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 @ $1K
What 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-informed
or
• 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
Product
Owner
Scrum
Master
A Scrum Team…
* Assumes 9 Developers
and shared Scrum Master
/ Product Owner

PROJECT
A Project…

A Program
PROGRAM

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

• 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 hypothesis
2.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 is
like 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 a
briefcase 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 hypotheses
2. Transparently place small, calculated bets
3. Deploy to production
4. Inspect the market response
5. Measure ROI
6. 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 denial
2. Acknowledge the reality
3. 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

Agile Gambling: A Cautionary Tale!

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