Proft Streams BookTranscript:Agile FM radio for the agile community. Today I'm thrilled to have Luke Holman with me in the podcast here of Agile FM and I can't believe After all these episodes I had so far I haven't had you on the show, which is a big miss. You are a renowned expert in agile methodologies an author. And I think a lot of people know you from the innovation games which is a framework for collaborative decision making problem solving.You have experience that dates back way, way back into the 1990s, pre Agile, but also I heard recently that you were involved in the 2003 Agile conference. So yeah, a while back. Welcome to the show, Luke. [00:00:46] Luke Hohmann: Joe, I am so happy to be here. I've known you through the community. We've seen each other at conferences.And so it's a, it's quite an honor to be here. Thank you so much for inviting me to participate. Thanks [00:00:58] Joe Krebs: Yeah, no, absolutely. We could talk about the innovation games and fill an entire show, but today we could, but today we want to talk a little bit about value profit stream, the agile community as often. This is the recordings taking place on the 25th of June, 2024 is a little bit in a turmoil. The Agile community as a whole, there seems to be some different kind of directions people are going, looking at the roles. It's maybe a good time to talk about what value is, how we can present value because at the end of the day is, it's like, how do we sell agility within an organization or for organizations?[00:01:44] Luke Hohmann: I think it'd be a good thing to talk about. There, there's so many aspects of this that are interesting, but let's try a few. And I'll also talk about the rule of self interest in the Agile community. When we talk about value we think about it in terms of our Profit Streams book and our Profit Streams work as What are the set of tangible and intangible benefits that a product or service we use solution as the single term for product and service or any blend thereof.So it's just a little easier because we're here to solve problems for our customers. So we think of both the tangible and intangible benefits. And for the tangible benefits, we help companies create mathematical equations that capture the benefits. And we often work with our clients because technical people are good at being efficient in terms of doing things like saving time.But the reality is most companies don't need to save time. They need to have the time converted into a metric that they can understand for their business purposes. One of the examples we use in our book, and it's been proven in many of our client engagements, Is we were working with a trucking company, and they were going to be buying software that saved their drivers time.So drivers in the trucking industry have to keep detailed logs of their hours of service to make sure they're taking breaks, etc. And this solution enabled the data to be acquired automatically by connecting into the engine bus. And they knew if the truck was on and if it was moving and all that kind of technological internet of things capability that we love.And there's so many things that we can do. So the company that we were working for, and this was Qualcomm had the solution. They went to the trucking organizations and said, Hey, we can save you 20 to 30 minutes a day in driver time. And Joe, we were able to prove this. Absolutely through, the data, like the data was very clear.And the trucking company's executive said we don't really care about that. Because our drivers are union and they are paid for eight hours. So saving me 30 minutes of a driver's time doesn't actually save me money. It doesn't do anything for me. So we had to go back to the drawing board with Qualcomm and find out how to reroute drivers using the new systems so the trucking companies could deliver another package or two in a day because that's how they made money through package delivery.Or the other part of this would be the intangible side and intangible benefits can be quantified on the intangible side for challenging deliveries. We were able to allocate more time in the driver's schedule so that customer satisfaction improved. And as customer satisfaction improved, we would see less churn among customers.Oh, my package was delivered well. I want to use this company again. My, my package was delivered without any breakage. I want to use this company again. So the first step of value is to actually take a step back and try to quantify the tangible and intangible aspects of value. And then I'll just real quickly, I'll finish that off.The second of the determination of value is what we call direct and indirect benefits. A direct benefit is something that you will recognize as a benefit and it materially affects your purchase or use decision. An indirect benefit is something that you recognize, you'll say, yes, the benefit exists, but it doesn't influence you.And I'll give you a kind of a standard example....
