Real Agility Program – Recommendations (Assessment and Playbook)

Recommendations IconWe have already written about how Leadership and Delivery Teams operate in a Real Agility Program.  It’s time to look at our Recommendations component: getting started on the right path for Real Agility.

Recommendations = Assessment + Playbook

In the assessment portion of the Recommendations component, we gather information about the current situation at an organization.  This includes everything from detailed practices, processes and tools, to strategies and organizational culture.  This assessment work is designed to help everyone understand the organization’s current gaps, and what strengths it has that will best support it to cross those gaps to Real Agility.  The Assessment includes an online portion, an on-site portion and an off-site portion.  The assessment work naturally leads to the development of the playbook.

The online assessment requires that each person throughout an organization complete an online survey about corporate culture.  It includes three major sections: existing challenges, sense of urgency, and level of teamwork.  This cultural survey is the foundation of understanding how to be successful with Real Agility.  Managers and leaders are also asked to complete an additional questionnaire about the current environment at the organization.  This includes high-level information about the structure of the organization, client and vendor relationships, and staff.  Additional surveys may also be administered to understand other aspects of the organization.  For example, in an organization that is struggling to use Scrum, we will often use the Scrum Team Assessment.

The onsite portion of the assessment combines in-person interviews and workshops with staff and managers.  Interviews explore aspects of the corporate work environment in more depth and include questions about familiarity with Agile methods, and obstacles that people might see to adopting Agile.  The workshops gather data around current challenges and strengths, success criteria for projects, situational analysis for teams, and existing metrics (or lack thereof).  Typically we need a meeting room committed to our consultants for doing interviews.

The offsite portion of the assessment is used for us to evaluate and analyze the survey, interview and workshop results.  We also use some time to review any relevant documentation such as process templates, org charts, governance requirements, etc.  We may also use some of this time for follow-up phone calls or emails to clarify aspects of the assessment results.  Finally, this offsite work is also where we do the bulk of the development of the recommendations in the playbook.

Several aspects of our assessment are based on the OpenAgile Catalyst Assessment Tools which are open-source and can be found online.  We also have a number of proprietary tools.

The playbook maps out a path to a successful Real Agility transformation.  It is a road map that helps leaders, managers and team members make good business decisions as they strive for Real Agility.  The playbook aids the organization to effectively and appropriately launch Real Agility teams: management teams, project teams, and operational teams.  The Real Agility Program playbook includes analysis of the assessment results, recommendations for work that the organization can do on its own and suggests outside assistance that enhances Real Agility results.  Two critical questions that are answered in the Playbook include:

  • What Agile method or methods should we be using and why?
  • What organizational change approach should we take and why?

We deliver the recommendations in the form of the playbook and an executive summary slide deck in an iterative and incremental fashion so that stakeholders can give us early feedback and so that we can adapt our assessment agenda as we go along.  The recommendations include ideas about organizational structure, staffing, governance changes, departmental relationships, tooling, and many other aspects of how an enterprise can best become and Agile enterprise.

Following the Recommendations in the Real Agility Program playbook results in huge time-to-market improvements, 200% (or better) productivity boost for delivery teams, and extremely satisfied customers and staff.

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Real Agility Program – Leadership Transformation Team

Leadership IconOne of the main components of our Real Agility Program for enterprise Agile transformations is the Leadership Development track.  This track is a series of monthly leadership meetings with one of our consultants to help them establish their Leadership Transformation Team.  This team is based in part on the concept of a guiding coalition from John Kotter’s work (see “Leading Change“), and in part on Edgar Schein’s work on corporate culture (see “The Corporate Culture Survival Guide“) as well as our own specific experience on successful Agile transformations in organizations.

The very first thing, of course, is to establish who should be on the Leadership Transformation Team.  There are six major categories from which the team must find representatives:

  1. The Executive Sponsor, for example the CIO
  2. Business Management, for example an SVP of Sales or Product Development
  3. Process Management, for example the head of the PMO or Compliance
  4. Technology Management, for example VP of Technology or Development
  5. Human Resources, for example a Director of Staff Development and Training
  6. and Apprentice Agile Coaches / Agile Champions

In total, the number of people on this team should be no more than 12, but smaller is better.

Once established, this Leadership Transformation Team must execute on three core responsibilities in perpetuity:

  1. Urgency and Vision: constant, strong, repetitive, prominent communication of the reasons for change and a high level view of how those changes will happen.
  2. Lead by Example: use of an Agile approach to run the Leadership Transformation Team’s work – we recommend OpenAgile for the process, but Kanban may also be used.
  3. Empower Staff: focus on removing obstacles by making structural changes in the organization, helping staff master standard Agile processes and tools, and eventually, creating innovative Agile approaches customized for the organization.

This leadership support is a critical success factor for an Agile Transformation.  One of the first steps in our program for this team is to help with the creation of the team’s plan for the transformation.  This plan can be derived from an number of sources including assessment work, but includes a number of standard items that must eventually be addressed for a successful transformation.  At a high level, these include:

  • Hiring, performance evaluation and compensation
  • Reporting relationships
  • What to do with project managers, business analysts, testers and certain middle managers
  • Key metrics and processes for measuring progress
  • Technology and physical environment
  • Vendor relationships and contracts
  • Compliance, regulation and documentation

Many of these items are multi-year change efforts that need to be closely guided and encouraged by the Leadership Transformation Team.

One final point about the Leadership Transformation Team needs to be made: the work they do must not be delegated to subordinates.  If something is part of their three core responsibilities, it must be handled directly by the members of this team.  Therefore, the team members need to allocate a significant percentage of their time to the effort.  Usually 20% is sufficient to get started.  The proportion may wax and wane slightly over time, but if it gets too low, the Leadership Transformation Team will lose touch with the transformation and the risk of it going bad increases substantially.

See also our article about the Recommendations component of the Real Agility Program.

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Be able to explain WHY.

Every once in a while I’m reminded of the very important question: WHY?

If you are considering SCRUM, XP, Lean or any other Agile Framework, or if you are considering using OpenAgile which is an Open Learning System, you will be changing the organization.

Many people think they can do “Agile in a bubble” and therefore not interact with the rest of the organization.  You will likely find that you will quickly run into obstacles to using the Framework.

Just the iterative process alone will change the way stakeholders interact with teams, meeting rooms are scheduled, vacation schedules, communication requirements, team spaces and/or seating, the responsibilities of stakeholders, and even the interactions between team members and other departments.  Because of this, working towards Agility WILL change your organization.

You may start out with an aggressive framework such as XP(Extreme Programming), or something a little more gentle such as Kanban or Lean (which let you start out as you are and visualize your process).  However, please don’t kid yourself; you will eventually need to change the way things get done in the company.

 

Which WayWhether you are the OpenAgile Growth Facilitator, a Scrum Master trying to introduce Agile from the grass-roots, or if you are the CEO or CIO trying to introduce change from that level, you will eventually need to address the WHY for the change.

Managers and employees alike need to know why they are being asked to leave their comfort zones.  In some cases they will be going against everything they have learned in the past about people management or how they should work.  They need to know the reason.

 

Whatever level you are in at your company, please be ready to explain why you are making the change to an Agile Environment.  Something like “to be more efficient”, isn’t really going to cut it.

  • Is it to be more competitive against other companies breaking into our market and you need to change quickly to stave them off?  To give this message, you would need to let people know that you are concerned about this.  This is part of the Transparency of Agile.  If you know this, but are not willing to pass this on to your managers or teams, you will have struggles when managers don’t know why you are changing their environments.
  • Is it to stop the high level of turnover in your company ?  You will be changing to a more team-focused environment which might seriously change the way Project Management or even H.R. does things.  For this also, you will need to explain your changes to help you get support.

I could think of many other reasons.  You should have your OWN reasons.

If you started an adoption or transformation a while back, it’s a good idea to restate this every once in a while (if even for yourself).  It will remind you why you are continuing to improve and learn every iteration.

Asking yourself once in a while will also allow you to improve your message which will likely change slightly over time as the market and your environment changes.

Please, go home TONIGHT and ask yourself WHY are we transitioning or continuing to work towards being more agile.  You will need to answer this for others more than once as you continue on your journey.

If the answer to yourself is “this is our last chance to make sure we don’t disappear as a company”, that revelation is a good one as well, and you will know why you need to stand strong on the changes you are making.  Either way, it all starts with the same question.

Please make sure you always know the answer to the question “Why?“.

References:

OpenAgile, Growth Facilitator
XP (Extreme Programming)
SCRUM
Kanban, Lean

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Agile Transformation and the Chasm

In his book “Crossing the Chasm“, Geoffrey Moore describes the difficulty of creating a popular new product due to a conceptual “chasm” between the first people who adopt a new product and those who come later.  He describes five types of people in relation to how they adopt new products:

  • Innovators – always actively seeking out and trying cutting edge new products.
  • Early Adopters – excited to try new things, but after the worst “bugs” have been removed.
  • Then there is the Chasm – many products fail here.
  • Early Majority – willing to try new things but need strong testimonials or real-world proof.
  • Late Majority – require time-tested proof before they will adopt a product.
  • Laggards – resistant to change and hesitant to adopt anything without strong personal incentives.

This product adoption behavior also applies to new ideas in general, and of course, to Agile Transformation [Agile Transformation vs. Agile Adoption] in particular.

Implications of the “Chasm” Model

An organization attempting to do an Agile Transformation [Kotter's 8-Step Change Model] should understand how to use this model to ensure long-term success.  This diagram illustrates the concepts (click on it to see it full size):

First, the organization should start the transformation by finding the innovators and early adopters.  These people can then be recruited to run the initial pilot projects.  They will be enthusiastic and will typically adapt themselves to the new behaviors and thinking patterns required by Agility.  If they are properly supported by managers, they will also be successful – at least within the bounds of a limited pilot environment.  Success here will mean that the pilot projects deliver value, use feedback effectively, and the participants (team members and stakeholders) will be happy with the results.

In this stage, it is best to avoid putting people on the teams who are from the early majority, late majority or laggards groups.  These people will tend to drag on the results of the pilot projects.  This is a common mistake in running a pilot program and leads to discouraging results.  One way to help filter between these two groups is simply to ask for volunteers for the pilot projects.  Innovators and early adopters will be much more likely to volunteer for a new initiative.

After the pilot projects have shown some good results, the next step is to go the general roll-out.  In this step, you are now working with the early and late majority.  These people need much more substantial support for a change of this nature.  They will require intensive training, and hand-holding in the form of coaching and mentoring.  This hand-holding can come partially from your innovators and early adopters.  Some of the participants in the pilot projects will have the desire to share their success.  From these, you need to carefully select and prepare a few who will act as internal coaches.  If you are a small organization or if you wish to do your transformation quickly, you will likely need to hire coaches from outside your organization as well.

The early and late majority require evidence of benefits and reassurance that risks are minimal or can be mitigated.  This evidence partially comes from your pilot projects.  However, this may not be sufficient.  There are two other important sources of evidence for this group: the leadership team and external experts.

The leadership team must be committed to the change to agility and can demonstrate this commitment by doing their own management work as an agile team.  The exact details of the agile process do not need to be identical to that of the staff teams, but it should be recognizably similar.  As well, this “Agile Transformation Team” must make itself very visible during the general roll-out.  This can be done with communication and by taking up visible residence in a central conference room or bullpen.  As well, this Agile Transformation Team must work diligently to remove obstacles that are raised by staff teams during the general roll-out.

The second source of evidence comes from external sources.  Published case studies are one valuable source.  However, there is a huge value in a visible management investment in external support from recognized experts.  This can be in the form of training, coaching, consulting as well as informal “lunch-and-learn” meetings, town hall meetings and the like.  When engaging experts, it is imperative that the Agile Transformation Team act on their advice otherwise the early and late majority will take that as a sign of hypocrisy.

The final stage of a roll-out is to deal with the laggards.  For the most part this is a do-or-die proposition for these people.  Either get with the program and engage like a committed employee or leave the organization.  If your organization is large enough, you will likely have observed some of these people leaving the organization in the general roll-out.

For some organizations, this transformation process can take many years.  An organization with thousands of people should expect to be working on the pilot projects for at least a year, the general roll-out for at least three years.  Often it will be longer.  Good luck on your agile transformation effort!

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Reader Survey: Important Topics for an “Agile for Managers” Workshop

Hi Everyone,

We have started putting together a list of topics / learning objectives for a new course: “Agile for Managers”. I am interested in getting suggestions from readers on topics to include. What are the challenges you have had with managing agile teams? If you are on an agile team, what are some of the challenges you have had with management? What are the burning questions you have as a manager about deciding to use agile methods? What have been some of the critical success factors in adopting agile methods? What about pitfalls?

I will summarize feedback in a future article as well as post a proposed agenda for such a workshop. In order to “give back”, I will also make the initial draft of the course materials available under a Creative Commons license so that others can use the materials.

I look forward to hearing your thoughts!

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All you need is a bit of patience. Just be consistent in your message.

As many who have tried know, an Agile Transformation in a company is not always an easy process.  Although most people at first are keen to participate in the idea of “changing” the company culture and working environment to “something better”, many do not realize how much work it can actually be.

For some of you, you will be fortunate enough to be in an “Agile” environment already.

Perhaps you are using OpenAgile, or Scrum. You may be using a unique variation such as the Pomodoro technique.

For those of you that are new to the idea of Agile Processes, no matter what your flavor of framework or tool, there is something you will not be able to avoid.  Politics.

There is no getting around this.  Agile transformations are about change in an organization and not just change in one small section of the company.

Although many Agile teams start as “pilot projects”, even in such small situations, the effect on the departments or culture at the “edges” of even the smallest teams can start to cause ripple effects in an organization.

The first secret is to acknowledge and accept that this is going to happen.  Life will be easier for you this way. The job of any one assisting with an Agile implementation is to provide honest information and advice to help those who will be directly or indirectly impacted.

Don’t think you will be able to just hide in development and not be noticed.  Be prepared with slides, web site links, and open to talking about your processes and ideas with anyone who wants to know.  You must be transparent and open about what you are trying to accomplish.

OpenAgile for instance is defined as a “Learning System” because it deals with the realities that no one can work in a bubble and that more than just the “development team” needs to be involved in Agile practices for them to work.  The entire organization will be learning with you.

Scrum has a well defined set of guidelines to follow in regards to the development process and is ideal for new software development projects.

Lean is a more gentle approach to changing an organization in small, progressive steps.

Don’t kid yourself.  No matter how small the changes will be, there will be resistance from someone, somewhere, from where you least expected it.

The important thing to remember is what your goals are. The goal of the framework is an open and honest discussion between all those involved in your organization and general culture shift to a blameless, team based shift in thinking.

However, what is the real goal here? Happy customers, happy employees, and therefore, a profitable, progressive organization.  You must remember the purpose is not to make teams, but to make a good product for the customer. Sometimes, you may find it hard to remember.

I recently read The Wisdom of Teams: Creating the High-Performance Organization (Collins Business Essentials) by Jon R. Katzenbach and Douglas K. Smith. It clearly explains, with examples, how an organization with the courage to change their culture can really benefit from an overall culture shift towards Consultatative Decision-Making and team work based approaches.

Consistently, companies who simply “say” they have teams under-perform those that actually “just have teams”.  One type of company has them by edict or decree, and the other just has them because the culture is that way.  The ones with the naturally team based cultures do much better financially. Hmm..interesting.

Change is usually started by some kind of need to change because things aren’t working out “the old way”.

Buggy software, unhappy customers, late releases…Whatever the pain, the results are always a “desire to change”.

Those who have the courage to admit they need to change, should be applauded.  If you are new to Agile and reading this, please pat yourselves on the back for having the courage to learn more.

Now, it should be “easy” to stay on the path if you keep at it.  The act of Starting is the first big step. Congratulations!

One thing you will find as you proceed is a continual list of “it won’t work because of this”, “it won’t work because of that”.  But, hey, you’re not selling snake oil here.  You’re talking about people in an organization taking control of their work and working together for the best solution possible for the company and it’s customers.  Keep it simple.

Agile processes are just that … Processes..  They are not there to replace common sense. Agile is not a silver bullet to cure a company’s culture.  That part of things is still a human thing and will take time.  Please don’t think of Agile as a cure for a bad culture.  It is simply a way to help the culture to change.

To me at least, what is important is a consistent message.  I believe this is the key to helping an organization to be an Agile one.

Let’s take the Daily Scrum (for Scrum teams).   I worked with a company where the Daily Scrum was considered a waste of time and a nuisance for those involved (at first).

The daily scrum is a quick recap of where everyone on the team is.  For more information about the Daily Scrum, just do a quick search.  There is an abundance of information about it.  Try the Scrum Alliance for definitive information.

At this company, the owners and senior managers considered the scrum to be a nuisance. The senior developer of the team found it to be a hassle.  Then, after a few weeks of doing daily scrums, any team member could be asked by someone passing in the hall what was going on and that person could easily tell them what the status of the project was.  There are many other advantages to the scrum, but that’s not what this article is about. Maybe another time.

When I first started at this company, there was a weekly “developer meeting” which at first was the only way to exchange information.  It was generally 2 hours/week.  The team was now doing daily scrums and having small “mini-chats” (for lack of a better word) occasionally when needed.  Team members knew from the Scrums what was going on and who needed help with what and then self-organized to solve their problems and arranged “mini-chats” as needed to help each other out.

The “weekly 2 hour developer meeting” just became a thing of the past.  The team just stopped having them.

Waiting until the end of the week was far too cumbersome for something they could get from a 10 minute scrum and occasional “mini-chats”.  The team had unknowingly switched into a mode where they practiced regular consultative decision-making and regular re-assessment of their situation.

Then a remarkable thing happened.

One day, I was in a meeting, and the senior developer who at first was reluctant, banged on the window of the board room I was sitting in for me to come to the 10:00 AM Scrum which was 2 minutes away. I excused myself from the meeting and returned approx. 13 minutes later. The owner of the company said “Why do you do those daily meetings.  They are such a waste of time.  You have that big Developer Meeting every Friday”.

My response was “I’m sorry, but we don’t need to waste our time with that big 2 hour meeting every Friday anymore… We haven’t needed them for a few cycles now”.

What a remarkable experience!  In one quick step, and after considerable pain, not only was it evident that the senior developer embraced the Agile Scrum Meeting, but also the owner who was previously unsure suddenly came to realize that the team was far more effective than he knew and he hadn’t even noticed the shift.

The developer culture had changed to a more team based one without his knowing. All team members knew what was happening and Expected to be kept in the loop from now on.

The key is, keep doing it ! Be consistent.  If you’ve implemented a standard Agile practice, stick with it.

Be realistic though. There will be people who consider it to be “stupid” and there will be people who don’t want to participate.  As a new implementor, NEVER humiliate anyone in the process.  Simply encourage open discussion and ask everyone to contribute.  At first, people will be shy or nervous about this.  Over time, it will be the norm to participate.

The point is that as time passes, people and things change. The new processes will become Common Place and not so foreign and people will start to appreciate the fact their opinions are important and they have an impact on the bottom line of the company and the customer.  This is what drives people to be happy and succeed.

Then, with a bit of luck and perseverance, someone in a different department will say “Hey, I think that seems like a good idea. Tell me more”. “Do you think this Agile stuff might work in sales?” might be the kind of question you suddenly receive.  Do yourself a favor and be prepared for this with some links to a few Agile Methodologies at-hand!

This is your opportunity to introduce the new “culture” into a different part of the company.

With a bit of patience, others will come on board.  It will be a great experience for you once you have others helping out.

The day will come when someone will try and remove an Agile process somewhere in the organization and team members will lobby for their cause.  This is the day you will know…  I have succeeded with step 1… Getting started !

From here forward, it’s just a matter of consistently trying to improve things one cycle or iteration at a time, and watching things get better for the customers, employees, and of course, the stakeholders.

If I can give one last bit of advice.  Please do a bit of research before implementing something.  Ideally, you want the teams to come up with how to do their daily work, not yourself.  Let any process be the team’s process, not yours. Of course, if you have a new team to Agile, you will need to help them get started.

Consider your job as one of just guidance and coaching. That will work the best.

Review your environment carefully before deciding about methodology and do some reading or contact a coach about the differences. Should you be using Scrum, OpenAgile, XP, Lean, etc? Think about it carefully.  They have different levels of organizational change and are for different applications.  Use Wisely. :->

If you’re courageous enough and have an experienced Agile team, why not ask the team which Agile Methodology will work best for them?  I personally enjoy learning something new all the time. :->

Mike Caspar, CSM, OpenAgile Certificate Holder, ATPL

http://mike-caspar.blogspot.com

References :

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Assessing an Organization for an Agile Transformation Plan

Myself, Paul Heidema and a few other people we work with have now participated in several assessments of organizations who are either looking at adopting agile methods or improving existing use of agile methods. We have developed several tools for running these assessments. The following things are critical to the assessment process and the results we get:

Culture

The success of an agile transformation is primarily driven by connection that transformation makes with the existing culture of the organization. We know that doing an agile transformation includes cultural changes. The critical piece is understanding the culture so that you can determine what in the culture supports agility and what in the culture is going to hinder agility. A culture that focuses on individual accomplishment and freedom will not support agility well, while a culture that supports doing the best possible thing for customers will support agility. Of course, any given organization will have a mix of cultural aspects that both support and hinder agility. There are a number of methods for examining culture including an excellent corporate culture workshop described in the book “The Corporate Culture Survival Guide” by Edgar Schein.

Value Stream Mapping

A high level value stream map is an excellent tool for identifying both an overall need for improvement by making the current state of affairs visible, as well as pinpointing where big improvements can be made quickly. More often than not, when we do an assessment for an organization, we are finding that the efficiency of their process is at about 20-30%… in other words, 70-80% of all effort is expended on wasteful activities. This level of waste is often surprising for stakeholders. And of course, making that level of waste visible is a large motivator for the kind of continuous improvement that agile methods such as OpenAgile and Scrum make possible.

Agile Practices

Of course, even if an organization is not doing agile officially, there are often existing practices that can be considered part of the overall umbrella of agile. A comprehensive assessment that rates a team’s or an organization’s level of use of agile practices gives a good picture at a very practical level of what things you can build upon. For change to be successful, a significant factor is to tie new practices to existing practices. This is a great way to do this. There are lots of lists available of agile practices. We publish one fairly comprehensive list of agile practices on the Berteig Consulting site (it’s near the bottom of the linked page).

There are of course many other things that are done during an assessment, but these three form an effective foundation for any agile transformation plan.

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Calculating a Budget for an Agile Project in Six Easy Steps

A former student of mine called the other day.  He asked a good question: how do you calculate the budget for a project if you are using an agile approach to delivery.  Here is the overview of the six steps to do this.  I will follow the overview with some detailed comments.

  1. Prepare and estimate the project requirements using Planning Poker
  2. Determine the team’s Velocity
  3. Using the team’s burn rate and velocity calculate the budget for the Iterations
  4. Add any capital costs
  5. Using the definition of “done” add pre- and post- Iteration budgets
  6. Apply a drag or fudge or risk factor to the overall estimate

Prepare and estimate the project requirements using Planning Poker

The project requirements have to be listed out in some order and then estimated.  If you are using Scrum as your agile approach, you will be creating a Product Backlog.  Extreme Programming and you will be creating user stories.  OpenAgile and you will be creating Value Drivers.  Kanban and you will have a backlog of work in progress.  Regardless of the agile approach you are using, in a project context you can estimate the work using the Planning Poker game.  Once you have your list, you need to get the team of people who will be working on the list to do the estimation.  Estimation for agile methods cannot be done by someone not on the team – this is considered invalid.  It’s like asking your work buddy to estimate how much time it will take to clean your own house and then telling your kids that they have to do it in that amount of time.  In other words, it’s unfair.  Planning Poker results in scores being assigned to each item of your list.  Those scores are not yet attached to time – they simply represent the relative effort of each of the items.  To connect the scores to time, we move to the next step…

Determine the team’s Velocity

The team needs to select its cycle (sprint, iteration) length.  For software projects, this is usually one or two weeks, and more rarely three or four weeks.  In other industries it may be substantially different.  I have seen cycles as short as 12 hours (24/7 mining environment) and as long as 3 months (volunteer community organization).  Once the duration of the cycle is determined, the team can use a simple method to estimate how much work they will accomplish in a cycle.  Looking at the list of work to be done, the team starts at the top item and gradually working their way down, decide what can fit (cumulatively) into their very first cycle.  Verbally, the conversation will go something like this:

“Can we all agree that we can fit the first item into our first cycle?”

- everyone responds “Yes”

“Let’s look at the second item.  Can we do the first item AND the second item in our first cycle?”

- a little discussion about what it might take to do the second item, and then everyone responds “Yes”

“Okay.  What about adding the third item?”

- more discussion, some initial concern, and finally everyone agrees that it too can fit

“How about adding the fourth item?”

- much more concern, with one individually clearly stating “I don’t think we can add it.”

“Okay.  Let’s stop with just the first three.”

Those items chosen in this way represent a certain number of points (you add up the scores from the Planning Poker game).  The number of points that the team thinks it can do in a cycle is referred to as its “Planning Velocity” or just “Velocity”.  With the velocity, we can then do one of the most important calculations in doing a budget…

Using the team’s burn rate and velocity calculate the budget for the Iterations

The team’s velocity is a proxy for how much work the team will get done in a cycle.  However, in order to understand a budget for the overall project, we need to take that estimate of the team’s output and divide it into the total amount of work.  Our list has scores on all the items.  Sum up the scores, then divide by the velocity to give you the number of cycles of work the team will need to complete the list.  For example, if after doing Planning Poker, the sum total of all the scores on all the items is 1000, and the team’s velocity is 50, then 1000 ÷ 50 = 20… This is the time budget for the team’s work to deliver these items.    To do dollar budgeting, you also need to know the team’s burn rate: how much does it cost to run the team for a cycle.  This is usually calculated based on the fully-loaded cost of a full-time-employee and you can often get this number from someone in finance or from a manager (sometimes you can figure it out from publicly available financial data).  In general, for knowledge workers, the fully-loaded cost of a full time employee is in the range of $100000/yr to $150000/yr.  Convert that to a per-cycle, per-person cost (e.g. $120000/yr ÷ 52 weeks/year x 2 weeks/cycle = $4615/person/cycle) and then multiply by the number of people on the team (e.g. $4615 x 7 people = $32305/cycle).  Finally, multiply the per-cycle cost by the number of cycles (e.g. $32305 x 20 cycles = $646100).

This is the budget for the part of the project done in the cycles by the agile team.   But of course, there are also other costs to be accounted.

Add any capital costs

Not many projects are solely labor costs.  Equipment purchases, supplies, tools, or larger items such as infrastructure, land or vehicles may all be required for your project.  Most agile methods do not provide specific guidance on how to account for these items since agile methods stem from software development where these costs tend to be minimal relative to labor costs.  However, as a Project Manager making a budget estimate, you need to check with the team (after the Planning Poker game) to determine if they know of any large purchases required for the completion of the project.  Be clear to them what you mean by “large” – in an agile environment, this is anything that has a cost similar to or more than the labor cost of a cycle (remember: agile projects should last at least several cycles so this is a relatively small percentage of the labor costs).  In the previous example calculation, the cost per cycle was $32305 so  you might ask them about any purchases that will be $30k or larger.  Add these to the project budget.

Using the definition of “done” add pre- and post- Iteration budgets

Every agile team is supposed to be “cross-functional” but in reality, there are limits to this.  For example, in most software project environments, teams do not include full-time lawyers.  This limited cross-functionality determines what the team is capable of delivering in each cycle – anything outside the team’s expertise is usually done as either pre-work or after the iterations (cycles) are finished.  Sometimes, this work can be done concurrently with the team.  In order to understand this work, it is often valuable to draw an organization-wide value stream map for project delivery.  This map will show you the proportion of time spent for each type of work in the project.  Subtract out all the work that will be done inside the agile team (their definition of “done”) and you are left with a proportion of work that must be done outside the agile team.  Based on the proportions found in the value stream map, add an appropriate amount of budget based on the project’s cycle labor costs.

Apply a drag or fudge or risk factor to the overall estimate

And of course, to come up with a final estimate, add some amount based on risk or uncertainty (never subtract!)  Generally speaking, before this step, your project budget is going to be +/- 20%-50% depending on how much you have used this approach in the past.  If you are familiar with it and have used it on a few projects, your team will be much better at understanding their initial velocity which is the foundation for much of the remaining budget estimates.  On the other hand, if you are using this method for the first time, there is a high degree of anxiety and uncertainty around the estimation process.  Please feel free to add a buffer that you feel is appropriate.  But again, never, ever, ever remove time or money from the budget at this last step.

Please let me know if you have any comments on how you have done this – tips, tricks or techniques are always welcome in the comments.

Thanks, Mishkin.

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Quick Reference: Kotter’s 8-Step Change Model

This model is good for people to consider when doing an Agile-Lean Transformation.  I use a process based on this model when working with clients, although the reality of work on the ground often means not following this model perfectly.  Without further ado, here is the model:

Step One: Create Urgency

What is the critical reason for change?  What is the “burning platform”?  What reason can people get behind emotionally for the pain of change?  Why are you considering agile and lean, and how is it urgent to use these methods?

Step Two: Form a Powerful Coalition

I call this as the Agile-Lean Transformation Team.  These people are usually managers and executives who can make change happen by virtue of budgets and positional authority.  They help with training, coaching, team formation, ongoing assessment, planning etc.

Step Three: Create a Vision for Change

The coalition creates a strongly worded statement that helps everyone see how they fit into the change process and results.  Tie the use of Agile-Lean to the end result.

Step Four: Communicate the Vision

Constantly!  Every opportunity, repeat the statement, discuss its application and implication.  Use both formal and informal methods.  Share links to information about Agile and Lean, create an elevator pitch and use it constantly.

Step Five: Remove Obstacles

The coalition supports staff who are struggling with how to make the change real in practical terms.  For example, an agile team might want a proper team room.  The lack of such a room is an obstacle to be removed by the coalition.

Step Six: Create Short-Term Wins

Choose places to focus effort that will be successful pilot projects.  Make sure that successes are broadly communicated.

Step Seven: Build on the Change

Make sure to have a backlog of projects to do using Agile-Lean, and make sure that as you go you are improving your use of Agile-Lean.  It takes time to break down old habits.

Step Eight: Anchor the Changes in Corporate Culture

Ensure that new staff are immediately and effectively educated on the use of Agile-Lean, and ensure that Agile-Lean continues to pervade the thinking and behavior of people throughout the organization (not just IT!!!).

(NOTE: this is based on the book “Leading Change” by Kotter, and a web page about this model.)

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Stonecutters, Paycheck Earners, or Cathedral Builders?

All credit for this is due to Mary Poppendieck as this is entirely cribbed from her Agile2007 talk on agile leadership.

A man walks into a quarry and sees three people with pickaxes. He walks up to the first one and asks, “What are you doing?” The first quarry worker irritably replies, “I’m cutting stone, what does it look like? I cut stone today, I cut stone yesterday, and I will cut stone tomorrow!” The man asks the same of the second person who replies, “I’m making a living for my family.” The man turns to the third person and asks him, “so what are you doing here?” The third worker looks up for a moment, looks back at the man with a proud expression and says, “I’m building a Cathedral!”

The moral of the parable is likely clear, but it bears applying to organizational dynamics. Basically, consider that everyone gets annoyed with aspects of their jobs. The question is one of response. Basically, if a person is annoyed with his job, does he:

  • Complain? He is probably a stonecutter.
  • Ignore it? He is probably a paycheque earner.
  • Fix it? He is a cathedral builder.

Cathedral builders are absolutely critical to a healthy organization. They push the organization towards a vision, often propagating the high-level vision throughout all levels of the organization. Unfortunately, these are also people who annoy the stonecutters and paycheque earners, because they won’t participate in the complaints, and they agitate for changes which make it hard to ignore things and just “do the job.” But your success will rely on them… find them, shelter them, and grow them. And whatever you do, don’t “promote” them into positions where they aren’t effective. Empower them, and if you need to add salary and title that’s fine, but let them find their own area of maximal contribution. Guaranteed you, Mr. business owner, aren’t smart enough to see what that is.

Organizations that fail to see this remain mediocre or failing organizations. Organizations that find ways of harnessing their workforce and coaxing people into the next level of engagement, succeed.

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Announcing: The Agile Clinic Service

Berteig Consulting with the help of some partners is now offering a new service called The Agile Clinic. This is not a typical coaching or training session. The entire clinic has a duration of just one day. During this day there are short 30 or 60 minute appointments made by managers, executives, and staff with two experienced agile coaches. These coaches listen to problems presented to them, consult, discover, facilitate, diagnose, and offer solutions. These appointments are designed to be intense and high-impact sessions. Visit www.agileclinic.com to see how this service can add great value and provide fantastic results to your company with a small time cost.

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Comprehensive List of Agile Practices

This might be impossible, but I was thinking that it would be cool to have a single reference of all the possible agile practices.  Obviously, since “agile” is not a single defined method, we must take the word “comprehensive” with a bit of humor (or a grain of salt).  I’ve attached a spreadsheet that represents my first draft (it’s in OpenOffice.org format so that you don’t have to worry about me spreading viruses – if you want it in MS Office format, email me at mishkin@berteigconsulting.com).  I’ve split the practices up into several sections including: “Agile Skeleton”, “Common Practices”, “Basic Scrum Practices”, “Optional Scrum Practices”, “Extreme Programming Practices” and “Lean Practices”.  I’ve stopped there because I’m not an expert on other agile methods such as Crystal, Agile Unified Process or Feature Driven Development.  I imagine that this list will be useful for teams to do self-assessment and to think about ways they might improve.  Perhaps it could be used in a retrospective setting.  Berteig Consulting coaches use something similar to this to assess the effectiveness of their engagement with clients.  If you think of practices I’ve missed or other potential uses for a list like this, let me know in the comments.  My intention is to convert this to a wiki and make it available under a Creative Commons license once it is a little more refined.

Agile Practices List (OpenOffice format – 68KB)

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Flow or Iterations – What Do You Try First?

There was an interesting discussion on the LeanAgileScrum Yahoo Group early in December regarding the difference between flow (lean) and iterations (agile) that caught my eye. I only just now have had the time to write about it.

Continue reading

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Agile Blogs

There’s a great discussion on the Extreme Programming Yahoo! group where a whole bunch of folks list their blogs out. If you aren’t part of the group, you should probably join it (it focuses on technical practices, and there’s lots of other good agile stuff there too). The discussion starts with a message from James Carr where he asks who else here blogs?

It’s probably still cool to jump in with your own blog link if you have an agile-focused blog (I’m sure Scrum, Lean and other agile methods would be welcome even though it’s an extreme programming list!)

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Patterns of Agile Adoption by Mike Cohn

Mike Cohn has written an excellent article that covers a number of different options that can be taken when someone in an organization desires to implement an agile method.  These Patterns of Agile Adoptions are described as three sets of contrasting options:

  1. Start Small vs. Go All In
  2. Technical Practices First vs. Iterations First
  3. Stealth Mode vs. Public Display
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