Cost of Delay is a way of sharing and understanding the impact of time against forecasted outcomes. It provides the means to calculate and compare the cost of not completing something now, by choosing to do it later.
I was recently watching an episode of Shark Tank. I loved the unfiltered statement from Kevin O’Leary (Mr. Wonderful) toward an entrepreneur seeking an investor in his company.
If you’re a fan of Shark Tank, you’ll notice something about Mr. Wonderful. He keeps the conversation focused on the money. When will he get his money back? How many multiples of his investment should he expect to get back? Other investors (and many of our stakeholders) don’t focus enough on the money. Particularly, what is the cost of delaying the implementation of one feature over another.
Sounds kind of weird, right? Aren’t we always telling people to prioritize their backlogs by customer value? When you ask customers, or the business, which features are the highest priority; all too often they say all of them. (Jim Hayden makes reference to this in a recent podcast,when teams don’t prioritize or limit their work in process. People are really good at starting things but not necessarily finishing them.) Don’t just ask what is the most valuable. Ask the question, “what will cost us the most, by delaying its delivery?”