Agile Gambling: A Cautionary Tale!

1© SmoothApps 2014 All rights reserved. www.smoothapps.com

HOW THE ROAD TO AGILE COACHING MADE ME A GAMBLING ADDICT!

A CAUTIONARY TALE

RAVI VERMA

THE ORG WHISPERER

2© 1993-2014 Scrum.org, All Rights Reserved

About Me…

• Education: Bachelors in Computer Sc. & Engg.

Masters in Entrepreneurship

• Certifications: PST (PSF, PSM, PSPO), PSE, PSM II, PSPO II, PSD I

Evidence Based Management Consultant

MBTI Certified Practitioner

Certified in Advanced Conflict Resolution

Certificate in Organizational Development

• Experience: Sr. Principal – Enterprise Agile Deployment, Sabre

Founder & Org Whisperer – SmoothApps

16+ years in SW Delivery, Consulting

Siemens, HP, Avaya, Cisco, AT&T. among others

Dev Background: C/C++, VC++, Win32 SDK, Oracle…


•Not easy•Big Risk!•Responsibility

• To myself and the industry• To caution others who are on this slippery slope

•1st step in the healing process

Why Am I Doing This…?


BOSTON

TTT

Let’s Start at the Beginning…


Imagine…


$50K

1BET@$50K 50 BETS @ $1KWhat would you choose…? Why…?

X


• In an environment of risk and uncertainty,• Smaller bets are better• Allow us to look at actual results• Adapt our approach• Alter future bets

•But what does all this have to do with software delivery…?

Risks & Uncertainty


• Things rarely turn out the way we expect them to• How often…

• Are business and I.T. on the same page - “what” we should build?• Are I.T. teams on the same page – “how” we should build it?• Do 3rd party components behave exactly as we thought they would…?• Does solution behave the same way in production as in the lab?• Do customers behave exactly the way you expected them to…?• Does the market remain static between the time the requirement is created to the time the solution was deployed?

Uncertainties in Complex Software Delivery…


•There are none!•Anyone who says otherwise is…

• Mis-informedor

• Not talking about “COMPLEX” Software Delivery

Guarantees in Complex Software Delivery…

“COMPLEX” Software Delivery


•This uncertainty puts a lot at risk…• Investment in I.T.• Delays in time to market• Loss of revenue• Loss of market share• Other…?

The Stakes…


•When so much is at stake, how can we manage the risk so we don’t lose more than we can afford…?

Key Question…


“What gets measured gets managed.” – Peter Drucker

•How can we measure the size of our bets…?•Let’s look at a simple model…

The First Step…


•Avg. hrly. blended rate per team member:

•Avg. # of team members / scrum team*:

•Avg. # of scrum teams / project:

•Avg. # of projects / program:

•Avg. # of programs / portfolio:

Assumptions…$85 /hr

* Assumes 9 Developers and shared Scrum Master / Product Owner

10

5

5

2


• # of working hours per day:

• # of working days in week:

• # of weeks in sprint:

• Approximate # of sprints in…

• 1 Quarter:

• 2 Quarters:

• 3 Quarters:

• 1 year:

Assumptions…8

5

4

3

9

6

12


DeveloperDeveloper

DeveloperDeveloper

Developer

Developer

Developer

Developer

Developer

A Scrum Team

ProductOwner

ScrumMaster

A Scrum Team…

* Assumes 9 Developers and shared Scrum Master

/ Product Owner


PROJECTA Project…


A ProgramPROGRAM


PORTFOLIO

A Portfolio…


•How might we measure the build up of these bets…?

Tracking the bets…


1 Team Member… Developer

$50K

$100K

$150K


1 Scrum Team…

$.5M

$1M

$1.5M


1 Project / 5 Scrum Teams…

$2M

$4M

$6M

$8M

$.5M


1 Program / 5 Projects / 25 Scrum Teams…

$10M

$20M

$30M

$40M

$3M


1 Portfolio / 2 Programs / 50 Scrum Teams…

$20M

$40M

$60M

$80M

$6M


Comparing the bets…


• What are their expectations about ROI? What is their investment horizon?

• How big a bet are they willing for you to make on their behalf…?

• How much I.T. investment are they willing to lose on invalid assumptions?

• How many weeks of delay in time to market are they willing to accept?

• How much revenue loss are they willing to accept?

About Your Investors…


About your Investors…

• Its usually 4 weeks or less…


Once you know…

• Adjust your sprint size within their risk tolerance!• Find a way to integrate and deploy to production every sprint

• Even if it’s turned off


•Once we quantify the size of the bets, we need an effective way to manage them

•We must elevate empiricism to the business level•One possible way of doing this…

• Evidence Based Management, or EBMgt ™…

Managing the bets…


• The complexity and the creative nature of software development make it a highly fascinating, yet quite unpredictable business.

• Scrum employs empiricism, systematic inspection and adaptation, to deal with the unpredictability typical to software development.

• Empiricism is also a pillar of ‘Evidence-Based Management’ – “EBMgt ™”…

Evidence Based Management – “EBMgt ™”

30

WHITEPAPER – Empirical Management Explored: EBMgmt for Software Organizations, Gunther Verheyen, Scrum.org

Gunther Verheyen

https://www.scrum.org/About/All-Articles/articleType/ArticleView/articleId/858/Empirical-Management-Explored-Evidence-Based-Management-for-Software-Organizations


• Managers in product-development organizations are shifting towards using evidence for better decision-making.

• Information and insights gained from having actually performed some work are infinitely more valuable than any upfront theory, assumption or prediction.

• In the absence of observable work, all preliminary information is to be considered a hypothesis, not knowledge or evidence.

31



Gunther Verheyen



• What do we need to make informed decisions?

• Without knowledge no informed decision about the future can be made.

• Where does knowledge come from?• Knowledge is gained when an actual working result can be compared

against a stated hypothesis and the observers capitalize on the findings that emerge from the comparison.

• How can we create a methodical way to collect knowledge?

32



Gunther Verheyen



• A highly dynamic and safe way to gather evidence of what does and does not work is to create repeated cycles of

1.Stating a hypothesis2.Working on the hypothesis for a limited time 3.Verifying results of the work

• This approach enables learning and improving while effectively making progress.

33



Gunther Verheyen







• Complex software delivery islike high-stakes gambling

• Even the smartest person / team cannot consistently predict / guarantee…• The solution will work exactly as we designed on

paper• How the market will react • How much business value will be generated

In Summary…

36


•Every morning, our investors give us abriefcase of cash…

The Daily Brief-Case


•Our investors expect us to be effective at gambling with their time and money

• Understand their risk tolerance• Be transparent about the size of the bets• Manage the bets to optimize ROI / Value

•We owe it to them to be “Expert Empirical Gamblers”

Responsibility


•Empirical gambling requires three pillars…

• TRANSPARENCY: Into size & placement of the bets

• INSPECTION: Of results of the bets• ADAPTATION: Of size and placement of future bets

Empirical Gambling


• Evidence Based Management –“EBMgt™” can help us get better…1. Create / Refine hypotheses2. Transparently place small, calculated bets3. Deploy to production 4. Inspect the market response5. Measure ROI6. Learn 7. Adapt future bets

Empirical Agile Gambling

40


•Yes, those of us in Complex Software Delivery are high-stakes gamblers

•For us to be effective, we must…1. Come out of denial2. Acknowledge the reality3. Get better at it

In Summary


•What is your investors’ risk tolerance?

•How can you track your bets?•How can you manage your bets?

•How will you continuously learn and adapt?

Call to Action


• What was your most valuable takeaway?

• What is one baby step you will take in the next 30 days to apply what you learned today?


Let’s Talk…

Ravi Verma The Org Whisperer

smoothapps

smoothapps

orgwhisperer

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Agile Gambling: A Cautionary Tale!