Value Engineering is an outcome-based approach to product strategy and innovation portfolio management that favors learning via rapid experimentation, and using the information you gather to inform further product investment decisions.
Most companies have big planning cycles with slow feedback loops that hinder their ability to understand their product investments. These organizations are making large investments in product development but are waiting a long time – sometimes on the order of years – to understand whether the investment was a good bet.
They also insist on defining and measuring project success in terms of outputs, such as hitting budget, time and scope goals, rather than outcomes like improving customer satisfaction and increasing business profitability. The result? Work continues with low value, or mediocre ideas for long periods of time when this effort could be put directly into high value outcomes.
Value Engineering is an alternative approach developed by Barry O’Reilly, author of Unlearn and Lean Enterprise. In this article, co-author with AgileCraft he will teach you:
- The importance of shifting organizational mindset to think in bets and small experiments instead of static long term plans
- How to place a focus on outcomes rather than output
- The scientific steps of hypothesis-driven development
- How to avoid the “danger zone” where 60%–90% of ideas do not improve the product or metric they were intended to impact
- The best ways to get started with Value Engineering in your organization