6.2 Market Value: Current Value (CV) & Unrealized Value (UV)
Key Takeaways
The Market Value dimension of EBM evaluates external commercial and customer impact through two complementary Key Value Areas (KVAs): Current Value (CV) and Unrealized Value (UV).
EBM's example Current Value measures are revenue per employee, product cost ratio, employee satisfaction, customer satisfaction, and customer usage index.
EBM's example Unrealized Value measures are potential market share, the customer or user satisfaction gap, and desired customer experience or satisfaction.
Reading CV and UV together guides investment: high CV with low UV favors optimizing, low CV with high UV favors experimentation, and low CV with low UV suggests a pivot or sunset.
Employee Satisfaction is a foundational Current Value measure; an organization cannot sustainably deliver high customer value with an exhausted, burned-out, or disengaged engineering workforce.
6.2 Market Value: Current Value (CV) & Unrealized Value (UV)
Note
In Evidence-Based Management, value is not defined by internal effort, architectural elegance, or story points delivered. Value exists exclusively in the external relationship between the product, its users, and the enterprise. The Market Value dimension balances what is being harvested today against what could be captured tomorrow.
The Market Value Dimension of EBM
To make rational investment decisions under uncertainty, an organization must understand its position in the market. Many enterprises make one of two catastrophic strategic errors: they either pour millions of dollars into over-engineering mature products that already satisfy their customers' needs, or they under-invest in high-potential opportunities because early revenue is modest. EBM prevents these failures by separating market value into two complementary Key Value Areas (KVAs):
- Current Value (CV): The value delivered today to customers, users, and the enterprise.
- Unrealized Value (UV): The potential future value that could be captured if the product met all ideal customer and market needs.
By measuring both KVAs simultaneously, leadership can evaluate whether continued investment in a product will yield a positive economic return, or whether capital should be redirected to new strategic initiatives.
Current Value (CV): Realized Value in the Present
Current Value answers the fundamental question: "How much value are we delivering right now?" It evaluates the current health, profitability, and effectiveness of the product from the perspective of three key beneficiaries: customers, users, and the organization itself.
Core Key Value Measures (KVMs) for Current Value:
The EBM Guide stresses that it "defines no specific Key Value Measures"; the measures below are its published examples, plus common ways to collect them.
- Customer Satisfaction (e.g., CSAT or Net Promoter Score): Quantitative measures of customer perception, loyalty, and willingness to recommend the product. Declining CSAT is an early warning indicator that Current Value is decaying, even if short-term revenue remains temporarily stable due to contractual lock-in.
- Customer Usage Index: Measurement of usage, by feature, to infer whether customers find the product useful and whether actual usage meets expectations (for example, task completion rates and time spent per feature). A product that frustrates users has a fragile Current Value.
- Employee Satisfaction (Developer Happiness & Engagement): Evaluates the engagement, psychological safety, and morale of the people building and supporting the product. In complex knowledge work, Employee Satisfaction is not an optional HR metric—it is a leading indicator of Current Value. Burned-out, disengaged teams inevitably produce defect-ridden software, alienating customers and degrading value delivery.
- Revenue per Employee & Product Cost Ratio: Revenue per employee (gross revenue ÷ number of employees) is a competitive indicator that varies widely by industry. Product Cost Ratio compares the total expenses and costs for the product, including operational costs, with its revenue. If the cost of sustaining a product exceeds the value it generates, it is an economic drain.
Unrealized Value (UV): The Horizon of Uncaptured Potential
Unrealized Value answers the question: "Is it worth continuing to invest in this product or capability?" It quantifies the gap between the current state of the product and the total addressable market potential. Even if a product is highly profitable today (high CV), if there is no remaining unmet customer need or market share to capture, continuing to pour feature development budget into it yields diminishing returns.
Core Key Value Measures (KVMs) for Unrealized Value:
- Potential Market Share: The market share the product might achieve if it better met customer needs. A large gap between current and potential share in a growing market signals significant Unrealized Value.
- Customer or User Satisfaction Gap: The difference between the customer's current experience and the ideal experience they desire. If users are deeply frustrated with existing market solutions (including competitors), a significant satisfaction gap exists waiting to be exploited by an innovative product.
- Desired Customer Experience or Satisfaction: A measure of the experience the customer would like to have—specific unmet needs, unserved personas, or workflow friction points. Identifying these provides the empirical basis for high-impact hypotheses.
Portfolio and Product Strategy: The CV vs. UV Strategic Matrix
The EBM Guide asks leaders to look at Current Value and Unrealized Value together. The quadrant below is an illustrative teaching device (the labels are not EBM terminology), but it shows how the two KVAs combine into investment conversations:
| Low Unrealized Value | High Unrealized Value | |
|---|---|---|
| High Current Value | Mature product — optimize and sustain | Strategic growth engine — expand and defend |
| Low Current Value | Danger zone — pivot or sunset | High-growth opportunity — experiment aggressively |
1. High CV, Low UV: The Mature Cash Cow
- Profile: The product generates substantial, steady revenue, boasts high customer satisfaction, and dominates its niche. However, market growth has plateaued, and the Customer Satisfaction Gap is virtually zero. Customers are satisfied with what exists and do not need additional features.
- Strategic Action: Optimize operations and harvest capital. Maintain system stability, reduce maintenance costs through technical automation, and avoid over-investing in low-ROI feature development. Use the cash flow generated by this product to fund high-UV initiatives elsewhere in the enterprise.
- Common Anti-Pattern: Continuing to fund three full Scrum Teams to add cosmetic, low-value features to a mature application simply because the teams have historically worked on that product.
2. Low CV, High UV: The High-Growth Opportunity
- Profile: The product is in its early stages, an MVP, or entering a massive new market. Current revenue and user numbers are modest, but the total addressable market is enormous and customer dissatisfaction with existing alternatives is severe.
- Strategic Action: Aggressive experimentation and rapid learning loops. Invest heavily in innovation, run short Sprints, and tolerate high hypothesis failure rates to discover product-market fit. Focus Sprint Goals on closing the Customer Satisfaction Gap rather than maximizing short-term quarterly revenue.
- Common Anti-Pattern: Prematurely killing a promising innovative product because it fails to generate immediate enterprise-scale profits in its first few Sprints.
3. Low CV, Low UV: The Danger Zone
- Profile: The product generates meager revenue, customer satisfaction is poor, and the total addressable market is shrinking or non-existent. There is neither present reward nor future upside.
- Strategic Action: Decisive pivot or graceful decommissioning. The organization must either radically pivot the product's Strategic Goal to discover new value or sunset the application to stop squandering precious engineering capacity.
- Common Anti-Pattern: Sunk-cost fallacy—continuing to fund a failing initiative because millions of dollars and years of effort have already been invested.
4. High CV, High UV: The Strategic Growth Engine
- Profile: The product is already a market leader generating high value, but substantial adjacent market segments or unaddressed customer needs remain untapped.
- Strategic Action: Balanced expansion and aggressive defense. Protect the core revenue engine while launching dedicated experimental initiatives to capture adjacent market share.
Comprehensive Reference: Market Value Key Value Measures (KVMs)
The table below outlines the core KVMs across the Market Value dimension, detailing their measurement mechanisms and strategic signals:
| KVA | Key Value Measure (KVM) | Measurement Mechanism | Strategic Signal |
|---|---|---|---|
| Current Value (CV) | Customer Satisfaction (CSAT / NPS) | Periodic transactional surveys, net promoter tracking | Drop indicates product degradation or emerging competitive threats. |
| Current Value (CV) | Customer Usage Index | Usage by feature; task completion time, drop-off rates | Low or unexpected usage signals features customers do not find useful. |
| Current Value (CV) | Employee Satisfaction | Anonymous pulse surveys, team retention, eNPS | Low score is a leading indicator of technical debt, quality drops, and turnover. |
| Current Value (CV) | Product Cost Ratio | Total product expenses, including operations, compared with revenue | Rising ratio warns that maintenance and overhead are eroding profitability. |
| Unrealized Value (UV) | Potential Market Share | Share the product might reach if it better met customer needs | A large gap to potential share indicates high upside. |
| Unrealized Value (UV) | Customer or User Satisfaction Gap | Delta between actual customer experience and desired ideal experience | Large gap represents commercial opportunity for disruptive innovation. |
| Unrealized Value (UV) | Desired Customer Experience or Satisfaction | Qualitative discovery, unmet user pain points, unserved workflows | Highlights specific functional domains where new experiments will yield high returns. |
An enterprise software product commands an 88% market share in its specialized compliance domain, generating $50M in annual recurring revenue with a high Net Promoter Score of +65. Market analysis confirms that the addressable customer base is fully saturated and users are highly satisfied with the existing feature set. The Product Owner requests a $10M capital budget to build an artificial intelligence recommendation engine into the product. How should the Scrum Master coach leadership and the Product Owner using EBM Market Value concepts?
Support the $10M funding request unconditionally, because agile teams must continuously deliver innovative features to keep Developers engaged and fully utilized throughout the year.
Instruct the Developers to artificially downgrade the system's performance so that customer satisfaction drops, creating a synthetic Customer Satisfaction Gap that justifies the budget.
Advise the Product Owner that Scrum prohibits maintaining mature software, recommending that the entire product be immediately discontinued and replaced with an experimental AI platform.
Coach leadership that high Current Value with low Unrealized Value means heavy feature investment has diminishing returns; sustain the product efficiently and redirect capital to high-UV opportunities.
A digital healthcare startup has launched an MVP mobile app that connects patients with rare disease specialists. Current revenue is negligible ($15,000/month) and user adoption is currently modest. However, nationwide patient surveys reveal an enormous unmet need in a $20B addressable market where patients currently wait an average of 9 months to see a specialist. Several investor board members demand immediate profitability and threaten to shut down the initiative. How should the Scrum Master guide the organization using EBM?
Guide leadership to see a low Current Value but high Unrealized Value opportunity, where fast experimentation to close the satisfaction gap matters more than early monetization.
Advise the Developers to double their working hours and build a billing paywall feature in the next Sprint to force immediate profitability, regardless of the friction it adds for patients.
Agree with the investors that any product failing to generate enterprise-scale profits within six months should be immediately decommissioned.
Recommend that the team abandon all customer research and focus strictly on increasing their story point velocity to impress the board of directors at the next quarterly review.
An executive committee evaluates a core banking product solely through quarterly financial revenue and profit margins. Over the past three quarters, revenue has risen by 15%, leading executives to conclude the product's Current Value is at an all-time high. However, internal data shows that developer turnover has reached 40%, technical support ticket volume has quadrupled, and user friction during mobile onboarding has increased significantly. How should the Scrum Master coach the executive committee?
Agree that financial revenue is the only legitimate indicator of Current Value, and suggest that human resources hire replacement developers at lower salaries to improve margins.
Coach that Current Value must balance revenue with customer satisfaction, usage, and employee satisfaction, because burnout and friction signal fragile value.
Advise the Developers to ignore customer support tickets completely so they can focus on delivering new revenue-generating features requested by the executive committee this quarter.
Instruct the Product Owner to convert the Scrum Team into a dedicated production support team and eliminate the Sprint Review event.
Sections you finish are checked off in the contents.