I recently finished reading “Commitment” by Olav Maassen, Chris Matts, and Chris Geary. Presented as a graphic novel, it makes short work of a new way to look to look at managing risk in software development. It centers on the notion of a real option. A real option has value, will expire under some condition for example date or a set of triggers, and should not be committed to early unless you know why. In the world of classic project management, the prevailing mode of decision making operates in reverse of this notion. Plan everything out, commit to the plan even though you are the most uncertain about a project when you commence. As a consequence more time is spent in explaining variances to the plan and how to plan to correct for those variances. With apologies to Monty Python, that degrades into endless sessions of plan, plan, plan, plan, baked beans and plan. The real options in the room would scream, “I don’t like PLANS!”
With “Commitment” the authors ask you to look more to the outcomes desired and trace the many paths that could arrive at that outcome but only to commit to the decisions along that only when no better paths exist. The decisions in the book vary from features in a product, responding to changes in how a project is run and more. I’ll avoid spoiling fun of reading something that is quite deep, yet presented in an alarming simple and effective way. Think, a business novel but with less distraction of having to build out an entire story, in a context that is familiar to those in the project and software delivery world.
Through the examples given, the point is subtly made that real options are not an Agile specific notion nor limited to software. The examples show that the idea is applicable to many spheres. To toss another example on the pile, I thought I would extend the story I started in Flying Agile to show how real options thinking affected how I look at flying non-rev. Non-rev flyers are folks with a relative in the airline business, who are offered almost free seats but with no assigned seat. If there is space on the plane you fly. If not, you wait.
Now Boarding … The Optional Zone
As a project manager I found this style of flying unnerving. I was used to buying a ticket and expecting all the flights to fly on time so that I would arrive at my destination with certainty. Most folks still look at travel with that bias. When you look at the reality of the life of a road warrior, it is quite different. Changed flights, mechanical failures, weather events, overbookings, missed connections and list goes on. It’s a miracle we can commit to be anywhere. For the non-rev passenger the basic assurance of a committed seat is never in play. In order to survive this new experience I had to rewire my brain to look at travel through the lens of real options.
When planning a non-rev trip you sign up for prospective flights. You don’t commit until you make yourself known at the counter for a flight and take the boarding pass. Usually that is a few minutes before the door closes, about as late a commitment as you can make. The option to fly on a leg of a trip does not expire until the plans take off. You don’t give up before as tales are told of planes leaving the gate only to turn around to dump an unruly passenger. However, as your heart sinks at the sight of the available seats on the monitor drop to zero, other options leap forward as higher value Option B’s.
What determines the value of a flight options along the way? It comes down to remaining seats. An empty plane offers the greatest chance to make a leg. This in turn affects which days you try to travel on. Tuesdays seem to work well. The lure of first or business class offers additional valuable icing especially for international trips. Long waiting lists of fellow non-revers drops the value. If those non-revers have higher seniority then down the value goes from the threat of being bumped. You also look at the likely congestion of the hubs. New York airports commonly cancel and delay. Avoid obvious weather traps of snow in winter and thunderstorms in summer.
Real Options Air Travel
So how does it work? I’ll take an example. The entire family had made it to London and the only hassle (or change of flight due to the premature expiration of an option) was changing to a flight leaving for London from Atlanta rather than New York. The way home was not so straightforward. With real options you tend to start at the outcome and work your way backwards. Well, I wanted to get to work on Monday morning to run my Agile Scrum standup. To do that, I would need to fly back into Richmond, Virginia where my car was parked. To get to Richmond I would have to fly to a hub that connects to Richmond. To get to that that hub I would first have to fly across the Atlantic. That is how we usually think about a project. Pick the obvious path, throw all the eggs in that one basket and hope for the best.
Non-rev flying leads one to think outside that little box as the original plan is usually not what happens. “Commitment” also recommends you don’t go into analysis paralysis trying to juggle every option, just the important ones. With that in mind, you start to apply some constraints to weed out options. For me, splitting the family up to squeeze onto different flights was unpalatable until we were close to home. So not off the table but we limited ourselves to flights on days that has a good deal of empty seats. We also didn’t consider any other mode of transport across the Atlantic besides plane. Exploding Icelandic volcanoes notwithstanding, we wanted to fly and experience told us international flights are seldom full. Airlines also close bookings within 24 hours of departure so you know pretty well ahead of time if open seats are probable.
With those constraints in place, off we went. Sure enough the flight across the Atlantic was made on the first flight we picked and in business class no less. Arriving in the US in Atlanta the picture took a turn for the worst. All flights into Richmond were overbooked. The normal mode of thinking would have the weary traveler sit in the lounge and wait for the airline to fix it. The non-rever starts hunting for options. The first options to mine are the modes of travel. Planes, trains and automobiles. Well I wasn’t sure about trains from ATL to RIC so let’s consider renting a car. We could have sat around for a flight or two and then give up and a rent a car. Stringing that together we may be not be home for another 12hrs. Not much fun with kids.
How about other airports near Richmond? There are a couple within 1-1½ hr. drive. Ah, options increasing. Also from a relative standpoint, the overbooked flights direct to Richmond start to drop in value. The failure modes of air travel could also have kicked in even if a seat or two was available. So we picked Newport News airport. What about renting a car? Well we know there are piles of cars for rent and we don’t want to commit to one until we know we are going to arrive. The convenience of a short trip is worth the cost of a day’s rental and knowing they have to compete is good enough for now. We made it to Newport News so boom, another leg traveled.
Renting a car offers lots of options in terms of companies. How to decide? Price is probably a big deal but comfort for a short trip is not. By getting closer to home we can go small, that is cheap and squished. We got on Priceline and pick the cheapest. It was ready by the time we walk down to counter and we were off. London to Richmond for the cost of a car rental and flight taxes. I still had an afternoon to recover before the standup on Monday. Sorted!
Push the Envelope with Other Options
If I was not flying with children I could have done better. Did I really have to leave London that early? What about getting back for the start of the stand up? That is a personal preference but is it a requirement? What would I need to push back my return in order to have more time in London? First of all, if I have more personal time off banked I have the option to do so without HR pitching a tizzy. What about the team? If I am a good ScrumMaster I work to become invisible. That means anybody should be able to kick off a standup. So leading up to the trip I would want to have others take turns and maybe not turn up on a day or two to make sure the ceremony kicked off without his ScrumLordship about.
What could I do to increase the choices during the trip? I bailed on trains just because I didn’t know whether there was interstate service from the hubs to Richmond, which I do know has an Amtrak station. A little bit of research before I left about service from the most likely hubs would have served me well.
What else? If I was willing to push the return by a day I could have also used the extra day to stay in Atlanta while I waited for more favorable flights like a morning flight. That would have meant the option of touring Atlanta for a day would have opened up – the Coke Museum, CNN studio tours and nearby aquariums accessible by the metro that leaves from the terminal. And so the list goes on.
The Cruelty of Expiring Options
In the first part of this story I talked about a family of seven traveling non-rev and how their absence allowed us to travel. Real options that appear to be visible to one system, may not exist in the same way within other systems. For the Abu Party of 7, they believed they had the enough options to make it to Australia. With non-rev flying, having a big batch (aka family) moving through the travel system, I would value their options or relative chances a lot lower than they would. Hope, as they say, is not a strategy and I imagine it biases option valuation.
I hope they made it. However their expiring options became my emergent options with increasing value. My smaller system of three made good use of the misfortune of others. Such are the survival tactics of the non-rever, feeding off the carrion of chance. Picking the options off the bones of fellow traveler’s dreams. Anybody traveling standby is essentially achieving some outcome because someone else, be it the booking department of the airline or the average punter, failed in getting their desired outcome.
Try a Different View of Risk
“Commitment” gives other examples of options thinking related to learning from creating product backlogs through feature injection to staffing and staff liquidity (my favorite). Once you get the hang of it, it really starts to change the way you look at the decisions you make. Read the book then take something you are familiar with, which has a good deal of risk surrounding it. Have a go at mining for options.