6 things that you need to master as a product owner. Part 4

Understanding Evidence-Based Management (EBM) in Scrum

Evidence-Based Management (EBM) is a framework developed within the Scrum methodology to help organizations make informed decisions based on empirical data. EBM focuses on evaluating and improving an organization’s value delivery and innovation capabilities by emphasizing four key value areas (KVAs). These areas are designed to provide a comprehensive view of the organization’s current performance and its potential for improvement. Let’s delve into each of these four key value areas to understand their significance.

1. Current Value (CV)

Current Value assesses the value that the organization is currently delivering to its stakeholders. This includes not only financial metrics but also non-financial factors that contribute to the overall satisfaction and engagement of customers and users. Metrics in this area help organizations understand how well they are meeting their existing commitments and delivering value to their customers.

2. Unrealized Value (UV)

Unrealized Value examines the potential value that the organization has not yet captured but could achieve. This area encourages organizations to look beyond their current operations and identify opportunities for growth and improvement. By understanding the unrealized value, organizations can prioritize initiatives that will deliver the most significant impact.

3. Ability to Innovate (A2I)

The Ability to Innovate focuses on the organization’s capacity to develop new products, services, or processes that can add value to the business and its customers. This includes measuring the effectiveness of the organization’s practices in fostering innovation and bringing new ideas to market. Metrics in this area might include the rate of product innovation, the speed of iteration, and the organization’s agility in responding to market changes.

4. Time to Market (TTM)

Time to Market measures the speed at which the organization can deliver new and valuable offerings to the marketplace. This area highlights the importance of agility and efficiency in the development and deployment processes. By improving time to market, organizations can ensure they meet customer needs more rapidly and stay ahead of the competition.

Why Objective Metrics Matter

EBM emphasizes the use of objective metrics across all four key value areas. Objective metrics are crucial because they provide a clear, unbiased view of the organization’s performance. They enable leaders to make informed decisions based on actual data rather than assumptions or gut feelings. Using objective metrics, organizations can track their progress over time, identify areas for improvement, and validate the impact of changes made.

Conclusion

Evidence-Based Management (EBM) offers a structured approach for organizations to measure and improve their value delivery and innovation capabilities. By focusing on the four key value areas of Current Value, Unrealized Value, Ability to Innovate, and Time to Market, organizations can gain a holistic view of their performance. Utilizing objective metrics within these areas enables organizations to make informed decisions, prioritize effectively, and drive continuous improvement in their operations. Adopting EBM within the Scrum framework can significantly enhance an organization’s agility, efficiency, and overall value delivery.

About Effective Agile

Ralph Jocham is a Change Agent in Scrum // Agile // Coaching // Evidence Based Management and also a Professional Scrum Trainer based in Europe.

As one of the first Professional Scrum Trainers in the world, Ralph has worked directly with cocreator of #scrum, Ken Schwaber, and has played an integral part in the course development of the #PSPO (Professional Scrum Product Owner) as well as the delivery of all #scrum.org certified courses.

If you’re looking to invest in training that transforms and empowers teams to successfully adopt #scrum or #agile, and create high-performance #productdevelopment environments leveraging the agile values and principles, visit our Professional Scrum Training page.

If you would like to work with Ralph and company as an #agilecoach, #agileconsultant, or powerful change agent to get your team back on track and on the road to high-performance #agile #productdevelopment, connect with Ralph Jocham.

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