An Overview of Cost of Delay w/ Jim Hayden

This podcast is the first in a series we intend to do on Cost of Delay. This podcast features LeadingAgile Enterprise Transformation Consultant, Jim Hayden, and Dave Prior discussing the ideas behind Cost of Delay at a fairly high level. If you are new to the subject, or are struggling with understanding it, this may help provide clarity on what Cost of Delay is and how it works. In a future podcast on this subject we will look at Cost of Delay from a more Reinertsen-centric viewpoint. We also plan to do at least one podcast that offers a case study on how Cost of Delay has been put into practice within an Agile organization. We will look at how they are using it to understand and prioritize work at the project, program and portfolio level. Show Notes 00:09 Podcast Begins 1:12 Why (and how) we are talking about Cost of Delay 2:52 Some background on Jim Hayden 3:16 What is Cost of Delay 3:37 Example 1: Laptop Manufacturer with a set window of sales opportunity 4:22 Example 2: Selecting between two different projects based on time to develop and ROI 5:10 Is Cost of Delay vs. opportunity cost? 5:54 Understanding the impact of deferring a release 8:43 What if you delay your launch and a competitor beats you to the market and your customer 9:15 Example 3: Apple launching the iPhone 7 without the bluetooth headphones 10:15 Visualizing and understanding the Cost of Delay across multiple projects 12:08 Why understanding the Cost of Delay and decision making process is not solely about revenue 14:31 When new projects arise… determining where to prioritize them against existing work 15:57 The organization’s cost for doing the project 17:03 Additional factors to consider when understanding the value a project provides 18:00 Standardizing rules around how to prioritize work 18:59 Decomposing work to understand the value better 19:51 Defining “value” and Cost of Delay within your organization 21:57 Why it is so important for a Product Owner to have a method for prioritizing work that is understood by all stakeholders 23:04 When value is vague, Cost of Delay becomes more important 23:57 Example 4: Prioritizing 12 projects across an entire year 27:39 Adding a new project mid-year 29:10 How does sunk cost factor in? 30:37 Again with the logic! 31:29 We value starting things, not finishing things 33:27 Why we want to work in small batches 33:51 Where to find more information on Cost of Delay 34:26 Getting in touch with Jim Hayden 34:39 Closing Links from the Podcast An Introduction to Cost of Delay by Derek Huether https://www.leadingagile.com/2015/06/an-introduction-to-cost-of-delay/ The Principles of Product Development Flow by Don Reinertsen http://amzn.to/2m6u0xL Black Swan Farming http://blackswanfarming.com Contacting Jim Hayden You can reach Jim on the LeadingAgile site at www.leadingagile.com/guides/jim-hayden/ Email: jim.hayden@leadingagile.com Contacting Dave You can reach Dave on the LeadingAgile site at www.leadingagile.com/guides/dave-prior/ On Twitter at twitter.com/mrsungo Or on his personal site at: drunkenpm.net Feedback/Questions If you have comments on the podcast, or have questions for the LeadingAgile coaches that you’d like to have addressed in a future episode of LeadingAgile’s SoundNotes, you can reach Dave at dave.prior@leadingagile.com LeadingAgile CSM and CSPO Classes For information on LeadingAgile’s upcoming public CSM and CSPO classes, please go to: www.leadingagile.com/our-gear/training/ Use the discount code: LA_Podcast to receive a 15% discount on the class.