in this video i will take you through an example that you can use to show your executives how agile can help save money and provide greater return on investment when compared to traditional waterfall methods hey friends welcome back to the channel if you're new here my name is vibor i am an executive agile and leadership coach based in toronto canada and this video is the last in the ongoing series about agile for executives where i'm trying to demystify the psychology behind winning an executive's buy-in for agile the links to the first two videos are in
the description in case you want to check them out also as always everything i mentioned is linked as timestamps in the video description if you're watching this on youtube so feel free to skip around the video if you feel like it for now let's get started so in the last video we gave our executives a quick rundown on what agile is and how differs from the traditional waterfall with the help of a simple analogy at this stage executives understand the theory behind agile but businesses are not run on theory alone survival of any business depends
upon its ability to generate profits profits that the company makes on its products products that are made by the teams let's talk about one such team let's call them the chosen ones now before i go further know that i am deliberately trying to keep it simple and free of any jargon and would advise you to do the same while dealing with your executives all right back to our teams the chosen ones bill pat let's assume that our team consists of five brilliant developers lisa paul betty rajesh and samantha together they form the chosen ones now
the chosen ones are employed by the business to work on the product abc product abc has three main features that the team is required to deliver within 24 months as per the data available the three features will all become obsolete after 24 months so it's crucial that the team delivers these features sufficiently before 24 months for the business to be able to generate any profit now the estimated return on investment that these features will generate is 1.75 for feature a 54 feature b and 25 for feature c per month till the end of the 24th
month after which as said earlier the features will become obsolete due to various reasons okay it's now time to face the reality with these logistics in place let's calculate the total roi generated by the three features at the end of the 24 months first let's assume that the team used waterfall and delivered the three features all together as a big bank release in the 18th month we still have six months before the features go obsolete so the maximum roi that can be generated by the end of the 24th month is 1.900 again we are keeping
it as simple and easy to understand as possible let's have a look at what the roi looks like with an agile approach now in agile we prioritize our features based on the estimated value and then focus on creating the most valuable feature first in this case feature a is our most valuable feature and let's say it is also our mvp minimum viable product also our agile team the chosen ones got really excited when they learned that the business has empowered them to self-organize with this newfound energy and their combined focus on one feature let's say
they delivered feature a at the end of the first six months after the release feature a still has 18 months before it goes obsolete so the total roi generated by feature at the end of the 24th month is 1350 which if you notice is already greater than the total roi generated by the team with the waterfall approach now for simplicity's sake let's say feature b took another six months to be delivered providing an roi of 600 at the end of the 24th month and feature c again took six months generating an roi of 125. the
total roi generated by the three features and the end of the 24th month is 2075. beating the roi generated by the traditional delivery with a massive eleven hundred and seventy five now this already looks great but it's not over yet it's now time to amaze your executives in a vuca world nothing is certain for those who are not familiar with the term vuca stands for volatile uncertain complex and ambiguous we'll cover it in more detail in a future video let's say at the end of the 12th month a rival company released a product which made
feature c irrelevant before the projected 24 month mark now unlike waterfall where everything is released as a big bang all together agile enables businesses and teams to constantly inspect and adapt based on changing market conditions and other circumstances the team therefore has an opportunity to decide whether they want to work on feature c or should they pivot and focus on other high priority items providing businesses significant savings in terms of team and infrastructure costs agile therefore is not just a mere requirement it's a must-have tool needed by the businesses to survive in this complex ambiguous
and uncertain environment okay it's now time to end the presentation and you can do that by saying with the promise to quickly and continuously ship current and valuable features i offer you a greater return on investment with every release provided we start considering agile as a product delivery approach for new and possibly existing products with this i rest my case for agel so there you have it with this series i wanted to bring your attention to this important but often ignored fact that being an agent coach is a lot more about selling your idea and
understanding about agile than teaching people about various frameworks of course knowledge about framework is required and important but it is usually not the first step i hope you now have a better understanding about how to approach executives when it comes to gaining their buy-ins for agile adoption and transformation if you like this video then please do not forget to give it a thumbs up also please do not forget to provide your valuable feedback in the comments i'll see you in the next video
