Concept 1 of 5

Evidence-Based Management

9 questions test this

Scrum says the Product Owner is accountable for maximising value and does not say how to measure it. That silence is deliberate, because the measures depend on the product. Evidence-Based Management is Scrum.org's answer to the gap, and it is separate material rather than part of the Scrum Guide.

Its central move is to stop asking one question about value and start asking four.

The four Key Value Areas

Current Value is what the product delivers today. Revenue per employee, customer satisfaction, employee satisfaction and how much of the product people actually use all sit here. It answers whether the product is delivering value now, and it says nothing about whether that will continue.

Unrealised Value is what could be delivered if every potential need were met. It is the gap between what a customer wants and what they currently experience, and it is the size of the opportunity still on the table. A product with high Current Value and low Unrealised Value is close to done. One with high Unrealised Value has somewhere to go.

Ability to Innovate is how effectively the organisation can deliver something new. Time spent on the product rather than on overhead, the weight of technical debt, the number of production incidents and the count of versions still in the field all reduce it. It answers whether the organisation could act on an opportunity if it found one.

Time-to-Market is how quickly the organisation can deliver and learn. Release frequency, cycle time, lead time, stabilisation periods and the time it takes to learn from a release sit here. It answers how fast the feedback loop turns.

Why two of them are not about value at all

Current Value and Unrealised Value describe the product. Ability to Innovate and Time-to-Market describe the organisation building it.

That split is the point. An organisation can know exactly where the opportunity is and be unable to reach it, because every release takes a quarter and most of the engineering effort goes on keeping old versions alive. Measuring only value hides that, and the resulting plan fails for reasons the measures never showed.

Reading the four together produces a diagnosis rather than a score. Strong Current Value with weak Ability to Innovate is a product living on past work. Large Unrealised Value with slow Time-to-Market is an opportunity somebody faster will take.

Goals turn strategy into experiments

Evidence-Based Management structures intent at three distances.

The Strategic Goal is the outcome the organisation is working towards, usually far enough away that the path to it is unknown. It is stated in terms of what changes for the people who receive the product.

The Intermediate Goal is a nearer objective that would demonstrate progress towards the strategic one, close enough to be assessed within months.

The Immediate Tactical Goal is the next step, small enough that a Scrum Team can pursue it now. The Product Goal in Scrum sits at this distance.

Each step is treated as a hypothesis. Form it, run it, measure what actually happened, and adapt the next step from the result. The structure exists so that a distant ambition produces a decision this Sprint, and so that the decision can be shown to be wrong.

What the measures are not

They are not targets. A measure adopted as a target is optimised directly, which usually destroys the thing it was standing in for. Release frequency chased for its own sake produces frequent releases of nothing.

They are not a fixed list either. Evidence-Based Management names the four areas and offers example measures, and the measures that fit a product are for the people building it to choose. What the framework asks is that the choice be made, published and used to decide something.

Common misconceptions

Evidence-Based Management is part of the Scrum Guide.

It is not. The Scrum Guide says the Product Owner is accountable for maximising value and deliberately does not say how to measure it. Evidence-Based Management is separate material published by Scrum.org, and it is assessed on the advanced Scrum.org exams.

The four Key Value Areas are a scorecard to be maximised.

They are lenses for finding the gap worth acting on. A product can be strong on Current Value and weak on Ability to Innovate, and the reading that matters is the imbalance rather than a total.

Velocity is an Evidence-Based Management measure.

Velocity measures how much work a team completes, which is output. None of the Key Value Areas contains it. Time-to-Market measures how quickly value reaches a customer, which is a different question.

9 questions test this concept

A colleague preparing for the assessment says the four Key Value Areas are defined in the Scrum Guide. How should this be corrected?

  • AThey appear in the Scrum Guide under the Product Owner accountability.
  • BThey are Scrum.org material published separately from the Scrum Guide, which deliberately does not say how value should be measured.
  • CThey replaced the Scrum Values in the 2020 revision of the Guide.
  • DThey are part of the Nexus framework rather than of Scrum.
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Related material
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Escaping the Build Trap, On the difference between shipping output and delivering value.
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Outcomes Over Output, On defining work by the behaviour change it produces.