In high competition markets, how does scrum product development help acquire and retain customers?
It depends.
On one hand, it doesn’t. Scrum is a product development framework, but it doesn’t do the work for you. It doesn’t create the value for you. It doesn’t solve the problem for you. You need to do those things yourself, as a team, as an organization.
Remember the agile value, individuals and interactions over processes and tools? The scrum framework enables teams to do great work and achieve competitive advantage in the markets they serve but if they aren’t creative, collaborative, or pioneering solutions then it doesn’t matter what process they follow or what tool they employ, they will fail.
On the other hand, if you have leaders with great business acumen supported by collaborative, creative, and engaged product development teams; scrum will be a game-changer in your organization and facilitate heaps of competitive advantage, improved customer acquisition, and improved customer satisfaction.
Capturing and Creating Value
Market Value
First, let’s look at market value.
Market value is how well your current product, features, and services deliver value to customers.
You might measure things like customer satisfaction, employee satisfaction, customer retention, and market share. You may analyze how well you are creating and capturing value for customers relative to how effectively your competitors are doing those same things in the market.
You will also have a finger on the pulse of how well utilized your product is. Hopefully, you have lots of telemetry that enables you to see what buttons are being pushed, what features are being employed, and so forth to understand how much value is being derived from your product.
This helps you understand current value.
Your focus should also be on uncaptured or unrealized value in the market.
This is a key focus of Professional Agile Leadership – Evidence Based Management.
Unrealized value is the value that you aren’t yet capturing or creating in your product. It is a brief look into the future to ascertain what you could be doing better, where your customers are currently underserved, and anticipating what they will consider valuable in the months and years to come.
You could be measuring customer satisfaction gaps, competitor analysis, and market trends to figure out what should be on your product backlog and how that work should be prioritized.
These two things, current and future value, scrum can’t help you with.
Sure, the culture of high-performance and excellence, combined with a strong focus on creating products and features that truly delight customers, will help create an environment where these elements of product development can thrive, but the framework itself won’t do the work for you.
So, acquiring and developing a deep understanding of market value is the role of leaders and key players in the organization rather than the developers working in a scrum environment.
Organizational Capabilities.
We are looking at organizational capabilities from two perspectives:
- The ability to innovate. In essence, how effectively can we create value.
- The ability to execute. In essence, time to market.
These are two elements that people inside your organization do have full control over.
Market value is a business discussion and scrum can’t help you with that, except in making it transparent that the business discussion needs to happen in order to create value for customers.
Execution is where Scrum starts to come into play.
Again, it can’t do the work for you but what it can do is highlight where you have problems such as skills gaps, bottlenecks in the effective flow of work through the system, or organizational policies that prevent product development teams from delivering continuous value to customers.
The maximum cadence for delivery in scrum is four weeks.
That’s the longest it should take to deliver a working, valuable product or feature to a customer and the maximum period that you would work without getting feedback from customers.
If we aren’t able to deliver that working product at the end of each sprint, we have a problem that needs to be solved. Maybe it’s better engineering practices. Maybe there are skills that must be acquired. Maybe we need to address the team dynamic. Maybe it’s an organizational policy.
It’s said that scrum doesn’t solve problems for you, but it will highlight the problems you do have.
It will show you what you need to improve, why you need to improve it, but it won’t show you how to improve it. That’s on the product development and leadership teams.
Empirical Process Control, which is the foundation of Scrum, encourages us to develop a hypothesis, design and run a quick, cheap experiment to validate or disprove that hypothesis, and use the data and feedback we gather to adapt and respond appropriately.
This is where scrum can be incredibly helpful in product development.
Until you have validation from a customer or market that your idea has merit, it is perceived value rather than actual value. It could be a great idea, but nobody wants to pay for it. It may be a marvel of software engineering but end-users don’t need that functionality, and so it’s not a great investment of your money, time, and efforts.
Empirical Process Control and Scrum facilitate rapid feedback loops and empower teams to rapidly adapt and respond to data and feedback. In this way, scrum can help product development and leadership teams acquire and retain customers because the focus is always on validating whether your product or feature creates value for that customer.
Whether it helps a customer solve a problem or get a specific job done effectively.
Getting things done.
Scrum has an intense focus on getting things done. Ideally, all those things have value and delight customers, but in practice, it’s often more difficult than that.
If you have 10 ideas about what might delight customers and create competitive advantage, you need to produce those items and get them into the hands of your customers as quickly and effectively as possible.
If your goal is to deliver one item that blows customers away every month, you’re going to need to deliver 10 items to ensure that you hit that target. Not every idea is going to land and not every item is going to create the value you imagined it would.
Getting great ideas onto the backlog is essential, but producing and delivering those items is critical if you are going to succeed in the product development space. Scrum ensures that you get those things done. Scrum ensures that you execute frequently and consistently.
So, it’s a balance between innovation and execution.
100 great ideas on the backlog doesn’t help your business move forward, but having one valuable item delivered to a customer, every month, absolutely does help your business move forward.
Scrum in the context of acquiring and retaining customers.
- Scrum will insist that you have a product backlog filled with items that create value for customers, but it doesn’t tell you what those items should be.
- Scrum will insist that you consistently deliver a working, valuable product to a customer, but it doesn’t tell you how to create those products or features.
- Scrum will highlight that you need solid, reliable, and valuable tools and processes to thrive in your product development team environment, but it won’t tell you what those are.
Scrum will make everything transparent in a way that shows you what might be lacking, what is working incredibly well, and what future interventions or investments will prove valuable, but it doesn’t fix the problems nor does it tell you what will succeed in the markets you serve.
So, it’s a great agile framework for the organization to employ, and it plays a significant role in developing a culture of innovation and excellence, but you can’t push a button and get all the answers you want.
You need to develop the team and organizational capabilities to achieve sustainable, reliable competitive advantage in the markets you serve.
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