differentiate us among others? Is it enough to just deliver something? What’s the difference between outputs and outcomes? Is there an obvious distinction between them?
Some of us may think the questions are merely semantic or there is no obvious difference and no effort is required on this matter. But, the truth is that it can be the difference between mediocrity and the creation of lasting and sustainable change. “Ordinary” organizations are stuck on making decisions based on outputs. Great organizations are managing the outcomes. While we would consider the difference simply as outputs are extrinsic and outcomes intrinsic, it is worth to think more fundamentally and profoundly. Companies OFTEN measure success ONLY in terms of revenue and cost savings, which is perfectly fine and common for them, but they often miss the interest of why they do what they do in the first place. What is it customers really need and what will provide value to them?
Well, this is a tough question that would require a huge amount of joined effort, favourable context, understanding of what is behind the basic agile principles and willingness on all parties.
Unfortunately, most of the current services companies today value more throughput or outputs over outcomes. They emphasize on more than better. Throughput measurements tend to cover how fast we get through the work. As examples for agile teams, we can consider things like “number of items/features/stories completed” or “total story points/ideal hours/t-shirt sizes” completed during an iteration/sprint. Lean teams might use cycle time, or how long it takes a similar sized item to move from the beginning of the lifecycle to when it is launched. Output would include lines of code, features or function points completed.
Many important representatives in the agile world believe that it's worth to spend additional time thinking at alternatives to scaling agile processes to a different level by really starting to re-evaluate the Agile Manifesto, which was produced already a decade ago. This phenomena is more present nowadays on all the dedicated conferences and relevant blogs.
Well, the same relevant agile representatives believe that nowadays “working software” is not enough for our clients. Unless the clients are delighted by the working software, the future of the business is not bright. Clients delight has become the new bottom line of business relations. We have, again, many examples of firms/companies that succeed in delighting their customers like Facebook, Apple, Tesla, Salesforce. Having your permission, I would like to deviate more or less from the main subject, and share with you some examples of the ways of shifting thinking in Agile. Considering this, and by getting in touch, directly or indirectly, with different people (see. Mitch Lacey, Kenny Rubin, etc) and by reading different valuable blogs (Mike Cohn, Kenny Rubin, Steve Denning, etc.), I have found some relevant approaches that could be considered in this shifting process. I would start with my favourite one, which is actually the main topic of this article:
Remember well, the implicit goal of work in the Manifesto is “working software”, which is actually the production of an output – a definite work. Even “delivery of a user story” is the production of an output. By contrast, delighting the customer is an outcome, which can be considered more as a human experience. The shift from an output to an outcome is fundamental.
We all know that in the Scrum methodology, there has been a great deal of discussion about the definition of “done”. Most organizations fail to recognize that the job is not fully “done” until the customer has been delighted.
Ideally, agile implementation delights its customers. All this has a cost and that is almost entirely related to individuals. When the individuals are leaving, the organization would slide back into merely delivering software. To cement the goal in place, it is vital that it is the explicit goal of the company.
The importance of measuring customer delight through the Net Promoter Score can hardly be over-emphasized. Without measurement, “customer delight” becomes an empty phrase or slogan, and the firm will slide back into focusing ONLY on the financial bottom line. It is only through this measurement that the whole organization can be truly focused on delighting the customer.
There are many other shifting ideas that could bring a different approach with an amazing outcome to our clients, but the main purpose of the article is not necessarily to reinterpret entirely the existing Agile Manifesto.
Coming back, many others would consider the strategic outcomes to operational delivery as a main collective effort in shifting the mind-set of people from more outputs to better outcomes. Instead of focusing on producing ever more outputs, they believe the goal of services organizations must be to deliver better outcomes. The key could be in understanding what the right objectives and outcomes are, and then find the most coherent, simple and cheapest path to achieve them.
I mentioned, at the beginning, the importance of making the right manoeuvre. Well, being objective and outcome focused helps people individually and organizations collectively, to adapt quickly to change and to outmanoeuvre the competition.
Everything sounds great so far, but the big challenge will start when we strive to do this shift by asking ourselves, how do we do this?
I think it's a matter of choice for each company to use different tools and concepts on this matter, but, I do believe that we need to consider an approach that would provide enough flexibility for people to innovate rapidly as new opportunities emerge, while also rigorous enough to help organizations make better strategic decisions, for achieving a vision.
There is an old saying, the customer is always right, which might be a good principle for certain situations, but it doesn't serve well for today's services companies.
A better formulation can be found, one that would sound like this: “if you don’t listen to your customer, you will fail, and if you only listen to your customer, you will fail”.
We all know that all the customers wishes are transformed in a list of requirements called backlog in agile world, prioritized and then, we build as many new features as we think possible to meet these requirements. All teams do this over and over again with a collective focus on prioritizing and delivering ever more features to their customers, ever more efficiently. After all, this does not sound as a bad thing, actually it is pretty responsible and in the end, we are giving the customer what they ask for, so, what's wrong with that? All business executives will be pleased.
Many of us equate delivery of features with success in the marketplace, so teams quickly focus on how to design, build and test the solutions that meet the requirements, instead of trying to further understand the problems and why they exists, or the desired outcomes behind the backlog. Until people fully understand the problem they are trying to fix, they cannot possibly know the best way to fix it. Until an organization fully understands what objectives it wants to achieve and what related outcomes it hopes to deliver, it cannot possibly know the best options to pursue. In order to figure this out, we need to know what is going on, why it is happening, and who is experiencing the problem.
The outcome of our work is what really matters. We all intuitively know that our goal isn’t to release 10 new features this year, but to improve the lives of our customers the best we possibly can. To do that, we must always focus on the outcome or the impact our work will have on the users of our products.
We can’t stop at thinking about the outcome, though. To be as successful as we can be at having significant impact on our customers’ lives, we have to actively work to minimize the output while also maximizing the outcome or the value of our services. As all engineers, we are always focused on how to increase the output of our teams.
With each story, we aim to understand the value we are trying to provide to our customers, being translated in the well know concept of minimum viable product (MVP).
It is important to make the right choice and start building the right story. Even though, this is mainly the responsibility of the Product Owner who needs to make decisions, I believe that we can have a huge contribution by asking ourselves, “Are we choosing to work on stories that balance effort and value so that we can have the most impact on our customers’ lives?”.
What is going to be the best choice: doing 10 things crudely or doing 5 things brilliantly?
The Mobius loop discovered by German mathematicians August Ferdinand Möbius and Johann Benedict (according to Wikipedia a Mobius strip is a "surface with only one side and only one boundary component") features a continuous loop with a twist in the middle. This visualizes the constant flow of information that should exist within an organization to create clarity of goals at all layers.
With Mobius, you can start anywhere you feel the situation is asking, but it is important to start with a clear understanding of the problem or situation, and after that, we can move on to deep dive. There can be situations when we may have up front a set of options and a work back is required to ensure the problem or situation is well understood.
Having the Mobius diagram in mind, as an alternative, we can create transparency over the decision making and investments. This is a plus for the business to track the investment path and check if it is appropriate to the value being returned or whether they should invest in another area that may give them higher gains (it can be seen in a reprioritized list of stories in backlog).
It is not easy to motivate the people to make the switch to adopt outcome-based thinking. Many people are used to remain in their comfort zone. Maybe it is more feasible to do this step in parallel, trying to put more emphasize on outcome during the time.
With the contribution of Gabrielle and Ryan, below we can emphasize on some benefits, principles and steps that the outcome-driven approach requires or includes.
You can test multiple ideas quickly in order to make decisions having the results as the base and not forecasts.
Improve time to market as we advocate to deliver only the minimal amount needed.
The investments are made in chunks and not all from the beginning, reducing the risk and potential unexpected costs.
Delivering the MVP means less code to create and maintain, reducing the overall costs for entire SDLC.
Focus on the outcomes, the drive value over the output that drives effort.
Align teams around solving problems and pursuing common opportunities that benefit the organization and their customers.
Measure value continuously in order to make sure that you are heading on the right direction.
Empower teams to reach the outcomes within constraints.
Problem or Opportunity - what problem are you trying to solve and what opportunity do you want to pursue?
Outcomes - what are the most important outcomes to improve next?
Deep Dive - Discover more about the problem or opportunity.
Options - What are the current options that we do have for improving the most important outcomes?
Deliver - Deliver the best option with an incremental step and learn from it.
Measure - How much did we move the needle?
Adapt - Should we continue on the same direction or should we need to change the option?
In the end, I would advise everyone to continue to improve the agile tailoring process by making a review to the current version on the Agile Manifesto in order to highlight our weaknesses, and systematically fix them. Don’t forget: “If you don’t listen to your customer you will fail, and if you only listen to your customer you will fail”
Sources of inspiration in writing this article:
Mike Cohn - "Coaching Agile Teams"
Mike Cohn - "User Stories Applied"
Mitch Lacey - "The Scrum Field Guide"
Steve Denning - "The Leader's Guide to Radical Management"
Gabrielle Benefield & Ryan Shriver - "Mobius - Create, deliver and measure value"
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