The Value to Effort Ratio

As Lean thinking began to permeate the Agile community in the mid-00’s, a set of guiding principles emerged. The Scaled Agile Framework (SAFe) website includes a list of these principles and some good definitions. The first Lean-Agile principle is take an economic view.

You may ask: An economic view of what? Well, basically everything we do, at all levels. One way to think about it is to consider how much value we obtain compared to the effort necessary to obtain it. I like to call that the value-to-effort ratio.

A value-to-effort ratio greater than 1.0 might be okay. A value-to-effort ratio less than 1.0 means we’re expending more effort than the result is worth.

The idea applies to all sorts of activities.

Strategic Activities

Does your organization flounder when trying to guess what customers need, launching expensive initiatives more-or-less randomly in hopes of striking gold — or does leadership mindfully apply specific models, methods, and measures to understand the market and to design strategies to maximize value? Which approach do you think is more likely to yield useful results with a minimum of time, cost, and stress?

Tactical Activities

Does your organization manage its technical infrastructure on a reactive basis, updating technologies only when something breaks — or do engineers mindfully plan and execute ongoing infrastructure management based on projections of capacity needs and anticipated changes in products and advancements in technology? Which approach do you think is more likely to yield useful results with a minimum of time, cost, and stress?

Day-to-Day Work

Does your technical staff perform regression testing, provision servers, migrate code through environments, integrate software components, and other basic activities using mainly manual methods — or do people mindfully apply generally accepted good technical practices for software development, software testing, and devops? Which approach do you think is more likely to yield useful results with a minimum of time, cost, and stress?

Organizational Improvement

To achieve improvements in revenue, profitability, customer service, delivery performance, product quality, staff morale, or other factors of interest to the organization, do people try random ideas on an ad hoc basis according to intuition, popular buzzwords, or the last article they read — or do they obtain baseline measurements that will show the effects of changes, and then use the scientific method to apply specific models or to falsify specific theories? Which approach do you think is more likely to yield useful results with a minimum of time, cost, and stress?

It’s Always Been Done That Way

Beware the common trap: “It’s always been done that way.” The next time you’re about to do something you already know how to do, pause and ask yourself if there might be another way to do it that yields a higher value-to-effort ratio.