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In this episode, Dan and Sam are exploring the topic of evidence-based management, which was first mentioned in Episode 101, \u201cAre Scrum Masters Expendable?\u201d In that conversation, they discussed some of the things that Scrum Masters could be doing beyond the team and one of them is in helping manage the product suite.

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Dan and Sam unpack the concept of evidence-based management and share how this model can be used alongside Scrum to help people and organizations improve the way they deliver products and improve the value of their products.

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This episode is rather timely too, with the newest edition of the Evidence-Based Management Guide just being released on Scrum.org! If you\u2019re new to EBM (or didn\u2019t fully understand it before) there is no better time than the present to learn about it.

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Key Takeaways

What is evidence-based management?

It\u2019s an empirical approach to help organizations

EBM provides a framework to get a better feel for what is valuable so you can base the decisions you make on actual data (rather than gut-feeling) and run experiments that improve metrics

Through intentional experimentation and evidence, EBM enables organizations to systematically improve their performance over time and refine their goals based on better information

The EBM model:

It has five key elements:

A Strategic Goal \u2014 something important that the organization would like to achieve; this goal is big and far away with many uncertainties (similar to a product goal) \u2014 because of this, the organization needs a series of practical targets, like:

Intermediate Goals \u2014 achievements which indicate that the organization is on the path to its Strategic Goal (the path to the Intermediate Goal is often somewhat uncertain but not completely unknown) (kind of like a release goal)

Immediate Tactical Goals \u2014 critical near-term objective toward which a team or group of teams will work help toward Intermediate Goals (similar to a sprint goal)

A Starting State \u2014 where the organization is relative to the Strategic Goal when it starts its journey

A Current State \u2014 Where the organization is relative to the Strategic Goal at the present time

EBM focuses on four Key Value Areas (KVAs):

These areas examine the goals of the organization

As an organization, you want to measure and evaluate these

Current Value (CV) \u2013 the current value that the product is delivering today

The purpose of looking at CV is to understand the value that the organization is delivering to customers and stakeholders at the present time

Organizations need to be continually re-evaluating and looking at customer/user happiness, employee happiness, and investor and stakeholder happiness

CV helps the organization understand the value that their customers or users are experiencing today

Unrealized Value (UV) \u2014 additional/potential value the product could realize if it was pursued

UV could be features that the organization hasn\u2019t considered developed yet (but could) or markets that the product could serve (but doesn\u2019t currently)

The organization should be thinking about: \u201cCan we get any additional value out of this product?\u201d and whether or not it\u2019s worth it

Comparing UV and CV can help an organization decide whether or not they should continue investing in a product

Time to Market (T2M) \u2014 how long it takes the organization to deliver new value

The reason for looking at T2M is to minimize the amount of time it takes for the organization to deliver value (without it, the ability to sustainably deliver value in the future is unknown)

Ask: \u201cAre we spending too much time estimating?\u201d

Questions the organization needs to continually re-evaluate for T2M are: \u201cHow fast can the organization learn from new experiments and information?\u201d, \u201cHow fast can you adapt, based on the information?\u201d, and \u201cHow fast can you test new ideas with customers?\u201d

Ability to Innovate (A2I) \u2014 the effectiveness of the organization at delivering value

The goal of A2I is to maximize the organization\u2019s ability to deliver new features and capabilities that customers will find valuable

When evaluating A2I, an organization should be asking: \u201cWhat is preventing us from delivering new value?\u201d and \u201cWhat prevents customers from benefiting from the innovation?\u201d

Having a hypothesis and executing an experiment:

A hypothesis is a proposed explanation for some observation that has not yet been proven or disproven

After forming a hypothesis, run the experiments, and then inspect the results

Was the hypothesis proven or disproved? Once you have this data you can evaluate it and make adjustments as needed

\u201cExplicitly forming hypotheses, measuring results, and inspecting and adapting goals based on those results are implicit parts of an agile approach. Making this work explicit and transparent is what EBM adds to the organizational improvement process.\u201d \u2014 EBM Guide

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Mentioned in this Episode:

Evidence-Based Management Guide | Scrum.org

Agile Coaches\u2019 Corner Ep. 101: \u201cAre Scrum Masters Expendable?\u201d

Agile Coaches\u2019 Corner Ep. 78: \u201cExploring OKRs with Felipe Castro\u201d

Three Horizons Framework

The Anarchy: The East India Company, Corporate Violence, and the Pillage of an Empire, by William Dalrymple

The Creative Habit: Learn It and Use It for Life, by Twyla Tharp

Hillbilly Elegy: A Memoir of a Family and Culture in Crisis, by J.D. Vance

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