Earn more by delivering earlier

Recently I’ve been thinking about choices in planning—what options do we have around how to structure the delivery of a piece of work, and which should we choose?

Often when we create a plan we have a problem that it doesn’t deliver what we want until much later than we’d like. Sometimes this isn’t even recognised as a problem, particularly by those who created the plan in the first place, and it’s someone else (often a manager of some kind) who says they’re not happy with it. The reaction of the people who created the plan is often of the form, “Well, you asked for a plan, and this is it.” They might think that this is the only plan, or that it’s the best plan.

But in every situation I’ve encountered there are some alternatives, and often one of those alternatives has a particular trade-off: we deliver something of less value earlier, but we deliver the whole thing later. The way I think of this is that it’s not taking the direct route to the finished product, but a slight diversion to a smaller milestone of some value, and then on to the complete solution. There is an earlier milestone of some value, but the route there adds time to the total journey.

Which to choose?

The vast majority of the time I advocate for the alternative—delivering an earlier milestone (of some value) at the cost of a longer overall project. And the explanation I find myself using more and more is about generating value earlier. This is an argument that comes from Don Reinertsen’s theory of cost of the delay. Get some value out early, I say, and then we continue to bank that, day after day, while we work on the next step in the background. Yes, the project takes longer, but the net value is greater because of the value we earn from what we delivered earlier.

This is part of the economic argument that Don Reinertsen makes when he talks about cost of delay. As I’ve said before, cost of delay overall is something I find too complicated for common use. But the economic argument of banking value early, and earning that continuously, is very clear.

Photo by marcokalmann

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