Book Review: The Art of Business Value

Mark Schwartz’s The Art of Business Value (itrevolution, audio) doesn’t feel as similar to other DevOps books because it focus’ is on a different aspect, the CIO/MBA analysis of Business Value. It’s a shorter book than others, but that’s mostly because it takes a hard look at mathematical analysis of value propositions. And, he also has a way of bringing together ideas from multiple sources that is compact and directly associates there values for comparison.

Because the book is focused on the definition of Business Value, it needs to discuss the history of prior works which define and guide thought leadership on that topic. He goes into details on ROI, NVB, PV and others. Giving examples of how they can be applied, and in what situations they can be misleading. It can feel a bit like when The Machine That Changed the World’s started describing the equations that could put dollar values to every step and aspect in the supply chain. This is important to do, and difficult without having seen it done before. But, ultimately, his point is that the prior works don’t quiet fit right because of lost opportunity costs. And, that he hopes the work being done on new models, like Beyond Budgeting, can help teams/companies figure out the model that works for them. (There is no one size fits all approach.)

The part of the book that stuck with me was “Learning Bureaucracy vs Authoritative Bureaucracy”. Bureaucracy isn’t a bad thing, it can just go bad really fast. You have to have a balancing act between the stability and efficiencies that Bureaucracy provides and creativity and improvements that Generative cultures provide. When bureaucracy’s define standards and best practices they remove some of the chaos, but it soo easy to over-step just a little bit and create unnecessary slow downs (in the forms of approvals, reviews, audits, testing overhead) which don’t provide Business Value at the cost that they come for.

(picture from Scaling Agile @ Spotify with Henrik Kniberg)

In the end, Mark Schwartz does give some prescriptions of what could be used to help improve the understanding of business value. And, I interpret that advice as creating a Learning Culture and building knowledgeable team members (he has a lot more detail). There seems to be an overarching theme of moving away from a single person that defines what Business Value is and into a team of people that can define and test for Business Value; he even mentions Eric Reis’ Lean Startup as describing a starting model. These are some of the ways to help connect the implementers understanding of what creates business value with managements understanding. Which he notes is one of the areas that Lean Management and Agile are lacking in detail; how does management best perform it’s role in leadership and guidance and connect that vertical information flow into the horizontal business process flows?

(PS. Also check out Henrik Kniberg’s notes on Trust. In my opinion, Trust is the most important factor in creating efficiencies. And Trust vs Security is the classic debate that just does not seem to have a good solution.)