Kent Beck’s 3X — Explore, Expand, Extract
Success & Payoff: navigating the path of winning ideas
–By Antony Marcano, with Andy Palmer
3x: Explore, Expand, Extract — is a thinking model to frame, understand and adapt to the changing contexts on the path of a winning idea. In a business setting, it offers a model of alignment — as applicable to CEOs, CFOs, CIOs & CTOs, as to product management, development, operations and beyond…
3X is the brain-child of Kent Beck — father of many agile practices we all take for granted today — and has arisen, not least, from his years at Facebook. He noticed that Facebook did things differently, culminating in him distinguishing 3 key phases of a winning idea…
“Explore–the risky search for a viable return on a viable investment [via experimentation]…If you’re lucky, one of these experiments turns out to be unexpectedly successful, which leads to:
Expand–now things are going nuts… Unanticipated bottlenecks appear… Once growth becomes routine, it’s time to:
Extract–now the shape of the problem and solution spaces are clear. One euro in equals three euros out. Playbooks emerge…Economies of scale matter…”
– Kent Beck, The Product Development Triathlon
How we progress an idea changes depending on where it is on its journey — including how we finance it, test it, plan it, implement it, evolve it and manage risk (for more, see Topics in 3X).
If we understand where a winning idea is on this path, the more likely it is that those ideas that can win, will win.
Not all ideas are winning ideas. Recognising when an idea is stuck on its journey — say when the payoff is too elusive or expensive to achieve — can save other ideas from missing out on our investment. Then there are those winning ideas that have the potential to go all the way but die — simply because we weren’t investing in the right way for the phase it was in.
If we better understand where a winning idea is on this journey, what the concerns are for that phase (e.g. discovery/growth/efficiency) and how to take that idea to the next phase, the more likely it is that those ideas that can win, will win.
A winning idea is one that works for both the consumer and producer — when the result is a win-win.
To explain 3X in familiar terms, we can use the example of photo-tagging on Facebook (an example that Kent uses often).
On Facebook, we can tag friends in our photos. They get a notification that we’ve tagged them and then view the photo too. They tag a friend, now someone else is viewing our photo. People start engaging — commenting on the page, returning to reply when someone else comments, sharing it on their page and inspiring yet more comments. Now people are spending more time on Facebook.
The introduction of photo-tagging on Facebook meant…
- The consumers (users of Facebook) get to see photos, connect, be inspired, reminisce. Win!
- The producers (the business of Facebook) get more engagement — people spend more time there. Win!
A winning idea is one that works for both the consumer and the producer — when the result is a win-win. Let’s explore this further…
Success is how we measure that there are outcomes-that-matter;
Payoff is how we measure the impact-that-matters.
In Results Based Management, results are thought of in terms of Outputs, Outcomes & Impact:
- Outputs: the first level — these are the things that are consumed. Outputs are anything released into the real world. Outputs can be at any level — a small enhancement, a new feature, or an entire new product. These lead to…
- Outcomes: the second level — an effect of our outputs on our consumers. Outcomes can be at any level — completing more of a given task per hour (e.g. from an enhancement), being able to do something new (e.g. a new capability), or solving a new set of problems (e.g. with a new product or business). These lead to…
- Impact: the third level — the effect of the outcomes on our goals. Impact can be at any level — more engagement, more financial return, or the change we want to make in the world.
Outcomes and Impact can be positive or negative. Some will matter, some will not. A winning idea has both positive outcomes-that-matter and a positive impact-that-matters.
Success is how we measure that there are outcomes-that-matter; Payoff is how we measure the impact-that-matters.
Success: how we know that our consumers are winning;
Payoff: how we know that we, the producers, are winning.
In the Facebook example, the output was the photo-tagging feature. Its a win-win because there is an outcome-that-matters and an impact-that-matters.
The 3X graph gives us a model to look at this from the point of view of the producer. How do we know if there is an outcome-that-matters — our consumers are winning? How do we know that it’s having an impact-that-matters — we’re winning?
For example, with photo-tagging we might measure Success by the number of people tagging photos; Payoff by likes, comments and shares.
Success is what we measure in order to know that there are outcomes-that-matter to our consumers (perhaps only a signal, not necessarily the outcome itself). Payoff is how we measure the impact-that-matters.
The 3X phases frame the context in which certain values, principles and practices apply.
As the phase changes, so does the context around us:
- In Explore — we can take bigger risks; there’s little to lose; hacking is our friend, not our enemy — there is little concept of technical debt as most outputs will be discarded. How will we know that it’s worth further investment? Success. Our exploration may then shift from “Does this matter to our consumers?” towards “How does this benefit us?” Now we see signs of a Payoff…
- In Expand — our ideas begin to solidify, many of the practices that we are familiar with start to be important. It’s essential that today’s implementation of our idea continues to work. Meeting growing demand matters. Scale and performance become a concern. We remain in this state until things become predictable…
- In Extract — efficiency of meeting the, now, high and predictable demand matters and there’s much more to lose. Changes to our idea may need increased levels of safety. The problems that predictive cultures (e.g. waterfall) are trying to solve comes into play.
Payoff changes depending on which phase an idea is in, relative to the phase of the ideas that contain them.
Now we’re into the multiple layers through which 3X applies — it’s Turtles all the way down. That is, the phase a business is in will change the impact-that-matters for their product ideas, and the phase a product is in will change the impact-that matters for their feature ideas… But now we’re getting into the fractal nature of 3X. That is a whole other story. One for another day…
Update 2018–01–12: Embedded tweet with illustration of risk appetite and technical debt.
Special thanks to:
Kent Beck for helping me deepen my understanding of 3X through our conversations both at Facebook and various places around London — over meals, drinks and tube rides — and of course, asynchronously over Facebook Messenger.
Andy Palmer for his invaluable help in editing this article, challenging my thinking with endless questions, thoughts and insights.
Monika Turska for listening to me think out-loud and challenge my thinking and explanations with insights, thoughts and questions.
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