Business Value

This central idea—concentration of force, brilliantly directed into the best opportunities to achieved outsized results—correlates directly with superior strategic outcomes.

-Jim Collins, BE 2.0

Definition: Business value is a contextual, multi-dimensional concept that reflects what is most important to an organization. Business value guides decision-making across all levels, from strategy to execution, ensuring alignment with the organization’s goals and maximizing its unique strengths.

What is the role of business value?

Understanding business value begins with the organization’s purpose—its fundamental reason for existence. Understanding this purpose sets the direction, but it alone doesn’t provide the complete roadmap for action to realize the value.

A well-defined strategy is essential to bridge the gap from purpose to action. But strategy goes beyond setting goals or targets. It is a comprehensive framework for leveraging the organization’s unique strengths to maximize value. These leverage points—whether proprietary technology, market position, talent, or intellectual property—represent the organization’s key advantages, those which competitors struggle to replicate.

With a clear strategy, the next step is to translate it into initiatives, solutions, and features that realize the potential business value. At this stage, continuous trade-offs are necessary. Which initiatives deliver the highest return? What technologies best support this? What designs ensure the final product maximizes business value? All these decisions are interconnected, with business value as the thread that connects them and informs the right action to take. For long-term success, integrating business value into everyday decision-making is critical.

However, in many organizations, the focus on business value is often lost. Teams may get consumed by day-to-day tasks, focusing on processes, technology, or individual KPIs without fully aligning their efforts to the broader value goals. This disconnect can lead to misalignment, wasted efforts, and underperforming initiatives.

A prevailing mindset in many organizations is that ‘business value’ is the responsibility of senior leadership, tied to setting strategic goals. In reality, decentralized decision-making is essential for organizations to be Agile and unlock their teams’ creative potential. To enable this, a clear and contextual understanding of business value at all levels is necessary to guide these decisions.

Specific expressions of business value—like success criteria for epics, business benefits for features, and business value scores for PI objectives—are found throughout SAFe. However, these expressions are often not rooted in a deep understanding of what is valuable for business. This understanding is only gained through a disciplined approach to business value discovery.

How to perform business value discovery

At the core of every successful organization lies the ability to answer a crucial question: “What is the most valuable thing to focus on?” While the question may seem simple, arriving at an answer requires a disciplined, structured approach to business value discovery across all levels of the organization.

Business value is not a one-size-fits-all concept; it is deeply contextual. What is valuable for one organization may hold little importance for another. Even within the same organization, portfolio, Agile Release Trains (ARTs), or teams can have vastly different interpretations of what is valuable in the context of their work.

This is why business value discovery, Figure 2, is an essential activity at every level of the organization.

Each step is now further explored in the rest of this article. Once a greater understanding of what is valuable has been achieved, it immediately helps create alignment, informs decision-making and prioritization, and improves the ability to express this value through features, epics, strategic themes, and other outlets.

Step 1: Identify and describe what is valuable

Business value is not merely a number or a single metric—it has a structure that can be understood by examining the outcomes and their magnitude (which reflects how much each outcome is valued). This approach provides a clear foundation for identifying what’s valuable in a given context, helping to direct focus where it will have the most significant impact.

Identifying business value happens throughout SAFe events and activities at all levels of the organization. At the portfolio level, portfolio stakeholders and epic owners initiate these discussions through the portfolio Kanban, often starting even earlier during the refinement of portfolio strategy.

At the ART level, business value identification unfolds as teams assess solutions, explore usage scenarios, and apply customer-focused techniques. It sharpens through ART backlog refinement and gains clarity during PI Planning, where teams align on priorities. During PI execution, System Demos provide checkpoints to validate value, while the Inspect & Adapt (I&A) event allows teams to reflect on how effectively value has been delivered.

For example, when developing a mobile version of a company’s legacy web application, the initial analysis might identify the following key outcomes: ‘increased user engagement,’ ‘improved customer satisfaction,’ and ‘higher conversion rates.’ After some analysis, stakeholders may conclude that ‘improved customer satisfaction’ contributes the most business value, followed by ‘increased user engagement.’

The relative magnitude of these outcomes can be expressed differently depending on the context of the discovery activities. The point is not how it is described but how each outcome’s different contributions are understood and made visible.

The following steps in this discovery process will further refine these expressions of business value, including defining numerical targets. However, it’s important to note that the magnitude of how much each outcome contributes to the overall business value should not be confused with the metrics used to measure the achievement of those outcomes.

Step 2: Explore the dimensions of business value

To effectively explore and understand business value more deeply, it’s crucial to move beyond these expressions of business value and focus on how this value will be realized. For each of the business value outcomes identified in the previous step, the next consideration is determining where they lie along several critical dimensions:

• Hard benefit (tangible) <–> Soft benefit (intangible)
  Is the business value measurable in direct financial terms, or is it more intangible, like brand strength or employee morale?
• External (customer-facing) <–> Internal (operations-facing)
  Is the value generated for customers and revenue growth, or is it about internal improvements such as efficiency and cost savings?
• Reactive (addressing current challenges) <–> Proactive (building the future)
  Are you solving an immediate problem or laying the groundwork for future opportunities and innovation?
• Scalable (inherently expands) <–> Non-scalable (fixed, one-time impact)
  Does the value expand over time and across markets, or is it a one-time gain with a fixed scope?
• Realized (demonstrated in practice) <–> Potential (hypothetical, forecasted, involves unknowns)
  Is the value already validated and generating impact, or is it forecasted and yet to be proven, involving some level of risk and uncertainty?

These dimensions form a simple, actionable, and powerful tool that helps refine understanding of business value at all levels. Custom dimensions that align with the unique needs of a particular organization or unit are likely to emerge.

In our example, applying these dimensions to the ‘improve customer satisfaction’ outcome leads to the following analysis:

In this example, this additional analysis leads the team to set more concrete goals and identify new, significant backlog items for the ART. They realize that they are primarily dealing with soft benefits. They also acknowledge that much of the value they are pursuing is potential, not yet realized, and somewhat hypothetical. As a result, they cautiously allocate additional time for product telemetry. Moreover, they recognize the need for scalability—anticipating potential future capabilities—and decide to streamline the creation of proper APIs to support future growth.

As this example illustrates, the result of business value discovery is not a simple ‘formula.’ Instead, it is a more nuanced understanding of what is valuable (based on our current knowledge), leading to new questions, identifying missing activities, and a path toward learning more to proceed effectively. The next step in the process helps identify the areas requiring further exploration.

Step 3: Uncover unknowns in the current understanding of business value

Lean and Agile development practices foster more frequent value delivery, which can help improve our understanding of what is valuable. However, they do not establish a complete process for managing unknowns related to business value. This is a critical task that requires a deliberate and thoughtful approach.

A general guideline is that every statement about business value is simply a hypothesis unless there is concrete evidence to support it. This underscores the importance of building an effective feedback system.

To navigate the unknowns associated with business value and make them fully transparent, the following categorization can be helpful:

• Market Unknowns (Demand, customer preferences, competition)
  Techniques that help: Pilot programs, customer feedback loops, market research, A/B testing.
• Customer Behavior Unknowns (Usage patterns, achieving customer goals)
  Techniques that help: Personas, UX testing, behavior analytics.
• Technical Unknowns (Feasibility, cost, implementation approach, use of technologies)
  Techniques that help: Proof of concept, technical prototyping, incremental development.
• Operational Unknowns (Internal processes, allocation of human capital, execution capabilities)
  Techniques that help: Capacity planning, process modeling and planning, structuring for value, and skillset management.
• Regulatory Unknowns (Compliance, standards, legal changes, impact on the business)
  Techniques that help: Scenario planning, compliance audits, early risk assessments.

Open-ended analysis and feedback mechanisms are also crucial for navigating the unknowns that cannot be easily identified or handled proactively—commonly called “unknowns.” These are often the least anticipated factors but can have the most significant impact. Innovative organizations equip themselves with the tools and processes to handle these emergent realities, ensuring they are prepared for whatever challenges arise.

Unknowns also have a positive side: they often bring about new, emerging opportunities that could not have been anticipated. It is critical to always “leave room” for these possibilities by keeping plans, business goals, and technical architectures flexible enough to seize such opportunities in a timely manner. The impact of the unanticipated is often immense, and minimizing the negative aspects while maximizing the positive can make a world of difference for a company that does not let the illusion of certainty cloud its path to a brighter future.

Step 4: Determine how business value will be measured

Whether represented through smaller deliverables like features or more significant initiatives such as Strategic Themes, business value must always be expressed in measurable terms. Measuring business value relies heavily on empirical evidence rather than mere expectations or beliefs. Since our understanding of business value is rooted in outcomes, those same outcomes serve as the foundation for measurement. This means a deliberate approach must be taken to gathering data, using quantitative and qualitative metrics to substantiate whether the intended outcomes are being realized.

Understanding how business value will be measured is integral to the discovery process. It ensures that the agreed approach aligns with our understanding of what we have determined to be valuable.

A common pitfall when measuring business value is the tendency to substitute outputs for outcomes. Outcomes, generally more complex to measure, are often neglected in favor of more immediate and readily available metrics. This leads to the implementation of proxy measures like “work completed” or “product delivered,” which are poor substitutes for the actual outcome, such as “product achieved user goals.”

Relying on outputs instead of outcomes has serious consequences. It typically means the organization lacks the proper infrastructure to collect the necessary empirical evidence to answer critical questions with certainty. Decisions end up being based on incomplete or inadequate data. When the measurement system doesn’t capture whether the product is fulfilling user needs or achieving business goals, the organization risks making misguided decisions, leading to inefficiencies and missed opportunities for value creation.

To prevent these issues, it’s essential to establish the infrastructure and methods necessary for capturing empirical data about outcomes. This may involve new systems, processes, or tools that allow teams to track the real-world impact of their work. Only through a disciplined focus on outcomes and their associated metrics can an organization ensure it delivers business value, rather than just completing tasks.

How to embed business value into decision-making

To maximize the impact of any effort, organizations need to make a fundamental shift: embedding business value into the core of all their conversations. At every level of the organization—whether discussing a new business feature, an operational improvement, or a technical refactoring—teams need to be clear about the outcomes their work aims to achieve and the reasons behind it. Outcomes provide the tangible link between effort and value, clarifying why something is being done and its expected impact. Some outcomes may be directly tied to business benefits like revenue, while others may create value less directly, such as improving system architecture or operational efficiency. In either case, the outcome must be well understood.

This shift starts with structured events like PI Planning, System Demos, and Inspect and Adapt (I&A) events. In these moments, conversations must explicitly focus on business value—what it is, how it will be realized, and how to measure its success. During PI Planning, for example, every feature and initiative should be evaluated on its technical feasibility and the value it is expected to bring. System Demos should highlight the value delivered, and I&A sessions should reflect on whether the outcomes matched the intended business value.

SAFe triggers these conversations by highlighting business value in approaches to prioritization, such as Weighted Shortest Job First, and in assigning business value to PI objectives as part of the planning process. Furthermore, expressions of business value are captured inside work items at each level of the Framework. A deeper understanding of business value only helps to amplify the benefits of these existing processes.

However, formal events are not enough. Organizations also need to embed value-driven thinking into the every day, ad hoc interactions where much of the actual decision-making happens. A powerful tool in this communication is focusing on outcomes. In these moments, leaders, teams, and stakeholders should regularly ask questions like:

• What outcome does this work pursue?
• Is there an easier way to achieve this outcome?
• Which option brings more value?
• How do we ensure that this outcome gets achieved?
• How can we get early evidence that the value is there?
• What did we achieve/not achieve in terms of outcomes?

In SAFe, alignment is critical. However, given the complexity of work across an enterprise, alignment cannot happen by focusing on ‘what to do’ alone. Instead, the organization must align on ‘what’s valuable.’ This alignment on business value empowers different parts of the organization to make rational, independent decisions in support of a fast flow of the most valuable work. By consistently communicating outcomes and embedding value into every conversation, organizations can ensure they are moving in the right direction, delivering what matters most, and achieving their full potential.

This makes it crucial for organizations to establish a robust business-value-oriented culture that prioritizes empirical evidence and systematic, frequent feedback. At the heart of this culture must be the commitment to making business value the foundation of all decision-making.

Leaders must set an example by transparently aligning their decisions with business value to foster trust and accountability. They must also acknowledge the limits of rational knowledge, mainly when dealing with unknowns, and proactively seek ways to uncover and address them. Furthermore, leaders should recognize and seize opportunities that could reveal greater business value, demonstrating adaptability and openness to new insights.

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References

[1] Collins, Jim. BE 2.0. Portfolio/Penguin, 2020.