An Overview of Cost of Delay with Jim Hayden
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.
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
Links from the Podcast
An Introduction to Cost of Delay by Derek Huether
The Principles of Product Development Flow by Don Reinertsen
Black Swan Farming
Contacting Jim Hayden
You can reach Jim on the LeadingAgile site at
You can reach Dave on the LeadingAgile site at
On Twitter at twitter.com/mrsungo
Or on his personal site at: drunkenpm.net
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 firstname.lastname@example.org
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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.