Using EBM with the Product Goal
Intermediate
difficulty
Stage 4
Agile IQ® Level
Metrics
Practices
EBM
Framework
Introduction
Alignment to strategic outcomes is critical for any organisation. Without such focus they are unlikely to achieve ambitious goals and be leaders in their respective fields. Scrum teams align to the Product Goal to ensure delivery towards higher objectives.
What is the Product Goal
The Product Goal describes a future state of the product can serve as a target from the Scrum team to plan against. A product is a vehicle to deliver value. It has a clear boundary, known stakeholders, well-defined users or customers. A product could be a service, a physical product, or something more abstract. [1]
Example products:
- Hubspot CRM.
- Agile training service.
- The electricity grid, including its maintenance and upkeep.
The Product Goal is the objective flag post that teams work toward. It is considered when selecting work in Sprint Planning.
What is Evidence Based Management (EBM)
Evidence-Based Management (EBM) is an empirical approach that helps organisations to continuously improve customer outcomes, organisational capabilities, and business results under conditions of uncertainty. It provides a framework for organisations to immprove their ability to deliver value in an uncertain world, seeking a path toward strategic goals. [2] The model consists of the following key elements:
- A strategic goal
- Intermediate goals
- Immediate tactical goals
- A starting state
- A current state
Organisations set goals and create experiments (improvement ideas) in order to work towards intermediate goals. The goal setting follows a systematic approach. The framework is closely related to the Toyota Kata. [3]
EBM in Sprint Planning
During Sprint Planning, the team selects items from the Product Backlog that, for this Sprint, will contribute the highest value to the Product Goal. How do you know these items will help the team achieve the Product Goal? Value metrics are key.
In Sprint Planning
- Discuss the Product Goal. This is EBM’s the strategic goal.
- Set a near-term objective (the intermediate goal) for the Product Goal – something meaningful, audacious and inspiring to stretch the team and motivate them.
- Choose an EBM value-based measure. Discuss what impact is the objective designed to create, and what metrics will help you identify you’re making incremental steps toward the objective.
- Establish your hypothesis. That is, the initiatives that will help move the value measures in the right direction.
- Break the initiative into Product Backlog items and order them in the Product Backlog.
- Choose the items that will move the metrics for this Sprint and commence planning.
- Create a Sprint Goal. This will establish the direction toward the objective and create focus for the team.
Useful EBM metrics to consider for existing products include:
- Lead time from idea to delivery to market.
- Customer sentiment, e.g. Net Promoter Score.
- Revenue per employee.
- Customer usage index.
- Release frequency.
- Mean time to repair.
- Time to Restore Service.
EBM metrics to consider for new products include:
- Market share.
- Customer satisfaction gap.
- Desired customer experience/satisfaction.
- Lead time.
- Time to learn.
- Time to pivot.
- Innovation rate.
EBM in Sprint Review
The Sprint Review provides a unique opportunity to inspect steps toward objectives by assessing movements in the EBM measures.
Key questions
Have the metrics improved? If not, are they the right metrics? Do we need to choose other metrics? If not, do we have the right initiative? Do we need to change, adjust, or pivot to a new initiative?
Sprint Review provides the opporunity to engage strategic stakeholders with the following:
- Continuing with the existing initiative – Perhaps the metrics are lagging indicators and it’s too early to make any decisions.
- Is part of the initiative worth continuing?
- Do we stop other parts of the initiative?
- Consider alternative initiatives – Are there other solutions or approaches to the solution?
When an adaptation to an Initiative is required, the engagement with stakeholders at Sprint Review creates a feedback loops to discuss the impacts of changing part of the whole the Initiative, particularly where budget and previous forecasts of roadmap delivery is concerned, and adapt execution immediately next Sprint.
References
1. Sutherland, J. & Schwaber, K. (2020) The 2020 Scrum Guide (TM). https://scrumguides.org/scrum-guide.html
2. Scrum.org (2020) Evidence-Based Management Guide. https://www.scrum.org/resources/evidence-based-management-guide
3. Rother, M. The Improvement Kata. http://www-personal.umich.edu/~mrother/The_Improvement_Kata.html
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