December 29, 2016

Scrum Myths: Velocity = Value?

I would like to kick off a series of posts in this blog trying to debunk some common myths about Scrum. Many of them arise sometimes from a poor understanding of the Scrum Guide, and even more often, from not having read it at all.
What is velocity?
According to the Scrum.org glossary, Velocity is “an optional, but often used, indication of the average amount of Product Backlog turned into an Increment of product during a Sprint by a Scrum Team, tracked by the Development Team for use within the Scrum Team.”

A couple of posts in this blog, by Derek Davidson and Hiren Doshi, show velocity as a useful metric to forecast how many items can be delivered in a sprint or how many sprints may be needed to achieve a release.

Gunther Verheyen makes a couple of interesting points about velocity in this post. The first about its transparency: if the increment is really undone, velocity is not a valid indicator. The second is about trying to see velocity as a commitment: in an empirical process control, we accept that what will happen is unknown.
What is value?
Value is a more general concept. According to the Oxford Dictionary is “The regard that something is held to deserve; the importance, worth, or usefulness of something”. Let’s consider that money is a proxy of value in most circumstances, and therefore a valuable product should increase revenue or decrease costs for the organization that uses it.

In the context of a Scrum Team, value is only created when the product (increment) reaches the customers, it is useful to them and they start obtaining benefits from using it.

Measuring value is not a trivial task. Value indicators need be identified and they should be aligned with the product vision and strategy. Good places to learn further are the Professional Scrum Product Owner course or the Evidence Based Management approach.

Once value indicators have been defined, they can be used to estimate the value of individual Product Backlog Items, and therefore the value created by a product increment could be calculated as the sum of the value of the PBIs included in the increment. Tools such as Value Burnup are useful ways for the product owner to estimate the value delivered. However, the real value can only be measured once the product has been released and is being used.
So, does velocity = value?
As previously described, velocity and value are very different things. The first is a tool that can help the Scrum Team to self-manage during the product development, while the latter is a way for the customer to evaluate the usefulness of the product already being used.
Closing: a worrying interpretation
A worrying interpretation that derives from confusing velocity and value could be “the more software is released, the more value is created”. A product backlog item that is not useful to the customer, even if their designers think so, does not create value. A product backlog item released with defects or not meeting the Definition of Done can even create negative value, because it can undermine the trust of the customer in the product, disrupt their operations and also produce unexpected work in the future, such as bug fixing or extra work to build something on top of a bad quality product.

Making these concepts clear to all the stakeholders of the product, and especially to the product owner, could help avoid falling into the vicious thinking of “the more is always the better”. As Jeff Patton puts it in his book User Story Mapping: Minimize the output (code size), maximize the outcome (value).