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Value Creation: Solution or Problem Impact?

The main skill of a Product Manager is in their ability to identify products/features that would create value. This is unlike Business Analysis, where the measure of success is based on the beneficial and seamless synchronization of Business and IT; the relationship between business and IT doesn't have to create value, but it MUST be beneficial.

Are you Confused about the difference between Valuable and Beneficial?

Gold is valuable, but Water is beneficial. A product must be as valuable as gold to its target audience for premium success, however, a just has to be as beneficial to a company as water is to, humans. This means that when a PM looks at a product's feasibility, they are measuring its "gold" complex to its users, while a BA would measure its "water" complex to the business.

As BAs in this new agile world, you are likely to work with Product Managers, therefore, understanding what Product Managers care more about in a product (Value and Customers) will help BAs to build a good relationship with them. This is important because that value/benefit conundrum causes differing opinions and perspectives between BAs and PMs. Now, I am not saying that a product should not be valuable to a business, I am saying that provided it is beneficial and meets the business objectives, then the PM can carry on. If a product can be both valuable and beneficial to a business, then there's no argument.

As a BA, after assessing that a proposed product is beneficial to a business, you could help the Product Manager to test how valuable their product is to the customers. The reason that I feel a BA can do this, is because BAs are better trained in Communication/Stakeholder Management, Elicitation and countless BA techniques. This article would explain some secrets about Value-creation.

How do you measure the Value of a Product?

Knowing how to measure value, makes it easier to create value. Popular opinion has it that, the measure of a product's value is based on the impact of its SOLUTION. That is, if a solution can do all things known to man and more, then the solution can be termed "Valuable". I however, have a differing opinion. The value of a product is not based on the impact of its solution, but the impact of its PROBLEM.


Even if a solution "can do all things known to man and more", if that "all things known to man and more" is not a problem to the customer, you just potentially wasted that investment. Therefore, I believe that the key to understanding the value of a product is to measure its Problem Impact. I will explain further with a scenario.


If you went into a Pharmacy with a slight headache to buy a Pack of Paracetamol and the price on it was £100, you would probably freak out, wipe your fingerprint off it and hurry out of the Pharmacy. Therefore, the likelihood of such a purchase would be 0-10% (the 10% is for people with a company credit card!).

If, however, you had walked into the Pharmacy with a splitting migraine- you know, the kind of migraine that hurts so badly that you almost can't see- and you needed to buy a Pack of Paracetamol but the price on it was £120. At this point you're not sure you would survive a trip to the next Pharmacy, so you would sigh and pay for it. Therefore, the likelihood of this purchase would then become 40-80% (to be fair, the fact that you almost couldn't see the price is a good excuse for paying such an exorbitant amount for paracetamol!)

Did you notice that the Impact of the Solution remained the same (the impact of the paracetamol is that it cures headaches/migraine). The Impact of the Solution did not matter to the buyer/customer, what mattered was the Impact of the Problem. It was the impact of the problem made the likelihood of purchase higher at that ridiculous price.

How can one measure the Problem Impact:

I don't know.

The reason I don't know is because I have not read about a set way to do this, however, I have a combination of techniques that I use. The essence of this article is not to teach how to measure the Impact of a Problem, but to communicate the importance of focusing on the Impact of a Problem, rather than the Impact of the Solution, when assessing the Value of a product. This skill is necessary if you have a list of features in a backlog, or a number of products in your portfolio and you need to pick which feature/product should be worked on next.


You hear a lot of modern professionals say "Stop solutionising!". Although I joined this gang, it took me almost a year to understand what it actually meant. Imagine spending 2 months analysing the perfect solution, then realising that the solution was fixing the wrong problem all along, it would be heart-breaking. Identifying the right problem is more difficult than finding the right solution. To be honest, solutions are very easy to find, constraints just make it hard to accept the solutions at our finger tips.

I remember this one time I embarked on land travel in Nigeria. After 3 hours on the road of vast emptiness, I spotted a restaurant by the road and ran in quickly to use the toilet. This restaurant had an impressive revenue model, where they charged non-customers a fee to use their toilets and they certainly generated a lot of money from it, because there was a queue.

Let’s ignore how “unethical” this revenue model may be, and focus on the fact that they understood the impact of a problem. It didn’t matter if the toilets were clean or functional (solution impact), they charged a premium because they understood the pressing need to use a toilet after a 3 hour journey (problem impact). They created value from the problem impact.

So, the next time you're about to solve a problem, pause and ask yourself, "Is this really the right problem?"

#businessanalyst #problemimpact #solutionimpact #valuecreation #fairygodmother


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