There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
—Sam Walton, Walmart founder
Get closer than ever to your customer.
Customers are the ultimate economic buyer of every solution. In a globally competitive world, Customers—whether internal or external—are increasingly demanding. They have choices. They want more value and they want it quickly. They expect solutions to work well and to solve their current needs. They also expect their solution providers to continuously improve the quality of their products and services.
Moreover, engaged Customers are integral to Lean-Agile Solution development. They are part of the Value Stream. They are inseparable from the process. They work frequently and closely with Solution and Product Management, and other key stakeholders, to shape the Solution Intent, Vision, and the Economic Framework in which development occurs. They have a strong influence in defining and prioritizing the solution’s development and are active participants in solution planning, demos, and process improvement.
Customers are an integral part of Lean-Agile development and play a critical role in SAFe. They are part of the Value Stream. Their support for Lean and Agile Principles and their active and continuous participation in the Solution definition, planning, demonstrations, and evolution are essential to successful execution.
In some cases, the Customer is internal (example: an IT shop delivering a supply chain application to the business). In others, the Customer is external and is the buyer of a custom-built offering by the system builder (example: government purchasing a commercial or defense system). In still others, the Customer is a more remote third party, one of a larger class of economic buyers. There, the system builder must understand the aggregate and synthesize requirements of the general case, craft solutions that fill the broader market needs, and provide an adequate internal proxy for much of development (example: an independent software vendor selling a suite of products).
Summary of Responsibilities
No matter the type, Customers must be engaged continuously throughout Agile solution development. They participate either in person or by proxy to fulfill the following general responsibilities:
- Participate as Business Owner in PI Planning
- Attend Solution and possibly System Demo; help evaluate the solution increment
- Participate in Inspect and Adapt workshops; assist in removing some systemic impediments
- Interact with analysts and subject matter experts during specification workshops
- Collaboratively manage scope, time, and other constraints with Product and Solution Management
- Help define the Roadmap, Milestones, and Releases
- Communicate the economic logic behind the solution and help validate assumptions in the Economic Framework
- Review technical and financial status of the solution
- Participate in beta testing, UAT, other forms of solution validation
The Customer Is Part of the Value Stream
The Lean-Agile Mindset spans beyond the development organization to encompass the entire value stream, which includes the Customer. The type of the value stream determines the context for interaction:
1) In the case of internal IT, the internal Customer is part of the operational value stream, as Figure 1 illustrates.
An example would be a marketing director who has responsibility for a partner enrollment work flow (the operational value stream). The partner is the ultimate end user of the work flow and is the Customer, but to the development team, the marketing director and those who operate the value stream are the Customer.
2) In the case of those who build solutions for an external end user, the Customer is the direct economic buyer of the solution, as Figure 2 illustrates.
In this case, the development value stream and the operational value stream are the same. The solution can be a final product that is sold or deployed directly, or it may need to be embedded into a broader Solution Context, such as a system of systems, to make it operational.
Customer Engagement Drives Agile Success
Lean-Agile development is dependent on a high degree of Customer engagement, much higher than our former stage-gated models assumed. However, the means of engagement are different, based on whether the solution builder is building a general solution—one that can be used by or sold to a significant number of Customers—or whether the solution is a custom built solution—one that is built specifically for an individual Customer to their specifications. Figure 3 illustrates the relative level of indirect or direct Customer engagement in each case.
On the left side, solution builders build systems that must address the needs of a larger audience. No one customer can be assumed to be an adequate proxy for the market as a whole. In this case, Product and Solution Management serves as the indirect Customer proxy, and they have the authority over solution content. It is their responsibility to facilitate external interaction and make sure that the voice of the Customer will be heard, and that the organization continuously validates new ideas. Scope, schedule, and budget for development are generally at the discretion of the solution builder.
Since it is unlikely that any particular Customer will be participating in regular planning and demo sessions, interaction is typically based on requirements workshops, focus groups, usability testing, innovation accounting, limited beta releases, etc. By applying user behavior analysis, measures, and business intelligence to validate the various hypotheses, the solution evolves based on this feedback. During PI planning, a group of internal and external stakeholders acts as the Business Owners, the ultimate internal Customer proxy within a specific value stream.
Custom Built Solutions
On the right side of Figure 3, the Customer is typically “in charge.” Such Customers define the solution and represent themselves. Product and Solution Management interact with the Customer and provide daily development support. However, even though the Customer is in charge, it is critical to establish a collaborative approach to scope and prioritization, both to foster incremental learning and to exhibit a willingness to adjust the course of action as facts dictate.
Active participation in PI planning, the Solution Demo, and selected specification workshops is required. This will often reveal inconsistencies in requirements and design assumptions, with potential contractual ramifications. This process should drive the Customer and solution builder toward a more collaborative and incremental approach.
Demonstrating results of the Program Increment to the Customer—in the form of a fully integrated solution increment—establishes a high degree of trust (“these teams can really deliver”) and also provides Customers with the opportunity to empirically validate the current course of action. Forecasting ability, based on the measured predictability and velocity of the Agile Release Trains, is significantly improved.
Transition toward an Agile contract model will also help reduce the win-lose aspects of traditional relationships between systems builder and Customer. One such model is the SAFe managed investment model, whereby the Customer commits the funding for a PI or two, then adjusts funding based on objective evidence and incremental deliveries. This requires a fair bit of trust going in, but thereafter trust is built incrementally, based on a continuous flow of value received.
 Ward, Allen and Durward Sobek. Lean Product and Process Development. Lean Enterprise Institute, 2014.
Last update: 31 March 2016