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Naked Planning – Arlo Belshee from Agile 2008

November 11th, 2008

There is a nice pod cast (Agile Toolkit Podcast) by a guy Arlo Belshee on Agile Toolkit Podcast, Naked Planning, Promiscuous Planning and other Unmentionables (sorry don’t have a url). He has a couple of points that are interesting (around 17-23mins). He is basically using Lean-type queuing for planning. I am interested in his ideas around prioritisation and estimation. He is basically arguing that in prioritisation having estimations creates a selection bias. That is, the business does not necessary choose the options that are best for them (ie delivering business value in the form of cash or a long-term differentiator). He argues against a traditional cost-benefit analysis. This analysis is a 2 × 2 grid – cost (x) by value (y) as scatterplot as below:


          Cost-Benefit
          ============
       ^
high   |                                    long-term value (market differentiator)
       |    short-term value (cash)
       |                                   
(value)|                         
       |                                   
       |    low-cost/low-value (death march)
low    |                                       never done (expensive and little value)
       +--------------------------------------------------------------------------------------------------------------------->
           low                    (cost)                 high 
    

In this approach there are four main positions: (1) top-left is the short-term value options that are cheap and easy to do but provide high value. These tend to get you cash in the market place. But competition can also copy and innovate at the same rate. So they are valuable only in the short term and are also known as cash cows. (2) top-right are the long-value options. These are the market differentiators that you want to build. Because they high a cost, they are harder for the competitions to create. (3) bottom-right are the low cost and value. These are the items that we tend to think of as quick wins. He points out that they are the death march. They merely distract from delivering value. (4) bottom-right are normally thrown out and not a problem.

He argues that we need to remove, the x axis, cost. Prioritisation should only be about business value and lined up in order. In fact, he points out that when you take away the cost, his group opts for high value propositions. This mixture of short and long-term value propositions is a better product mix. But if you leave in the cost, people do tend want to include the death march items.

Therefore, do value-based analysis. Rather than cost-benefit, do benefit-benefit analysis. This approach hide costs, or in fact never does the estimations in the first place. Because having an estimation is a negative business value proposition and actually has a positive cost. It is negative business value proposition because it creates a selection bias that people select non-business value options. It has positive cost because someone has the make up the estimations. It has the other cost that the made up part is just that – made up. Better to work with a queue of real wait time over the duration of the project.

He continues on to talk about estimations as wait time before starting the next MMF.

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