Download - Olav Maassen: RISK AND DECISION: THE ‘WHEN’ RATHER THAN THE ‘HOW’ - LKCE13

#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'



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'



Blue'opSon'???'

Dec'Nov'

Stock'shops'

Oct'

Produce'DVD+box'

Servers'

August'March'

We'are'here!'

Design'and'test'(2M)'


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”



Blue'opSon'???'

Dec'Nov'

Stock'shops'

Oct'

Produce'DVD+box'

Servers'

August'March'

We'are'here!'





Blue'opSon'???'

Dec'Nov'

Stock'shops'

Oct'

Produce'DVD+box'

Servers'

Sept'March'

We'are'here!'



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'