In our working environments, we're always looking to create value, but what is value, why is it important, and how is it created in the first place? In this video, we're going to take a short look at the idea of value and try to answer some of those questions.

"What's valuable to me is time. It's the one thing I don't have enough of. I never have enough time to do all the things I wanna do every day."

"Honesty is valuable to me. I want to be able to trust those I work with and spend time with on a day-to-day basis."

"Sleep is valuable to me so that when I wake up, I'm refreshed, rejuvenated, and can get on with my day."

As you can tell, the problem with value is that it's subjective. Any number of things could provide the basis for what value is. Perhaps it's differentiating yourself from your competition or eliminating your competitors' advantages. Maybe it's reducing costs or reaching new markets. Maybe it's just meeting basic requirements like achieving compliance. The important thing, though, is that whatever value you're aiming for must be clear and obvious to the agile team. In other words, everyone who's involved in creating a product or service needs to understand exactly what value they hope to achieve with it.

There are a few reasons why value can be really, really important. So the first is the prioritisation of work. During sprint planning, the development team are looking to pull items into the sprint backlog from the product backlog. Work needs to be prioritised in the product backlog by the value it'll provide to the stakeholders and, of course, to the organisation.

Next up, understanding the value we are trying to create provides us with a focus. This is why we're doing what we're doing. It gives us a reason, something to work towards. Understanding what value we're trying to create also helps us align work we are doing with other work we have done and with the rest of the organisation. Let's say we're trying to create something that must be compliant, but your organisation generally tries to create products and services that differentiate them from the competition. By aligning to your organisation's vision for value, you can know that you need to create something that doesn't just meet compliance. It also needs to be unique and interesting to consumers.

Understanding value also removes waste. We're not going to do work that isn't valuable because we understand what value we're trying to achieve. This means we won't waste resources on things that don't add the value we need them to. Last up, if you understand what value you're trying to create, you can get a clear idea of what the return on the investment should look like. When an organisation invests resources into a project, they expect a return of some sort. Often this will be in the form of revenue, but it could be something else. Whatever it is, as long as the agile team understands what the goals are, they can align themselves to help achieve it.

Well, the link between agile and value is that agile builds in an understanding of value from the get-go, from the requirements and the user stories. User stories are crafted around our understanding what the customer wants and what the perceived value of that particular product or feature is. There are other areas in which value is clarified. There are other opportunities such as that, demos.

During sprints, the customer is invited to see and confirm that value has been created from the work that the development team have been involved in that sprint. The feedback that they get from the client confirms that value has been created. Overall, agile ways of working are one of the reasons why they are the best ways of generating value is because agile is structured in such a way that work is delivered in an incremental and iterative way that requires value to be created every sprint and can be validated by the customer as being produced every sprint. So agile ways of working, therefore, give value faster than sort of big bang waterfall approaches to delivery that results in value being created at the end of the project. 

-So those are some of the reasons why understanding value is really important, but there is one last thing we need to discuss before the end of this video, and that is the idea of the co-creation of value.

Previously, the idea of value was pretty linear. We as an organisation create something we provide to our stakeholders, and that's value. But today we talk about the co-creation of value. This is the idea that we as an organisation create value by collaborating with our stakeholders. We work with them, take on their feedback, and constantly look to deliver work in line with their expectations. They, in turn, are always looking to be in conversation with us and will tell us what they want. We take on what they say they want, and we work together to create that product or service.

That's it for this video. Although co-created value is subjective, it still needs to be well-defined. Having a well-defined idea of what value is for the organisation and for each product or service has many benefits impacting ways of working, all the way through to strategic thinking.

Lectures

• How Do I estimate?
• Measuring Progress and Kanban
• What is a Project?