The document discusses real options decision making, which involves identifying options and their associated conditions, putting the options and conditions on a timeline, identifying decision deadlines, waiting to make decisions until necessary conditions are met, refining options over time, finding new options, and pushing decisions back to gain more information. It provides examples of using real options approaches for vehicle design, engine type selection, and dimensional planning for road construction projects. The key benefits highlighted are keeping more options open longer, actively gathering information, and only committing to decisions when needed based on met conditions.

1. Real Options Jürgen De Smet & Yves Hanoulle

2. What do you know about Real options? Nothing A LOT Little bit 2

3. What do you want to learn? 3 3

4. Up-front decisions Up-Front Decisions 4

5. You don’t need to decide right now! 5

6. Only decide when to decide 6

7. Keep as many options open as possible 7

8. Actively gather information until you have to decide 8

9. You only commit when you must 9

10. when you have a good reason to 10

11. Why do you want to do that? 11

12. Later you are smarter 12

13. you can deal with risks 13

14. a real option has a value 14

15. a real option has experiation criteria 15

16. a real option has a cost 16

17. Common sense? 17

18. Common sense for teams 18

19. Real options decision making – Identify Options A B Options C 19

20. Real options decision making – Identify Conditions A X or Y B conditions X and Y C Z 20

21. Real options decision making – put on timeline A X or Y B X and Y C Z 21

22. Real options decision making – Identify deadline A X or Y B X and Y C Z 22

23. Real options decision making – Time to decide A X or Y B X and Y C Z first decision point 23

24. Real options decision making – wait for first condition A ? X or Y B X and Y C Z 24

25. Real options decision making – Refine options A2 X or Y B X and Y C Z 25

26. Real options decision making – Find new options A2 X or Y B X and Y C Z D Y 26

27. Real options decision making – Push back decision A2 X or Y B X and Y C C Z‘ Z D Y 27

28. Real options decision making – Plan D? A2 X or Y B X and Y C Z‘ D Y 28

29. This is great 29

30. Set based design 30

31. Vehicle designs 20 entered in a competition 5 worked out in detail 4 claymodels made 2 prototypes made and revised 1 model chosen Design options 31 31

32. 80 types considered narrowed down to 10 by testing 4 types after more extensive testing 1 selectedafterevalutation by computer simulations Type of engines 32

33. agile user stories 33

34. Test Driven Development 34

35. Dimensional planning – Dirt road 35

36. Dimensional planning – Cobblestone road 36

37. Dimensional planning – Highway 37

38. Why is dimensional planning valuable? Amsterdam highway Heusden 38

39. Why is dimensional planning valuable? Heusden (Netherlands) Amsterdam highway Who is paying for this expensive mistake? Heusden (Belgium) Lets create a tighter contract so the customer does! 39

40. Why is dimensional planning valuable? Heusden (Netherlands) Amsterdam Heusden (Belgium) 40

41. Why is dimensional planning valuable? Heusden (Netherlands) Amsterdam Heusden (Belgium) 41

42. Why is dimensional planning valuable? highway Heusden (Netherlands) Amsterdam Heusden (Belgium) 42

43. Why is dimensional planning valuable? Dimensional Planning vs Cost? Amsterdam – Heusden Belgium : Dirt Road Amsterdam – Heusden Netherlands: Dirt Road Amsterdam – Heusden Netherlands: Cobblestone VS Amsterdam – Heusden Belgium Highway + Amsterdam – Heusden Netherlands ???? 43

44. Why is dimensional planning valuable? 44

45. Story Mapping 45

46. Real options vs Change requests 46

47. Generate as much options as possible Identify the conditions and expiration timing Decide when to decide Actively go for more info Go for multiple options if needed Wait as long as possible Decide fast Get Real 47

48. Look back at your questions... 48 48

49. http://www.agilecoach.net/html/Real%20Options%20handout.pdf The Toyota Way-Jeffrey Liker, pp 239-240: http://www.amazon.com/The-Toyota-Way-ebook/dp/B000SEGIVS Koen van Exem: http://www.inxin.com/wiki/DimensionalPlanning Software by Numbers: http://www.amazon.com/Software-Numbers-Low-Risk-High-Return-Development/dp/0131407287/ http://leanprocrastination.com/blog/2011/09/a-backlog-is-waste-fill-it-later/ Resources Jürgen De Smet & Yves Hanoulle 49