Your project is constantly about make choices and trade-offs. The Agile way of working allows for a faster time-to-market and increased adaptability as you see opportunities in your specific market. With these organizational benefits, the demands on the responsiveness of the organization increases tremendously. Like driving a car, it takes similar skills to drive a regular car versus a race car, however the demands for a race car a much higher; the decisions the driver makes need to be faster and more accurate. In Agile organizations the same goes for the decision making. This session introduces Real Options and shows how it helps you in running both your projects and your life. Real Options is a decision-making process based on Financial Option Theory and Applied Psychology that can be used to manage risk. It focuses on WHEN to make decisions rather than HOW to make decisions. Timing of decision making is crucial in everything you do, however deferring commitments causes stress to many people. Real options helps you manage that stress by creating bounded uncertainty in an context of total uncertainty.

1. March 23, 2017
Making better decisions
with option theory
The ‘When’ rather than the ‘How’
Olav Maassen
VersionOne
olav.maassen@versionone.com
@OlavMaassen

2. Who is Olav Maassen?
• Account Manager at VersionOne
• Active with Agile since 2003
• Honorary Fellow at the Lean Systems
Society
• Co-author of award-winning graphic
business novel “Commitment”, awarded
“Most Valuable Agile Innovation 2013”
Contact
olav.maassen@versionone.com
m +31 6 26083506
Instant Messaging, Skype, Twitter
@olavmaassen

3. 3

4. When is something
a commitment?

5. Options
have
value
© luismi1985
Options
expire
© givepeasachance
Never
commit
early
unless
you
know
why© Tub Gurnard

6. Landmark Cone of Uncertainty
0.1
1
10
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00
AcutalTotalDuration/EstimatedTotal
Duration
Percent of Actual Duration
Estimation Error over Time

7. The Cone of Uncertainty
We expect uncertainty and manage for it through iterations,
anticipation, and adaptation.

8. 8

9. It’s
not
about
probability

10. It’s
about
survival

11. Staff Liquidity
11

12. Source: https://www.box.com/shared/mg9kq3d17e
Value of information
10 September 2013 12

13. Options
have
value
© luismi1985
Options
expire
© givepeasachance
Never
commit
early
unless
you
know
why© Tub Gurnard

14. Focus on when to
make a commitment!

15. Understand the difference between
commitment and decision
Do you need a
rope to climb
back up?

16. 16

17. Finding the
artist

19. 19

20. Rough Outline

21. First manuscript

25. 25

26. 26

27. Different covers
27

28. 28

31. School choice
31

32. © luismi1985
Options
expire
© givepeasachance
Never
commit
early
unless
you
know
why© Tub Gurnard
Options
have
value

33. 33

34. Key take aways
• See options around you
• Use options to postpone commitments
• Know when to commit and why
34

35. Questions are an option
35

36. Contact information
• Account Manager at VersionOne
• Active with Agile since 2003
• Honorary Fellow at the Lean Systems
Society
• Co-author of award-winning graphic
business novel “Commitment”, awarded
“Most Valuable Agile Innovation 2013”
Contact
olav.maassen@versionone.com
m +31 6 26083506
Instant Messaging, Skype, Twitter
@olavmaassen