Saturday, January 23, 2016

Wide-band delphi estimation for Business Value - 1

I and many many teams have been doing wide-band delphi estimation of business value for several years now.  Let me report how we do it, which seems to be successful.  In fact, as far as we can tell, it is more successful than any other approach.

What is it?

You may want to look up Wide-band delphi estimation in Wikipedia. And I recommend you read James Greening's article on Wide-band Delphi estimation for effort. It is, most essentially, expert estimation.  It is said to have been invented by Rand Corporation in the 1950's, and they did do a lot of research then. In my opinion, it must be older. The ancient Greeks talked about the oracle of Dephi millenia ago. So, in this case, we mean gathering, for a given set of work, your best experts on business value in that area.  I recommend about 5 people (5 'experts').  And, as with the well-known Planning Poker (cf Mike Cohn), we use the Fibonacci cards, and have then estimate relative business value.  And that is done after they pick the highest business value card (user story, Product Backlog Item, etc), and the estimates (guesses, opinions) are made in comparison to that highest one.  That highest one become the 'reference story' and it is arbitrarily given 100 BVP.  (You could give it another high number.  100 BVP seems to work well.) We will explain more about the basics, but that's the main idea.  Expert estimation. I should note that Mike Cohn asked me to call this 'priority poker' to distinguish it from 'planning poker' for effort.  I like that idea.


There might be many answers to this question.  Here is why I think this technique is valuable. First, I think the number (the Business Value Points assigned to each card, or 'the guess') will be very valuable.  In several ways. But, in my opinion, the most valuable thing is that it drives more useful conversations and learning. It is my opinion that the key thing that knowledge workers do is learn, or, you might say, create knowledge.  And that happens best in a small team, where diverse perspectives enable them to 'fight', disagree, examine assumptions and alternate perspectives, and then start to agree, or at least, average their opinions. And the exercises of priority poker enables them (and those watching them) to: (a) see the same elephant (b) become more motivated (see they see better where the juice is) (c) share the tacit knowledge We will discuss the usefulness of priority poker more later.

Will it work for you?

Yes. There really is nothing more to say. It is fair to say that before they have done it, you or they will wonder "will it work for me?"  But after they have done it, there is never any question. I think I have heard accurately that if it is introduced to senior people (of some outspokenness, we will call it) by a person who does not have confidence, then the process can get derailed.  But at least I can honestly say that no team that I have worked with has ever refused to do it, or found it un-useful.  They have found, either during or after the exercise, that 'I wish that [George] had been here."  But that's a different kind of problem. So, because I have done this so often with so many different kinds of teams and situations, I am confident in saying 'yes.' Am I right?  Well, of course, almost surely, as with Newton's Laws of Physics, I am wrong to some degree. Surely out there in the wide world, there is at least one place it will not work.  So, use with some caution. *** See Part 2.  

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