Sunday, July 30, 2017

Agile in cycles

Agile methods are a grand bargain with the sponsor and with the portfolio manager:

In trade for latitude to encourage and accept change, the agile project manager delivers the best value possible for the allocated investment

And so, one is encouraged to ask: how does the investment for  best value -- aka: optimum capital allocation -- get envisioned and planned?

Enter: Planning cycles!

Yes, but ....
The customer (user) determines value, so how does that dynamic get cranked in ... (out yonder, beyond agile interations where, close in,  the customer dynamic is well understood)?

After all, consider: the portfolio leader must come to grip with dynamics that may affect strategic optimization and value maximization. Customer-directed value may well:
  •  Introduce unanticipated “creative destruction”, or “destructive innovation”
  • Affect carefully crafted portfolio coherence and coupling
  • Change commitments on the business and project scorecards, and
  • Affect stakeholder KPI’s
 Throughput is the big test .... throughput is what counts in the end after all the creation and innovation

Eliyahu Goldratt and Jeff Cox, writing in their business novel “The Goal”, made popular the concept of throughput when they set down their ideas for the Theory of Constraints. Throughput—a particular focus of agile methods—is defined as:
Throughput is that which is valuable to customers and users for which they are willing to pay and willing to adopt in their operations.

In agile methods, planned throughput is adjusted after each cycle or iteration. This table summarizes agile throughput.
Agile throughput
Throughput is what customers buy and use
Throughput improves the business scorecard
·   Each agile iteration produces throughput
·   Each iteration consumes resources, and …
·   Depletes the business balance sheet
Throughput restores business balance sheet over time

Need more? Chapter 11 in my book "Managing Project Value" will give you all you can handle.

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