• Nathan Kirchner

Polish the turd or make a new turd?!?

This phrasing is dramatic, but a very interesting thing seems to happen as we engineer along this continuum but we’ll get to that in a tick! This is an unspoken dichotomy (false dichotomy?) that I’ve faced many many times throughout my professional practice. The basic footprint of the situation goes as follows: I’ve come up with a solution / been tasked to solve something, I come in and meet with the extended stakeholder group, my ideas are great / terrible, I get a parade / dismissed, confusion reins & repeat!

After many such iterations I’ve managed to decode this disconnect, it is the shared cognitive dissonance where the two parties have inherently different unspoken tacit understandings of what is really needed here. Like most good engineering, once decoded it doesn’t seem all that opaque or difficult to see... but I remember getting there from the other side, hopefully it was just me that struggled but, at any rate, here are my brief cliff notes.

First up! The perhaps more ‘business appropriate’ terms for the above are Value Capture & Value Creation, but I stand by my very simple non business-buzzword turd analogy. Value Capture is all about polishing, Value Creation is all about making something new. Ok, left me dive a bit deeper into these two perspectives & then I’ll highlight the stalemate when different stakeholders come at the same problem from different one.

Value Capture - polish the turd - colouring inside the lines - The key questions

  • What risk/s are mitigated and/or reward/s maximised? - the goal here is to look solutions that clearly link to mitigating known risks and/or maximise already understood, quantified & measurable rewards.

  • What is the impact of catastrophic failure? - Value Capture focused stakeholders generally already have a job to do, they are looking at this problem/solution/opportunity through the lens of how it would help them to do more for less but the ability to continue their core objective undisturbed is paramount; so, what happens if this solution is a catastrophic failure? Ideally, nothing happens & solution failure is invisible (i.e. Zero Footprint).

  • What Value do we stand to Capture? - This one requires considerable empathy on the side of the solution designer / inventor. Beware the knee jerk partial view of ‘it saves $X per Y time & therefore delivery $Z savings and W time efficiently gain in value’. We need to zoom out and consider the bigger picture. What’s the cost to develop, implement & deliver the solution (A)?, what is the $Z savings and W time efficiently gain in value from the solution (B)?, what is the total value of the project / life time value of the solution (C)?, & what does all of this look like as a single number (C + B) - A ? If this number is considerably bigger than zero the solution looks interesting, if A is relatively low compared to the amount of money on the table then the solution looks viable to pursue. B gives the project team something to report on! Everyone wins!

  • What is the impact on the Cost of Failure / Cost of Reliability of the core product / service / activity of the stakeholders? - This one is generally hard to pin a number on, but subjective entire stakeholder accepted opinions are generally welcome. For instance, if the entire group agrees that this solution 'will reduce the likelihood of a failure occurring / increase the likelihood of a successful core being achieved' then this generally accepted. It is definitely worth pursuing this consensus to back the value of the solution in the eyes of the stakeholder group.

  • This is similar to Cost of Failure / Cost of Reliability, what is the impact of using the proposed solution on the stakeholders wider ability to deliver their core offering? Again, This one is generally hard to quantify, but if the entire group agrees on the potential then this generally accepted. It is again definitely worth pursuing this consensus to back the value of the solution in the eyes of the stakeholder group.

Ok, now Value Creation - make a new turd - colouring outside the lines - the key questions

  • What is the Business Activities / Business Goals / Market Alignment of the need for the 'a better way' / the proposed solution? Does it help the business achieve what it is doing? What it is aspiring towards? Is it what the market is demanding?

  • What is the Total Available Market (TAM) / Serviceable Available Market (SAM)? How many dollars are out there being spent around this need? How many of those are we likely to secure? For instance, there may be $1T spent on ICT (made that number up) TAM but we are only hoping / thinking / reasoning to get a 1% market share making the SAM 1% x $1T.

  • What is the Go To Market strategy? How are we actually going to try to get that SAM? How are we going to operationalise that objective & get actual solutions on the ground generating value?

  • And finally, How much is it going to cost to try & what how likely do we think we are to have a successful outcome? It costs money to try & I would tend to argue that if one is 100% sure of success in a Value Creation effort then they are probably embarking on a Value Capture effort & a wire is crossed somewhere. Value Creation implies uncertainty, ambiguity, risk but step-change!

The stalemate comes when various stakeholder sub-groups come from one of the different perspectives painted out above, or worse, come from a mix of the two! This is an issue as the questions, priorities, focus, goals, actions & thinking of one simply doesn't make sense when looked at through the lens of the other.

I often find that a heavily distracted project team that has 'a whole other thing to do' launches into efforts with a Value Capture mindset; simple, they are looking for a better way to do what it is that they are doing. Conversely, the creative solution makers seem to come in wide eyed, they do take somewhat of a beginner's mindset & do ask many 'obvious questions' but it seems that either the answers are interpreted in the Value Creation wider picture lens or that is simply how they are circulated back. Nevertheless, friction begins and the stakeholder sub-groups being to drift apart.

So yes, let's create, the bigger wider picture is great, let's change the world! Unfortunately, I've taken way to long to learn that Step 1 is answering 'What does it do for me?' (Value Capture), Step 2 is 'What does it do for the world?'.... there was a Step 3 but I can't quite remember it right now, but Step for is definitely 'Profit!'

(oh, the very interesting thing I promised to get back to at the start of this ramble - There is no practical need to keep an eye out for when we've hit diminishing returns in the Value Capture space if you embrace my dramatic stage naming. Engineering is a team sport, there is considerable push back when you call the output of everyone's efforts a turd after they themselves are satisfied with its polish & refinement. The time to move over into 'What is next?' mode (Value Creation) is pretty well signalled by the team!)

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