Commercial Agile Framework
Innosee’s framework is designed to improve business outcomes by combining strategy and commercial viability* with the benefits of rapid test and learn
*Contains outputs customised for SaaS companies
CAF process flow
Being an organisation that rapidly builds and tests shouldn’t mean you are less strategic. To achieve success in the market, you need both.
CAF allows an organisation to move seamlessly from strategy to rapid iteration with small increments of value.
It is an adaptive framework that can be customised to suit your environment.
It also includes a commercial strategy for SaaS companies, allowing you to optimise revenue in the market.
The sections below the framework explain how powerful CAF is.
CAF high level process
The picture below shows the overall flow of CAF.
It incorporates many practices such as strategy shaping workshops, Lean portfolio management and results tracking events.
Framework guide
The guide for each stage describes the framework's workings in more detail. When you select CAF, training and additional implementation materials are made available.
How to achieve product-market fit
The many inputs into strategy followed by a decision making process
Bring clarify to your strategy and the results you expect
The specific item of work that will be developed and tested
Implementing CAF
If you are interested in deploying CAF or a custom target operating model, click the button to see the approach
Why a “commercial” framework?
This section will demonstrate why CAF is called a commercial framework. It contains viability analysis of features and additional pricing processes for SaaS companies.
Problems with build, measure and learn
What can possibly be wrong with the build, measure and learn process? This is a foundation of iterative development recommended by many working with Agile. The issue is that you end up building products and features that go nowhere. In particular with features, this means your product can end up bloated with ideas that don’t work well. This creates user dissatisfaction where a product has features continually added to it that aren’t very good or at worst useless. The effects can be even worse than that. As your sales team start to push features that sound good, new customers sign up with high expectations and end up churning to a competitor.
CAF approach
Next, we will compare how CAF works. Below the text is a simplified diagram of the flow described.
Problem definition
A Strategic Area begins with problem definition. If the strategy contains a customer-focused feature, this means it will begin with customer research. However, there is a potential trap here. It is not whether or not a customer has a problem; it is whether that overall problem is big enough to need solving. This allows the Strategic area to be stopped before anything is built.
Let’s use an example to show how problem definition allows you to stop early. You believe book writers have an issue with easily creating book cover designs. You go and study this and define a problem statement. The problem is indeed real, but having quantified it you realise that book covers are created less than once a year. They take 2 days on average to make. You decide the problem is not big enough to invest in.
Testing assumptions
In the MVI stage, we seek to identify and remove assumptions. You may test if you can build a new server configuration or check if your design is performant. Only after this assumptions testing should we move into the build, measure and learn cycle with a small change and gather customer feedback.
Commercial viability
Let’s use an example to show how why commercial viability is important. You decide to offer an improved service level of 24/7 covering weekends. You write up a problem statement showing the number of major issues on weekends. Next, you ask if your customers want this service and find that most are delighted. You spend the next two months recruiting and additionally offering evenings and weekend overtime. You are ready to go! With your new service, you approach your customers for an extra £100 a month. At this point, you discover no one is interested in paying.
Commercial viability is not the same as asking if someone “likes” something. You need to understand if they will pay for it. CAF includes techniques for testing this.
Problems with SaaS strategies
A temptation for SaaS companies is to focus on creating exciting features. These are then linked to a pricing model as an afterthought and often end up as part of the core product. Even with an agile “small change” approach this does not create value for the organisation.
SaaS commercial approach
A pricing strategy should be the focus of a SaaS company, it is the very foundation of value. The commercial strategy should achieve the following benefits:
Pricing tiers are competitive - defend market position
Increase usage that is chargeable - increase profit
Convince existing customers upgrade - increase profit
Convince new customers to join higher tiers - increase profit
The Strategic Direction stage contains with a SaaS commercial strategy output that allows you to achieve this.
Strategy versus iterative change
CAF allows organisations to be both strategic and iterative in the way they work. When deploying Agile methods, the temptation is to move fully away from upfront business cases and switch to deploying small changes rapidly. This presents its own set of problems:
Problems with strategic planning
Traditionally, organisations have focused on business strategy with longer-term planning. This was often at the expense of rapid testing and learning. Whilst the market was stable, this worked well. However, even in traditionally stable markets, new competition can emerge and start to eat market share. These large organisations were not set up to respond quickly and could be overtaken. There are many examples of very successful organisations that don’t exist now.
Problems with iterative change delivery
Moving to Agile-based methods, we see a rapid deployment of change. This adaptive culture allows for much faster releases of value. The “How will this make us money?” mentality is replaced with “How can we make customers happy?”. Organisations are now able to adapt quickly, however, the lack of strategy and commercial focus has meant many features and changes being built, although good, don’t lead to increased revenue. These organisations will be burning through money despite high customer satisfaction rates.
Copyright notice
CAF is covered by the Creative commons license - CC BY-NC-ND
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