An Overview of Cost of Delay
with Jim Hayden

WRITTEN BY Dave Prior

This podcast is the first in a series we intend to do on Cost of Delay. This podcast features LeadingAgile Enterprise Transformation Consultant, Jim Hayden, and Dave Prior discussing the ideas behind Cost of Delay at a fairly high level. If you are new to the subject, or are struggling with understanding it, this may help provide clarity on what Cost of Delay is and how it works.

In a future podcast on this subject we will look at Cost of Delay from a more Reinertsen-centric viewpoint. We also plan to do at least one podcast that offers a case study on how Cost of Delay has been put into practice within an Agile organization. We will look at how they are using it to understand and prioritize work at the project, program and portfolio level.

Show Notes

00:09 Podcast Begins

1:12 Why (and how) we are talking about Cost of Delay

2:52 Some background on Jim Hayden

3:16 What is Cost of Delay

3:37 Example 1: Laptop Manufacturer with a set window of sales opportunity

4:22 Example 2: Selecting between two different projects based on time to develop and ROI

5:10 Is Cost of Delay vs. opportunity cost?

5:54 Understanding the impact of deferring a release

8:43 What if you delay your launch and a competitor beats you to the market and your customer

9:15 Example 3: Apple launching the iPhone 7 without the bluetooth headphones

10:15 Visualizing and understanding the Cost of Delay across multiple projects

12:08 Why understanding the Cost of Delay and decision making process is not solely about revenue

14:31 When new projects arise… determining where to prioritize them against existing work

15:57 The organization’s cost for doing the project

17:03 Additional factors to consider when understanding the value a project provides

18:00 Standardizing rules around how to prioritize work

18:59 Decomposing work to understand the value better

19:51 Defining “value” and Cost of Delay within your organization

21:57 Why it is so important for a Product Owner to have a method for prioritizing work that is understood by all stakeholders

23:04 When value is vague, Cost of Delay becomes more important

23:57 Example 4: Prioritizing 12 projects across an entire year

27:39 Adding a new project mid-year

29:10 How does sunk cost factor in?

30:37 Again with the logic!

31:29 We value starting things, not finishing things

33:27 Why we want to work in small batches

33:51 Where to find more information on Cost of Delay

34:26 Getting in touch with Jim Hayden

34:39 Closing

Links from the Podcast

An Introduction to Cost of Delay by Derek Huether
https://www.leadingagile.com/2015/06/an-introduction-to-cost-of-delay/

The Principles of Product Development Flow by Don Reinertsen
http://amzn.to/2m6u0xL

Black Swan Farming
http://blackswanfarming.com

Contacting Jim Hayden

You can reach Jim on the LeadingAgile site at
www.leadingagile.com/guides/jim-hayden/

Email: jim.hayden@leadingagile.com

Contacting Dave

You can reach Dave on the LeadingAgile site at
www.leadingagile.com/guides/dave-prior/

On Twitter at twitter.com/mrsungo

Or on his personal site at: drunkenpm.net

Feedback/Questions

If you have comments on the podcast, or have questions for the LeadingAgile coaches that you’d like to have addressed in a future episode of LeadingAgile’s SoundNotes, you can reach Dave at dave.prior@leadingagile.com

LeadingAgile CSM and CSPO Classes

For information on LeadingAgile’s upcoming public CSM and CSPO classes, please go to: www.leadingagile.com/our-gear/training/

Use the discount code: LA_Podcast to receive a 15% discount on the class.

leave a comment

Leave a comment

Your email address will not be published. Required fields are marked *

1 comment on “An Overview of Cost of Delay
with Jim Hayden”

  1. Yitz Schaffer

    Thanks for making this! I gave a meetup talk on lean alternatives to estimation last month which featured cost of delay, but my current understanding still boils down to guesses about potential value generation. I’m slowly working my way through the Reinertsen, and I’m looking forward to your upcoming podcasts.

    Reply