Beer Miles! A Product Owner Simulation Game Robin Dymond David Douglas Innovel LLC

1. Beer Miles!A Product Owner Simulation GameRobin DymondDavid DouglasInnovel LLC Agile 2008 Released under the Creative Commons License

2. Beginner’s Mind One of the most profound secrets of learning anything new is keeping what has been called a "Beginner's Mind".  To begin, we should empty our thoughts of all the preconceived ideas, concepts, techniques and methods that prevent us from receiving the new. This seems like a simple thing to do, but can be quite difficult in practice. At first we think we are being open, but as we drink from the new knowledge we detect residual tastes of the "old". Sometimes this new mixture can be sweet, like adding honey to tea, but sometimes even a little residue can curdle the whole mix, like adding lemon juice to milk. Another important part of developing the beginners mind concerns getting rid of the "Been There, Done That" concept that seems so prevalent in today's society. It may be true that you have been there, and you may have done that, but perhaps your conception of reality was not the whole concept, "the big picture" if you will.

3. Room setup • Rounds/pods • 4-6 per table • Projector for powerpoint • Printed business case (2 pg.) for each person • Printed A6 index cards, a 39 card set per table

4. Where are you?

5. Product Owner Training Agenda Where are you? Why this exercise? The trainer’s goals. Setup: Thinking about value. BeerMiles! From Business Case to Product Backlog Facilitation Notes

6. Why this exercise? • Product Ownership is a different role from traditional product management • The skills required for a good Product Owner (PO) are different • A key stumbling block is re-planning based on new information • Can we show that releasing in a few iterations really is possible? • Moving from business case to product backlog and first release

7. The Trainer’s Goals • Shift the mindset from: • Planning to delivery • From we can’t release to we must release • Shift the focus from guessing at value to testing for value • Focus on customer value not features.

8. The Product Owner’s World

9. The Value Conversation How do the best companies in the world think about value?

10. The Research… Good To Great by Jim Collins Found and researched over 6 years 15 companies that went from mediocre to great performance.

11. The Hedgehog Concept “The Hedgehog concept is a simple, crystalline concept that flows from deep understanding about the intersection of the three circles.”

12. What are you deeply Passionate about? What you can be the best in the world at What drives your economic engine What are your three circles?

13. The Hedgehog Concept “If you could pick only one ratio, profit per x to systematically improve over time, what “x” would have the greatest and most sustainable impact on your economic engine?”

14. Example: Walgreens • Key Metric: Profit per customer visit • Drove decisions regarding: • Store location • Store layout • Product mix • Supply chain requirements, etc. • "Walgreens' hedgehog concept is to run the best, most convenient drug stores with high profit per customer visit"

15. Example: Nucor Steel • Profit per ton of steel produced • Drove decisions including: • Getting into the foundry business • Small distributed mills • High level of innovation, new technology • Shared performance based compensation strategy

16. ZARA: World’s Fastest Mass Fashion Retailer • EU’s largest fashion retailer with over 1100 stores. • Concept to clothing in 1100 stores in 4 weeks, small batches, rarely have sales • New items entering stores twice per week • 11,000 designs per year vs. 4000 at Gap • EU wages up to 20 times more expensive • Air ship clothes on hangers for fast stocking in stores • Spend 0.3% revenue on advertising vs. 3.5% at competitors, • Invest in locations • “Fashion is like bread, you need to change it often” - Chairman

17. The Hedgehog Concept “A Hedge Hog concept is not a goal to be the best, a strategy to be the best, an intention to be the best, a plan to be the best. It is an understanding of what you can be the best at.”

18. The Business Case Business Case Undertaking a project needs to make economic sense. The return required to achieve a tangible output must justify the investment made. Like all other things Agile, the business case is a living document that will adjust as the situation changes. Product Owner Responsibilities • Craft and update the business case • Ensure all parties are continually aware of overarching goals • Ensure alignment of project to corporate strategic goals

19. The Business Case The effort to create a business case is usually commensurate with the level of investment and the perceived risk. There are no format or effort level rules as this is often a function of standard and acceptable practices within a company. • Don’t fall into the trap of analysis paralysis • If you go beyond two weeks of effort you have probably done too much

20. Product Ownership Framework Business Case Business Drivers Prioritization Categorize Capabilities Backlog & Release Plan Business case • Examine the business case, looking for key elements of value creation. • Look for opportunities to deliver value incrementally Business Drivers • Find the categories of value creation “Why do this project”, “What kind of value are we creating and for whom”, “What do I really care about”, “What do our customers really care about” Prioritization • With input from your stakeholders, prioritize the business drivers • Don’t allow everything to be a number one priority

21. Framework #2 Business Case Business Drivers Prioritization Categorize Capabilities Backlog & Release Plan Create and Categorize capabilities • Create high level capabilities based on customer value, with the help from the business. User stories provide a good approach. • Categorize the capabilities into which business driver they support. • Some capabilities may support more than one driver, pick the most relevant capability

22. Business Case Business Drivers Prioritization Categorize Capabilities Backlog & Release Plan Framework #3 Create Product Backlog and Release plan • Use your prioritized business drivers and list of capabilities to build the product backlog. • Don’t forget to consider items that require long lead times and infrastructure necessary to support the creation of value • Identify points where you think there has been enough value created to release capabilities to production

23. Let’s apply the framework…….. Let’s Apply the Framework

24. Business Case Business Drivers Prioritization Categorize Capabilities Backlog & Release Plan Value Creation and Business Scenario Part 1 -- Read the business case handout. Exercise -- At your tables determine what are the top 3 business drivers for this new business?

25. Business Drivers Discussion • What was your conclusion and how did you arrive at it?….. • What other data do you think you would need to make you feel confident about your decisions? • If you’re receiving internal and external pressures regarding business drivers/priorities, how would you handle that?

26. Business Drivers Discussion Driver 1. Be first to market Driver 2. Drive market share through convenience Driver 3. Delight the customer to increase usage

27. Business Drivers and Priorities Part 2 - What are the high level capabilities for each of the 3 business drivers? Exercise -- At your tables, group the high level capabilities provided with the Business Driver that they most directly support.

28. Capabilities Discussion • Discussion questions: • Some capabilities weren’t called out in the business case, how did you deal with them? • Did you have trouble sorting any of the items? • If you had 150 detailed requirements, would it be easer or harder? How would you simplify? • What obstacles / hurdles did you encounter during this exercise? • How did you feel when having to make these decisions? Did you have enough, not enough, or more than enough to make a confident decision? • Who would you need to communicate the results to?

29. Agile PlanningPoints and Relative Estimates • Agile teams estimate work in using different techniques and levels of precision • Story Points or Ideal Hours/Days are used to estimate User Stories on the Product Backlog • Effort Points or Ideal engineering hours are used to estimate tasks on the Sprint Backlog • Considerations that the team uses to estimate • Difficulty, Time required, Organizational challenges, Uncertainty, Number of participants, and Dependencies • Point estimates are relative measures of size (1,2,3,5,8,13,) • Ideal Days/Hours are measures of effort

30. Agile Planning: Velocity • The amount of work (Story Points/Ideal Hours), that an Agile team can complete in 1 iteration. • A fixed size team working on a project has a stable velocity. • Well functioning teams cannot influence their velocity much. • Ideally, Agile teams are fixed in size, and all resources should be at least 50% dedicated to the project, with no more than 2 projects at a time. • Velocity is impacted by: • changes to the team, removal or additions • uncertainty in requirements • product owner availability to the team • barriers – organizational, technological, SME availability, process overhead • command and control – disempowerment of team to self organize around the work • pushing too much work into the team (Mura)

31. Business Case Business Drivers Prioritization Categorize Capabilities Backlog & Release Plan Building the Product Backlog Part 3 - Building the Product Backlog for delivery of valuable features Exercise -- Create a product backlog using the stories that you have been given. Consider the business drivers, priorities, and any infrastructure as you prioritize. Identify when you think you will have your 1st release. Determine when you might release additional features into production • Team’s projected velocity is 100 points • The iterations/sprints are 3 weeks long

32. Product Backlog Discussion • What was it like to plan with the information you had? • What looks risky to you? • When will you tackle it in your plan? • How would you communicate this plan?

33. Building the Product Backlog Part 4 – Dealing with changes to the plan! Scenario 1: Team has completed the first iteration, the velocity is 50 points due to team learning about each other and the business domain, unplanned external dependencies, and on-boarding of new resources. Exercise – At your tables, use the empirical data supplied to re-plan your product backlog and releases while still meeting the goals of your business case.

34. Product Backlog Discussion • How does this affect your release plan? • How might you increase the team’s velocity? • How would you manage your stakeholders/what would you communicate? • Is there any way you can make your date?

35. Building the Product Backlog Part 5 – Dealing with more changes to the plan! Scenario 2: Line of business #1 wants their first partner to be Brinker, with 1600 upscale restaurants. Line of business #2 wants their first partner to be 7-11 and a “speed pass” card for beer points for use at POS. Exercise – At your tables, use the empirical data supplied to re-plan your product backlog and releases while still meeting the goals of your business case.

36. Product Backlog Discussion • How would you resolve this conflict? • How would you ground your decision? • How often would you expect to go through this type of exercise on an Agile project?

37. A Final Exam! • Is it OK for a project to have more than 1 product owner? Why? • What is the Product Owner’s primary responsibility?

38. The Punch Line • A large financial services company actually did this type of product (not beer) • A co-marketing agreement with the partner was put in place. • They added two fields the account management screens • They managed the rewards with a spreadsheet • When someone claimed rewards, they went to the partner, bought gift cards, and mailed them out. • No new applications, environments or hardware were required.

39. Facilitator Notes • What are the key take aways people should come away with? • How does the framework facilitate prioritization? • What are the “traps” that are setup for the participants? • Are there other issues you might use? • What are the issues you need to emphasize? • How does maximizing value play into this exercise? • How would you debrief this exercise?

40. Facilitator Notes • How does incremental increase in information change the prioritization? • What would you emphasize when doing this training? • How would you debrief this training?

41. Where Can I Get More Information? • Find all the materials presented today at: • http://www.innovel.net/?page_id=65 • Good to Great by Jim Collins • Do it Wrong Quickly by Mike Moran