Recently there seems to be a lot of talk about focusing on business value in the Agile/Lean blogo-/twittersphere. And while I think that there is value in talking about business value, it seems to me that many of those statements/discussions lack some critical aspects.First, the often made assumption that businesses primarily exist to please their customers to make money is simply wrong, in my opinion. And actually, what happens in those businesses often disproves the assumption right away. I have seen business owners spending money on unreasonably sized fair booths, care more about the number and scope of projects worked on than their profitability, have the company grow and be stiffled by an oversized hierarchy without any apparent need etc. All these things were not done out of a focus on business value, but *to make the business owner happy*. Some of these business actually went out of the same, because what made the owner(s) happy wasn't financially sustainable in the long run.
Second, and not less importantly, there are also the employees involved. A common sentiment I see is expecting the employees (for example a software development team) to solely focus on what provides value to the customer, based on the fact that - after all - it's the customer's money they are working for. This seems to imply the main reason they are working is the money they get out of it. A quite sad perspective, isn't it?
I'd prefer for people to work on something that helps them live their passion, to find self-fulfillment. I'd prefer them by doing so in collaboration with their colleagues to be able to produce value that someone is willing to spend money on. Enough money to support the survival of the business.
Wouldn't that be a great world?
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I am very aligned with this thinking, and you offer some important perspectives (truths, maybe) in your 2nd and 3rd paragraphs.
ReplyDeleteThis whole profit-oriented/value-stream thinking is flawed. If we are going to measure anything let's measure "joy of work", that would be a metric I can stand behind.
Another recent post touches this same subject. @DocOnDev: Business Value is not the only reason to adopt agile. http://bit.ly/8gcfOP
Thouroughly seconded. The alarming thing is that _business_ thinking has - at least in some cases - already evolved beyond the narrow pecuniary definition of value that seems to be driving a lot of the discourse in lean (particularly) and agile (increasingly). Once again, software thinking is behind the times! Maximising profit is a pretty empty goal compared with sustainability (no business is an island, in its market, with respect to it's shareholders, employees, customers, or (if big enough) it's position in a national or global economy).
ReplyDeleteHi Ilja,
ReplyDeleteI appreciate your perspective, but I think you're mixing different things together.
For one thing, I think the reason a business enterprise exists is (usually) to make money and that pleasing customers is a means to that end. When you mention things like "spending money on unreasonably sized fair booths, care more about the number and scope of projects work on than their profitability, have the company grow and be stifled by an oversized hierarchy without any apparent need," it sounds to me like poor management. I don't think it "proves" the very /purpose/ of the business is just to fool around at any cost to make the owner happy.
In many companies, mid-level managers are concerned about the number and size of projects they manage because their job performance is measured on that basis. They are not measured or rewarded on the basis of how their work affects the corporate bottom line. If senior management established performance assessment criteria that encouraged behavior that helped meet the company's business goals, we would not see this sort of thing as often as we do.
The personal motivation of employees to enter a given line of work and to pursue professional growth in that line of work is not the same thing as the purpose of the business enterprise for which they work. Professionals /are/ looking for self-fulfillment. Some of what they do also helps their employer make money. That's the reason they were hired. This does not mean the /purpose/ of the enterprise is to provide a vehicle for employes to live their passion. That's up to the individual employees!
Cheers,
Dave
Hi Tobias (alias agileanarchy),
ReplyDeletethanks for your comment!
Yes, I saw that blog post by DocOnDev, and I agree with it. I still saw it missing some of the aspects, which was one of the many motivations to write this.
David,
ReplyDeletethanks for mentioning sustainability, another important factor overlooked much too often!
Some mushy thinking here - whose value? Stakeholders' value (covalent). Stakeholder groups typically include workers, management, shareholders, business owners, customers, regulators and e.g. society as a whole. Any successful appreciation of value has to consider and align all these group's perceptions of value - and deliver against this. You may also care to consider the precepts and relevance of Core Group Theory (Kleiner) here?
ReplyDeleteSome specific points:
Joy-of-work: this isn't going to get you far with the people who pay the wages (sadly).
Sustainability: you make care to consider the Five Capitals model of sustainability.
Purpose of a Business: you may care to consider the Goldratt perspective (context for Theory of Constraints).
The best places I've worked, the execs cared as much about the employees as about the customers. That fostered a motivating, learning environment. What I take away from Lean is that it's good to understand as many aspects of the business as we can, not only the parts automated with software. I like the idea of everyone pulling together. I'd also like the business to think about ROI - I hate it when we spend time on a feature that nobody ever uses, for example. A lot of times it's us, the software team, who is acting in the best interests of the customer.
ReplyDeleteHi Bob (aka flowchainsensei),
ReplyDeletethanks for your comment. Will see that I take a look at the mentioned resources, at some point in time.
Re Joy-of-work: I think it's to their own detriment. Passionate employees are so much more effective that it seems economically unsound to not have a focus on joy at work. It's my impression that's one of the main reasons of Semco's success.
Hi Dave,
ReplyDeleteI think it's kinda self-evident that the purpose of a business is basically whatever purpose the owner is giving it, isn't it?
The examples I gave are all about business owners leading the company in that direction. It was the business owners being proud of the number and size of projects, for example. No middle management to blame - some of them actually didn't have any middle management (because the company was so small). And they didn't just "fool around at any cost to make the owner happy". It were the business owners making decisions based on what was important to them.
I agree that the personal motivation of employees doesn't have a direct effect on the purpose of a business. My point is that in my opinion, it would be good if self-fulfillment of the employees was part of the purpose of an enterprise - both because it would make for a better world, and because I'm convinced that luckily it would also make for more successful businesses ("luckily" because that makes it easier to evangelize inside a market economy).
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ReplyDeletePlease only post english comments, as I can't moderate other languages other than delete them. Thanks.
ReplyDelete