Sustainability, from the perspective of the Provider can often be overlooked when emphasising our level of customer-centricity.
For example, in the Startup world the CAC:LTV ratio, as shown above can often be balanced towards a loss-making scenario.
This is often done on purpose, as the Startup desperately tries to acquire market-share by offering unsustainable service offerings.
Whilst supported by deep venture capitalist pockets, this market-growth strategy is sustainable. But for how long?
This ratio may represent one reason, why large Enterprises find it difficult to compete with Startups. As a traditionally trained Director is unlikely to be motivated towards loss-making scenarios.
However, if new Product and Services do not acquire Customers quickly, they may not experience the exponential growth that Startups are famous for.
In this section, we’ll look at four potential measures for sustainability:
- Financial performance
- Resilience
- Organisation impact
- Environmental impact
Financial Performance
Can be measured by profit and loss (P&L), or justifiable costs for government and non-profits. Business Agility can provide three positive effects upon financial performance:
- Prioritisation of high-value deliverables based upon the customer’s perception of value
- Incremental and iterative delivery that reduces investment risk through faster customer validation
- Higher net present value by bringing forward future revenues
Example Targets
- Revenue
- Market Share
- Capital Costs (CAPEX)
- Operating Costs (OPEX)
- Profit Margin (Gross / Net)
- Current Ratio
- Customer Lifetime Value
- Customer Acquisition Cost
- Cash Flow
Resilience
Can be measured by turnover, compliance and continuity. It is important to strike a balance between resilience at the team and organisation level to avoid duplication and overly complex governance frameworks. Both of which can negatively impact agility.
Example Targets
- Continuity/Disaster Recovery
- Have a plan (compliant with regulation?)
- Has a defined owner (trained?)
- Test frequency (6/12 months?)
- Accuracy (does it work?)
- Resilience
- # of resilience experiments to conduct (monthly/annually?)
- Scope of the experiments (what can/cannot be experimented upon?)
- % of experiments with a completed retrospective (root cause, detection mechanism, resolution?)
Organisation Impact
Refers to the impact of the Product/Service within the wider organisation context, e.g. Does it fit/align within our:
- Geography / Region
- Portfolio / Product-line / Business Unit
- Organisation Culture
If a Product/Service does not ‘fit well’ within the organisation (but is successful), it can be considered: for sale, creation of a new Business Unit / Product-line, or even a new standalone entity.
Example Targets
- Product > Portfolio fit
- Re-use of assets / artefacts
- Employee Happiness Index
- Employee turnover rate
Environmental Impact
These measurements will vary depending upon the product and services being offered. For example, a tech-related product may measure the environmental impact through energy-accounting and carbon emissions. Whilst an agile training product may measure the use of sustainable paper and ink materials.
At the organisation-level, Agile Leaders may have specific targets mandated through government policy. Where this occurs the division of these targets across each product, and service can be expected.
Example Targets
- Reduced packaging
- Recycling targets (e.g. zero landfill waste)
- Waste reduction
- Energy use
- Energy source
- Scrap targets
- Sustainable consumables