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Discovering and realizing value

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Submitted by Bryan Pflug on Sat, 09/17/2011 - 13:44
  • Change management

The pursuit of value is usually a tenuous and uncertain journey. Like quality, the characteristics we seek in this pursuit are, like beauty, often unique to the eyes of each beholder. The different perspectives of these stakeholders often depend upon their unique domain expertise, lifecycle insights, and understanding of the business and operational environment. Since each of these perspectives are valid within the context they were observed, it can be quite difficult to reconcile them into a single pursuit. Yet without focus, precious resources can be squandered on unsustainable paths or fatal dead ends.

Since the intersection of these factors can be small,, creation of new things requires the creators to embark on a voyage of discovery, with cycles of concurrent experimentation, evaluation, learning, and luck. In his book on the power of adaption, author Tim Harford describes this search for value as a journey across an unfamiliar solution landscape:

While even the most treacherous terrain can often be eventually scaled given unlimited resources and time, those who pursue such ends will be at great risk, and many of the constraints which they must overcome may not be immediately apparent. In new product development endeavors, as in attempts to climb difficult terrain, the conditions for success can be fleeting, and overcoming one constraint often just allows us to see an even more difficult one ahead. Returning to Harford:

As developers conduct this search, work groups must learn to orient themselves so they can efficiently consume inputs, apply technology, and produce outputs that provide benefits to satisfy the market needs. These needs may be spread across different types of customers and stakeholders, and their decision-making may be embedded within many different business models, or may only be accessible after unique tailoring that erodes the affordability of shared functions. Richard Turner and Barry Boehm describe a pitfall that many solution providers fall into in this environment:

Many software projects fail by succumbing to the "Field of Dreams" syndrome. This refers to the American movie in which a Midwestern farmer has a dream that if he builds a baseball field on his farm, the legendary plays of the past will appear and play on it ("If you build it, they will come")... [There is a] software analogy of the "Field of Dreams" syndrom: "Build the software and the benefits will come."

Turner and Boehm caution against such premature investment, and argue for the importance of adopting an economic framework for decision-making which explicitly links the consumption of resources within target customers scenarios and the specific contributions that are expected from the solution. These solutions must also take account of the assumptions and constraints which could constrain those desired outcomes. Robert Rubin suggests asking three questions because of this inherent uncertainty:

  • What if we are wrong in our estimation of the situation today - how will the world look to us in the future compared to now?
  • What if our assessment of the today's situation si correct, but the situation changes - how might the world look from that future perspective?
  • Under each of these scenarios, what should we have done today to prepare for dealing with that future situation?

As a result, proposed system and subsystem designs must highlight how critical business scenarios and their accompanying performance attributes will translate into value under a range of alternative customer futures. These scenarios may realize value through many different improvements, such as enhanced responsiveness, reliability, flexibility, or the exploitation of advantages over competitors. Alternative improvements will favor different combinations of such advantages, and so the task is to discover which combination is the best fit for the most likely scenarios. 

As a solution's chosen design stabilizes, its definition and understanding by the development team serves to stitch together the project's value propositions within the 'sweet spot' depicted above. As a result, the fidelity and clarity of this design definition provides an iimportant leading indicator of the potential for future success.

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  • Adopting an economic framework for decision-making
  • Tapping into all sources of value
  • Evaluating business opportunities
  • Finding your way quickly
  • Converging on useful solutions
  • Patterns, pathways, and playbooks
Adopting an economic framework for decision-making ›
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