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What is meant by "Corporate Value" (or Business Value) ?

Edited

My name is Calogero Bonasia, some people call me Kalos. I am interested in Organizational Intelligence and Collective Knowledge.

I write a lot, I write often. It's a way for me to remember what I read or what I deal with for work. When I was young I was an officer in the best air force in the world, the Italian Air Force, and I learned what it means to "work in a team".

To be "team."

I would like to contribute to this community channel, provided the channel manager agrees. I'm going to try with an article where I talk about value to companies. If you understand what is "valuable" to the company, you understand what is valuable to your topic. I believe.

What is meant by "Corporate Value" (or Business Value) ?

Finally, "How much will this save us time and money in the future?". Future value increases the chances of achieving one of the above values more easily in the (near) future by investing in innovation and learning: e.g. a new framework (custom or open source) that can be used for future development.

In fact, the Scrum Guide does not provide a definition of "value" at all, but strongly insists that a Team should provide value and that the Product Owner is the key person to decide what has value and what does not.

But what if there is no good definition of value ?

I can easily imagine a Scrum Team running perfectly with its Sprints, delivering high quality functionality at a steady pace for the Product Owner, but actually delivering nothing of value to the organization.

So "doing Scrum" (only) won't magically lead to more value. It is still very easy to risk working on the "wrong things at the wrong time".

So let's look at what the different types of business value might be.

We said that the work done by a Team should somehow benefit the organization or company as a whole.

Corporate value is an informal term that encompasses all forms of value that determine the long-term strength and well-being of the company.

We can try to say it better in other words: we need to have a way to determine if something in the backlog is "the right stuff" or "the wrong stuff," and when setting priorities we should be able to tell if it's "the right time" or "the wrong time.

Scrum is geared towards software development, although it can easily be applied to other types of work. I think we can distinguish different types of value that can be generated for the company/organization from the work done by a Team during a Sprint.

Let's start with the key question : "How much revenue or profit does this work have?". We are talking about "Business Value", it is the most obvious and consists of features or work that translates directly into profit, such as:

  • a new version of a software package that customers want to have and are willing to pay for;
  • a new feature that can be paid for, such as modules in on-demand Web apps;
  • changes that reduce operational costs, such as reducing the number of servers required to run an application or service, achieved by improving the code or cheaper distribution to customers;
  • improving the subjective value of the application so that people are willing to pay more for it (in Lean Six Sigma this is considered quality or customer value, one example for all being Apple's business model).

What is "Market Value" instead?

In this case, the question we ask is "How many new customers will we be able to serve?".

Market value increases the potential number of customers, through features that attract a new group of customers; transposition of applications to other platforms, for example from iOS to Android, adding features that competitors don't have (or implement better).

"How much time or money can we save?".

This is about the value of efficiency: it increases organizational efficiency and therefore reduces operational costs, such as:

  • the amount of errors in a process or increase speed (by automating all or part of it);
  • increasing the usability or quality of an application to reduce customer service load;
  • reducing the amount of time required to configure new customer environments or deploy them;
  • reducing time to market.

Next, let's ask, "to what extent will it decrease the likelihood that a customer will leave?"

Customer value increases the likelihood that customers will continue to use your product ("make the customer feel better"). For example, improving usability in an application or adding a new feature that is commonly requested by users.

Finally, "How much will this save us time and money in the future?". Future value increases the chances of achieving one of the above values more easily in the (near) future by investing in innovation and learning: e.g. a new framework (custom or open source) that can be used for future development.

Or reduction of technical debt in the code to make future changes in the code easier or less error-prone.

There are many other types of value that can be identified, but I think they can all be narrowed down to the set I just outlined.

To conclude then, a Product Owner should be able to evaluate every to-do in the backlog and should be able to translate it into (business) value for the organization, as specifically as possible (but some pragmatism is advisable here).

The Team must in turn demonstrate that what it is doing is "the right thing (activity) at the right time".

If not, or if the arguments are not strong enough, the Product Owner should avoid wasting valuable time, effort and money on work that does not move the organization and employees forward.

The book "Business Model Team. Discover how your organization really works and how your employees create value" can also be found on Amazon (here https://amzn.to/3s9ojzo )

 

2 comments

Hi @Calogero Kalos Bonasia

thank you for the reminder to think about what's actually value for our teams - and what value does some task contribute to.

Since you mentioned, you write often, I'd like to give you some feedback about this long article: It would be even better if you apply some formatting to highlight the important pieces or headlines to structure your content.
That would help me as a reader a lot.

Cheers,
Matthias.

Like Calogero Kalos Bonasia likes this

@Matthias Gaiser _K15t_  

thank you for your attention, first of all, and for your valuable suggestions. I have made a few modifications. I don't know if this is what you need to read my article better. Consider that on this Atlassian system it's very very, but I say very uncomfortable, not to say "difficult" to write articles, because I don't understand why if I scroll down the text while writing it, the bar with the formatting tools remains at the top of the screen until it disappears. You need to move around all the time. Atlassian I'm sure can do a lot better. Don't you agree too?

Like Anne Saunders likes this

That's already way better - 👍.

I have to admit I rarely use the toolbar (which is annoying as you stated), but rather shortcuts like:

  • Bold - Cmd + B or Ctrl + B
  • Italic - Cmd + I or Ctrl + I
  • Underlined - Cmd + U or Ctrl + U
  • Linking - Cmd + K or Ctrl + K

I'm not sure about other shortcuts though, but I mostly use bold and linking anyways.

Hope that helps a bit,
Matthias.

Like Calogero Kalos Bonasia likes this

@Matthias Gaiser _K15t_  yes I know the keyboard shortcuts, I use them in fact. But I wanted to point out the problem with the bar either put it in and make it work well, or take it out altogether. Anyway, since the article is about teams, what do you think about this topic? Apart from the suggestions on how to write in nice handwriting, which of course I thank you for, I will keep in mind.

Darryl Lee Atlassian Team May 16, 2022

Thanks a lot for sharing this @Calogero Kalos Bonasia !!

Gotta share this with my team for brainstorming.

Like Calogero Kalos Bonasia likes this

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