Scrum Guide 2013 is Here!

-- Honored Guest Blogger Ken Schwaber

Jeff and I have been working on the next revisions to the Scrum Guide. We will be presenting a webinar about it within a month or so. We'll post the details soon.

We first presented and published Scrum in 1995 at an OOPSLA conference in Tampa, Florida. Almost twenty years have passed. Agile and Scrum have succeeded far beyond our expectations. Actually, we never had expectations beyond using Scrum for ourselves, so anything more was easy.

Between 1995 and the publication of the Agile Manifesto in 2001, Mike Beedle, Martine Devos, Mike Cohn, Deborah Stenner, Tonya Horton, Will Smith, and Alan Buffington all moved Scrum forward, using it and helping us refine it.

After 2001, I started holding Scrum training classes, first called Scrum, then Scrum Master, then Certified Scrum Master classes. Some of the people in those classes had epiphanies. They wanted to help spread Scrum through training and consulting. Some of them (and certainly not all) are Jens Ostergaard, Bob Schatz, Clinton Keith, Boris Gloger, Kane Mar, Peter Borsella, Roman Pichler, Pete Deemer, Will Menner, Gabrielle Benefield, Jim York, the whole group at Citerus in Upsula, Sweden, Alan Shalloway, Michael Vizdos, Hubert Smits, Jean Tabaka and many, many others.

All of us should admire these people. When they started, waterfall was the norm.  Scrum was viewed as inadequate and full of holes. These pioneers were often insulted, called fools and stupid, accused of spreading ideas that would hurt customers, and worse. They spoke at conferences and held classes, most to very small audiences. Even then, most of their time was spent answering waterfall vs Scrum arguments.

I thank them for seeing the light, taking the risk, and improving our profession alongside Jeff and myself, and the rest of us in the agile movement.

Update 2013: Agile 2008 - Money For Nothing

Update 2013: The Money for Nothing and Your Change for Free strategy has been widely deployed as the basis of most agile contracts. See the Money for Nothing and Change for Free patterns at ScrumPlop.org.

Scrum was designed for hyperproductive teams. If you can run at 5-10x your competitors velocity and quality you should generate 5-10x more revenue. Why do so few great Agile teams do this? Their business model sucks!

You got to watch how they do it on MTV. Otherwise you will be pushing refrigerators for the rest of your life. Money for Nothing and Your Change for Free was the theme of my presentation at Agile 2008. The right method of Agile contracting can double, triple, or quadruple your margins. Get rid of hourly billing. It just keeps you on the treadmill!

Gerry Kirk has a good writeup of my Agile 2008 presentation on his blog.

Money For Nothing: Deliver More Value For Your Client (And You)
Written by gerrykirk on August 19, 2008 – 3:19 pm

These are notes from Jeff Sutherland’s Agile 2008 presentation “Money For Nothing and Your Change For Free: Agile Contracts“. Jeff summarized his talk in this way:

“The “Money for Nothing” strategy works when customers want fixed price estimates for the entire contract up front. The Agile contract allows termination of the contract early when the value of features drops below an ROI criteria. The contract allows the customer to save 80% of their remaining funds by giving the Agile vendor 20% of the remaining contract value in return driving the margins of an Agile contractor from 15-20% up to 50-80%.”

From Scrum Butt to High Performing Team

Jeff began his presentation by talking about the Nokia Test For Scrum Certification, which Nokia uses to measure their team’s level of agility (see questions and scoring method in slide show below). Jeff had everyone in the room score their own team. I rated people in general at a 5 out of 10, which is just above the starting average. Anything 8 and under is in the ScrumButt category.

Why is this important? Teams that score high tend to be the high performing teams. They also generate much higher revenues, based on Jeff’s analysis:

* Great Scrum: 400% revenue increase
* Good Scrum: 300%
* Pretty good Scrum: 150% - 200%
* ScrumButt: 0 - 35%

Jeff also compared agile to waterfall teams, suggesting high performing agile teams can outperform waterfall teams by a 5-6x margin. The problem is, contracts that are time and materials don’t reward high performance. T&M is low risk and low margin, you only get paid for the hours you put in, even when you take far less time than your competitors. Fixed price contracts aren’t any better, with vendors trying to out-discount each other. Many vendors only making money if the project is late and over budget due to change requests and building functionality that users do not want.

Outsourcing: Scrum Best Practices

Outsourcing has long been a tool for reducing costs. Scrum changes the economics of outsourcing and helps build a strong business case for keeping development at home. If you can achieve an eighty-fold improvement in velocity with corresponding quality, why would you spend a shipload of money to set up shop in a country where labor costs are just 70% lower? However, outsourcing is a reality of the global economy and companies are going to do it. So, if you’re going to do it, don’t suck. 

Configure Your Team

Scrum has three different distribution models: isolated, overlapping and integrated. The variable in choosing the best model for your company is communication. How much will the remote teams need to coordinate with head quarters? 

Isolated Teams: In this set-up, the remote team has all the same characteristics as a functional Scrum Team. It self-organizes, is self-managed with a Scrum Master and Product owner and has all the skill sets necessary to deliver product every Sprint. What it doesn’t have is a 

relationship with the mother ship. 

There are plenty of projects where an isolated model can be used but if any part of the organization needs to coordinate with the isolated team, this set-up could be a recipe for disaster. Isolating teams often creates impediments that result in constraints, delays and bugs.  

Networked Cross Functional Teams: If project coordination is necessary, a better model is networked teams. In this configuration, individual teams still have their own responsibilities but they are networked through a Scrum of Scrums and are working from the same Backlog. This means that a Chief Product Owner is meeting as often as necessary with Scrum Masters from the remote teams. Also, all developers and designers should feel comfortable talking across teams to insure smooth integration.

Integrated Scrum Teams: The best distribution model for Scrum is to integrate individual team members in multiple locations. Integrated Scrum Teams work from the same Sprint and Product Backlog. The best practice is to have roughly half the team in one location and the other half in another so they are forced to work together across time zones and geography. It is also important to allow teams to form and gel like co-located teams. Bringing the two halves of the team together for the first few Sprints can facilitate this process.

Communicate

Distribution creates communication and coordination problems but well-designed Daily Scrum meetings and high-bandwidth tools can help close the communication gap. In the beginning bring the teams together for a few sprint so they can find a rhythm, videoconference a lot and use cloud-based tools that the entire organization knows how to operate. 

Using the right configuration and tools can really improve productivity and quality of work. Scrum Inc. has helped a number of organizations achieve great results with distributed teams. However, we still recommend only outsourcing when you are looking for a skill set that isn’t readily available in your home market or if the company plans to operate in the market they are outsourcing to.