#LKCE13 #realoptions November 5, 2013
Risks and Decisions The ‘When’ rather than the ‘How’
Olav Maassen Xebia
[email protected] @OlavMaassen
Chris Matts Emergent Behavior
[email protected] @PapaChrisMatts
“LUPUS”' “HEP'E”'
“LUPUS”'IV'CYTOXIN'
PLASMA'PHERYSIS'
“HEP'E”'NO'TREATMENT'
SOLUMENDROL'
!'
Get'Worse'
No'Impact'
Toast'
Get'beBer'Or''
Get'Worse'
Hurt'him'Just'right'
Options have value
©'luismi1985'
Options expire
©'givepeasachance'
Never commit
early unless
you know why
©'Tub'Gurnard'
Agenda
Real Options: understand the difference between an option and a commitment • Options and commitments • Reversibility of decisions • Applying Real Options in writing a book • Real world examples
5'
40 Minutes
6'
When is something a commitment?
When is something optional?
©'MacUK'
Do you have a choice?
9'
OpSon'
Commitment'
• This talk • Could we walk of the stage? • Hotel this morning (what’s the consequence of not
showing up: Nils panic, never invited again, reputation shot)
• Is the hotel a commitment • Is the flight a commitment • What about five minutes after it has taken of? • Nils asked us: commitment or option? • What about the actual event • If the event got cancelled would we still go? • Lady gaga concert?
11'
12'
13'
14'
15'
16'
17'
18'
19'
20'
Options have value
©'luismi1985'
Options expire
©'givepeasachance'
Never commit
early unless
you know why
©'Tub'Gurnard'
1. Right'2. Wrong'3. Uncertainty'
©'Bethany'L'King'
©'Violator3'
• When do supermarkets open a new till / register -> conditional
• Published and the customers start to manage it
23'
30 Minutes
24'
A'Month'
A'Day'
hBp://www.flickr.com/photos/embreyart/4229109725/sizes/m/in/photostream/'
An'Hour'
A'Minute'
35'
If the time it takes to recover, is greater than the time you can survive, you die.
Which means you need more options.
36'
A'Month'
A'Day'
hBp://www.flickr.com/photos/embreyart/4229109725/sizes/m/in/photostream/'
An'Hour'
A'Minute'
A'Second'
ROLL$BACK!$
If the time it takes to recover, is greater than the time you can survive, you die.
Which means you need more options. Monitor the conditions
48'
Its'not''about'
probability'
It’s'about'survival'
20 Minutes
51'
Options have value
©'luismi1985'
Options expire
©'givepeasachance'
Never commit
early unless
you know why
©'Tub'Gurnard'
Eat own dog food
53'
54'
Finding the artist
57'
Rough Outline
First manuscript
Artwork
65'
66'
Different covers
67'
68'
10 Minutes
69'
70'
71'
72'
73'
74'
75'
76'
77'
78'
Staff Liquidity
79'
80'
Analysis' Design' Code' Test' Prod'
Analysis' Design' Code' Test' Prod'
Analysis' Design' Code' Test' Prod'
85'
86'
87'
88'
School choice
92'
©'luismi1985'
Options expire
©'givepeasachance'
Never commit
early unless
you know why
©'Tub'Gurnard'
Options have value
When do we have to decide?
Yellow'+'Blue'opSon'???'
Blue'opSon'???'
Dec'Nov'
Stock'shops'
Oct'
Produce'DVD+box'
Servers'
????'March'
We'are'here!'
©'Pascal'Van'Cauwenberghe'
When do we have to decide?
Yellow'+'Blue'opSon'???'
Blue'opSon'???'
Dec'Nov'
Stock'shops'
Oct'
Produce'DVD+box'
Servers'
August'March'
We'are'here!'
Design'and'test'(2M)'
©'Pascal'Van'Cauwenberghe'
How will we decide?
• IF the new blue design is completely stable • AND if the estimate of the blue design < 2
months • THEN we use the blue design • ELSE we use the yellow design AND we’ll
plan the blue redesign once the blue design is stable
• Meeting: August 1st
Meanwhile...
• We develop the site in “black & white”
• One team member participates in the followup meetings of the new design (2 hours every 2 weeks) and keeps the team informed of the situation
The day is not done yet
• A few more questions: • Developers, what changes when the design
changes? • Developers show architecture and code
• What if there was less to change? • Quick architectural “spike”: remove duplication,
separate concerns... • How much to refactor the site? • “We can do it in a few days” • “Afterwards, any redesign costs less than 1 month”
When do we have to decide?
Yellow'+'Blue'opSon'???'
Blue'opSon'???'
Dec'Nov'
Stock'shops'
Oct'
Produce'DVD+box'
Servers'
August'March'
We'are'here!'
Design'and'test'(2M)'
©'Pascal'Van'Cauwenberghe'
When do we have to decide?
Yellow'+'Blue'opSon'???'
Blue'opSon'???'
Dec'Nov'
Stock'shops'
Oct'
Produce'DVD+box'
Servers'
Sept'March'
We'are'here!'
Design'and'test'(1M)'
©'Pascal'Van'Cauwenberghe'
Focus on when to make a commitment!
Understand'the'difference'between'commitment'and'decision'
''Do'you'need'a'rope'to'climb'back'up?''
Key take aways
• Be aware of options and commitments
• For the conference: – How does this create options for me? – How does this allow me to push conditions to
a later date in order to gather more info?
103'
Questions are an option
104'
http://commitment-thebook.com
105'
Contact'info:'[email protected]'twiBer.com/olavmaassen'
Contact'info:'Chris$Ma4s$(Emergent$Behaviour)[email protected]'twiBer.com/papachrismaBs'
Conflict...
we'hide''
intent'and'
informaSon'©'Theqspeaks'
Collaboration...
we'signal''
intent'and'
informaSon'©'Krypto'
Options have value
108'©'Tracy'O'
Options expire
109'
Never commit
early unless you know
why
110'©'*L*u*z*A'