Agile Principles: Time to Value

In the previous article of this series, I presented three main pillars that I see in the principles of the Agile Manifesto: High-Performing Teams, Time to Value, and Flow (Throughput).

In this post, I want to focus on Time to Value. The following four principles are connected to this pillar:

• Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.
• Deliver working software frequently, from a couple of weeks to a couple of months, with apreference to the shorter timescale.
• Working software is the primary measure of progress.
• Simplicity--the art of maximizing the amount of work not done--is essential.

Defining Value

Business value is a hypothesis held by the organization’s leadership as to what will best accomplish the organization’s ultimate goals or desired outcomes. —Mark Schwartz, The Art of Business Value

I guess there is nothing new as you read these principles, and yet many companies still struggle to get this done.

Let's start by exploring the definition of business value since we will be looking for and accelerating toward this.

It could be easy to define Value as specific business metrics, such as sales, revenue, profit; or customer satisfaction indicators like conversion rate, NPS, churn rate, engagement; and it's very tempting to focus on "business requirements," coming from desires and asks from different departments, or dictated by regulatory frameworks, depending on the industry and government.

Every successful organization has a clear and strong sense of purpose, and this purpose or mission must be focused on creating and providing Value. According to Mark Schwartz, business value is something that has to be discovered continuously. Successful organizations move fast and constantly learn in this process, serving their customers and creating Value.

According to Michael Porter (1), a Harvard Business School professor and a leading authority on business strategy, a company can have one of three basic ways of competing:

• Cost leadership: Try to be the cheapest by keeping costs low compared to other companies.
• Differentiation: Be different from everyone else by offering something unique, like a special design, a well-known brand, special features, technology, or a unique network of dealers.
• Focus: Focus on a specific group of customers or a particular place and do a better job than other companies in serving those customers or that place.

Based on this, we could also define Value as anything that helps the organization strengthen its strategic position.

I'm not qualified nor entitled to criticize Porter's remarks, but I think the current competitive landscape is much more complex and nuanced. There should be additional layers and dimensions to define value and shape business strategy.

Eric Ries's Lean Startup (2) is a fresh, while now well-known, view of how to launch new products and businesses through iterative and continuous learning. For this process, Ries outlines an agile and scientific approach for companies to discover business value, implying that the business doesn't know what Value is, and instead, it must develop a series of hypotheses, designing experiments to validate (or disprove) them, to finally generate business value.

Eric Ries, The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (New York: Crown Business, 2011).

Mark Schwartz states, "Every decision we make in a software development project is ultimately a decision about business value."

Jeff Bezos (3), in one of his letters to shareholders, talks about the importance of being customer obsessed: "The advantage of being customer focused is that customers are always dissatisfied. They always want more, and so they pull you along. Whereas if you're competitor obsessed, if you're a leader, you can look around and you see everybody running behind you, maybe you slow down a little."

This is an excellent hint into what organizations must focus on while recognizing that Value is always a moving target.

If business value is not fixed and differs from one organization to another, it must be discovered and developed. And isn't that what Agile is all about?

Time to Value

David Anderson, the author of The Value Flywheel Effect, prescribes that companies must focus on improving Time to Value as a leading indicator for innovation and business success.

Time to Value can be measured as the time taken from "idea conception" to "value in the hands of the customers."

Think about how often does your company launch new features? If you develop a new idea or requirement, how long would it take to be out there where the customers can try it?

If you would launch a new product or business idea, how long would it take for your company to test it? How fast can you move to validate your hypothesis, connect with customers, and grow this new product?

Agile Beyond Software

Software engineers wrote the Agile manifesto and it's easy to take these principles literally, focusing only on technical outputs and overlooking the business outcomes.

Since then, many authors and organizations have evolved this concept, following lean principles and applying them to different but interconnected dimensions: design (Design Thinking), entrepreneurship and product development (Lean Startup), and software development life cycle (DevOps).

Considering that software has eaten the world, it seems logical that Agile became the most popular framework, but agility can't be contained only in the scope of software and technology.

When the agile manifesto was written, most software remained below the visibility line in the customer journey (Service Blueprint). Now software is everywhere, and in more and more cases, software is the product.

Companies must accelerate Time to Value, enabling a culture and processes that use experimentation and continuous improvement to discover and deliver business value as a daily habit.

1. Michael Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (Free Press, 1985).
2. Eric Ries, The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (Crown Business, 2011).
3. Jeff Bezos, Invent and Wander: The Collected Writings of Jeff Bezos (Harvard Business Review Press and PublicAffairs, 2021).
4. David Anderson, The Value Flywheel Effect (IT Revolution, 2022).