Skip to main content

Thought for the day: Venture Capitalists Should Only Invest in Agile Companies

In a new talk, Scrum cofounder Jeff Sutherland makes a compelling argument for Scrum, XP and Lean as the basis for "hyper-productive" companies. The potential improvement is on the order of a factor of 10(!). But to get those gains, you have to adopt Scrum and adapt yourself to Scrum, not the other way around.

The actual competitive advantage which can be achieved by consequently deploying the principles and practices of Scrum, Lean and XP have coincided with substantial revenue gains for the companies concerned:
  • Excellent Scrum - annual revenue up 400%
  • Good Scrum - revenue up 300%
  • Pretty Good Scrum - revenue up 150% - 200%
  • ScrumButt - revenue up 0-35%
BTW - "ScrumButt" companies score 7 or less on the Nokia test.

His recommendations to investors:
  • Invest only in Agile projects
  • Invest only in market leading, industry standard processes – this means Scrum and XP
  • Ensure teams implement basic Scrum practices
His recommendations to managers:
  1. Get your teams to pass the Nokia test. 
  2. Get management totally involved.
  3. Use communication saturation as a competitive advantage.
    • What backlog item will drive the earliest appearance of a high priority feature that can be tested?
    • Entire team decides this and it is the first thing selected to be worked on. 
  4. Extend the definition of done
A fascinating talk, which he will repeat at Agile 2008

Comments

Hey,

what else would you propose if you were Jeff? In short: Invest into me, give me all your money because I am the one who knows best how to use it ;-)

Once again I don't like the terms like hyper-productivity.

However he is right in summarizing key factors for productivity: Involvement/commitment and removal of impediments. Small highly committed team, focusing on producing business value.

Regards
Felix
Peter said…
Agreed - Hyper is, well, uh, hype. I'm going to put it in quotes.

I have personally experienced a factor of three productivity spread from a team in a very disorganized state to that same team in very productive state with most impediments removed.

So I do believe his analysis: 30% improvements if you get something close to Scrum, much more is possible if you deeply institutionalize it.

Cheers,

Peter

Popular posts from this blog

Sample Definition of Done

Why does Scrum have a Definition of Done? Simple, everyone involved in the project needs to know and understand what Done means. Furthermore, Done should be really done, as in, 'there is nothing stopping us from earning value with this function, except maybe the go-ahead from the Product Owner. Consider the alternative:
Project Manager: Is this function done?
Developer: Yes
Project Manager: So we can ship it?
Developer: Well, No. It needs to be tested, and I need to write some documentation, but the code works, really. I tested it... (pause) ...on my machine. What's wrong with this exchange? To the developer and to the project manager, "done" means something rather different. To the developer in this case, done means: "I don't have to work on this piece of code any more (unless the tester tells me something is wrong)." The project leader is looking for a statement that the code is ready to ship.

At its most basic level, a definition of Done creates a sh…

Scaling Scrum: SAFe, DAD, or LeSS?

Participants in last week's Scrum MasterClass wanted to evaluate approaches to scaling Scrum and Agile for their large enterprise. So I set out to review the available frameworks. Which one is best for your situation?

Recently a number of approaches have started gaining attention, including the Scaled Agile Framework ("SAFe") by Dean Leffingwell, Disciplined Agile Development (DAD), by Scott Ambler, and Large Scale Scrum (LeSS), by Craig Larman and Bas Vodde. (Follow the links for white papers or overviews of each approach).

How to compare these approaches? My starting point is Scrum in the team. Scrum has proven very effective at helping teams perform, even though it does not directly address the issues surrounding larger organizations and teams. An approach to scaling Scrum should not be inconsistent with Scrum itself.

Scrum implements a small number of principles and constraints: Inspect and Adapt. An interdisciplinary Team solves the problem. Deliver something of va…

Five Simple Questions To Determine If You Have the Agile Mindset

My company has started a top-down transition to Scrum and Kanban. Will that make us an Agile company? About 2 years ago, I attended a conference hosted by the Swiss Association for Quality on the topic of Agility. As a warm-up exercise, the participants were given the 4 values of the Agile Manifesto, then asked to arrange themselves in space. How Agile is your company? How Agile do you think it should be? Very Agile on left, very traditional on the right. There was a cluster of people standing well to the right of center. “Why are you standing on the right?” It turns out that they were all from the railway. “Our job is to run the trains on time.” They were uncertain whether this agility thing was really aligned with their purpose.
Is Agility limited to software? Steve Denning has collected the evidence and laid out the case that Agile is not limited to software, nor is it merely a process, nor is it something you can do with part of your time, nor is it something you can have your …