Rini van Solingen and Rob van Lanen wrote Scrum for Managers, a book providing answers for organizations that want to or are adopting Scrum.
You can download a preview of Scrum for Managers to get an impression of this book.
InfoQ interviewed van Solingen and van Lanen about how agile with Scrum impacts KPIs, what managers can do to give teams enough space to self-organize and find their own way of working, their view on tailoring Scrum to the specific needs of an organization, the possible ROI of implementing Scrum and how to measure ROI, increasing productivity with Scrum, defining teams and anchoring Scrum in the organizational structure and systems, and coordination between product owners when Scrum is scaled.
InfoQ: Why did you write this book?
Van Solingen: We are passionately involved in introducing and training agility on a daily basis. For us, Scrum is an excellent first step towards high effectiveness and responsiveness to customer needs. In the last years, we found that support and vision of management is essential in achieving this. It is necessary for management to fully comprehend Scrum and help the Scrum teams to be successful. We are completely convinced that high agility and responsiveness will make the difference the coming decades. Being able to react fast to changing conditions will be the factor that decides which companies will survive and which won't. In an ever-changing, fast and increasingly small world, survival of the fittest is the norm.
Van Lanen: We have found that, in our work as consultants, the role of the manager in this transition is key in order for the transition to succeed. Managers can help and certainly also impede the success of the transition. The awareness of what helps and what does not help is missing very often. We also got a lot of questions from managers in trainings and consultancy engagements on their role in the change towards more agility. We therefore decided to answer the most important ones in the book.
InfoQ: Organizations can use KPIs to manage work for reaching their goals. What if they adopt agile with Scrum, how will that impact their KPIs?
Van Lanen: KPIs can definitely help, if they are used to monitor the progress towards the goals the organization has set. And if the goals are there to measure the progress towards the vision the organization has. And that the vision has been set in the light of the purpose of the organization. And that the purpose of the organization is known throughout the organization. But I guess I’m ranting a bit now.
Van Solingen: Given the preconditions set above by Rob, KPIs are very helpful in measuring the performance of the organization. Especially outcome-based KPI’s such as Time-to-Market and Customer Satisfaction (NPS). If your organization is more agile and responsive, your customers will notice it. If you your organization is not, your customer will also notice it. The key here is to find out what the true value of your organization is and what KPIs will help in measuring the performance. But in the end there is one KPI that will prevail and that is the value you create for your customers.
InfoQ: Scrum impacts the role of managers. What can managers do to give teams enough space to self-organize and find their own way of working, while still keeping control?
Van Solingen: The question is if they have control in the traditional way of working. I doubt that. But in a one-liner: managers should steer based on working and tested results that are truly finished by the team and you need to create an environment that makes it possible for them. In short: steer on the outcome and output, and let the teams figure out how to create and improve those outcomes.
Van Lanen: Scrum teams deliver a working and tested result every Sprint. So they don't just deliver the end result after a year, but a small extra step every month or less. But remember, they only deliver results that are truly finished! This expands your ability to steer so greatly that using a process of control loses much of its importance. Therefore, this can, for the most part, be done by the Scrum teams themselves. At the same time, it's essential that teams continuously improve. This is the critically important role that the manager plays: Helping the team improve by removing obstacles for them. You help create an environment that the Scrum team can work in. This means you should hold yourself back from intervening too much. Explain the set of rules they should follow and why they should follow them, and allow the team to organize itself within this set of rules.
InfoQ: What's your view on tailoring Scrum to the specific needs of an organization? Should organizations do it, and if so, how can they do it?
Van Solingen & Van Lanen: If it makes sense, yes. But for novices it is hard to determine if it makes sense to tailor. Let’s assume I would like to lose weight and I have a fitness plan from my instructor in order to be more agile, in a personal context. How well are my chances if I change the plan before I have tried it for a few months? That being said, if your organization is better off with doing only a part of the practices in Scrum, why not? Just do not call it Scrum, as a true execution of Scrum lies in the synergy of doing it completely. Partial implementations hardly make you agile and responsive. So, our recommendation would not to tailor at first but go by the book and learn its power. But have said that, in the end it is your organization. If it makes sense for you and it helps you survive and prosper, how can that be bad?
InfoQ: Can you elaborate on the possible ROI of implementing Scrum?
Van Solingen: David Rico investigates ROI based on publications and uses this to build simulation models. His results show positive results as he published a 1:7 ROI for Scrum, 1:19 for Agile, and 1:32 for Extreme Programming (sometimes in combination with Scrum). These predictions are still only indicative but they do look promising. Having something concrete always beats having nothing. The Standish Group published data showing that the success chances of projects are three times higher than waterfall projects, and the chance of a failing project is three times lower than with waterfall. Depending on your organization, these figures can be used to calculate indicators of the true ROI. Jeff Sutherland (the co-creator of Scrum) has said he believes a ROI of 10 to be realistic and a budget of 400,000 dollars to be a sufficient starting point for a department of 60 people to gain 4 million on that investment.
InfoQ: Do you have suggestions how organizations can measure the ROI of Scrum?
Van Lanen: Our own experiences match the above viewpoints. Hard data may be lacking, but in our experience, the general ROI is in the order of magnitude of 1:10. Therefore, assume a budget of approximately $7,500 per employee in costs for training, guidance, and coaching. Based on the expected ROI of 1:10, a return of about $75,000 per team member per year is a realistic expectation. Important to note: You don't need to spend the entire budget before you start reaping the rewards! Straight from the first Sprint, the positive results will start to appear.
InfoQ: In your book you mentioned that with Scrum a tenfold increase in productivity can be easily achieved and that a twentyfold increase is possible. Can you give examples of organizations that have realized this, how does Scrum help them to do it?
Van Solingen: We have seen organizations really be way more productive. Imagine if you are crawling a marathon. Your record time dramatically increases is you first learn to walk. Imagine if you learn how to run afterwards. This can lead to a dramatic increase in your performance! On the other hand, you hardly see complete organizations reach the 1:10 ROI. It is often in a local project, program or team. Making a complete organization Agile is another ball game that still only very few have mastered.
Van Lanen: Examples can be found in the preface of the book. Unfortunately, a lot of waste resides in organizations and fortunately, Scrum really helps in surfacing the waste. How people in the organization react towards the waste that has been made transparent, differs a lot. This however, is essential towards the success. If Scrum helps you to make something transparent that you rather not act on, the organization probably will not pull through and Scrum will not work out great for your organization. Your organization may even claim that Scrum sounds great, but did not work out for your company as your organization is unique. But it is not Scrum that changes your organization, that is still your job. Scrum helps however bringing results earlier and often and giving the transparency to learn, inspect and adapt.
InfoQ: You mentioned in the book that effectiveness matters more than efficiency. What if an organization wants to become more efficient, can Scrum help them?
Van Solingen: Definitely! If you focus on effectiveness you get efficiency with it for free.
InfoQ: Is there an approach that you want to recommend for dividing people into Scrum teams?
Van Lanen: We advocate to let teams compose themselves. That gives you, as a manager, the opportunity to show everybody you are serious about the mindset yourself as well. So take a time box, gather everyone around, tell about the boundaries you really value in the result of the team composition and then, let them self-organize, maybe with the support of a workshop facilitator. Only let the facilitator intervene when the people cross the boundaries you gave earlier. Just like Scrum, actually.
Van Solingen: Having said that, you can still orchestrate the team composition yourself. The only question you should answer to yourself still remains: when to really start with self-management by the teams?
InfoQ: Can you elaborate on how you can secure and anchor Scrum in the organizational structure and systems?
Van Lanen: Our strongest advice here would be to intentionally anchor each change with the organization, especially in tight collaboration with staff departments. The classical example is the yearly performance evaluation with the HR department. When you advocate team thinking and helping each other out with cross-functional behavior, a performance appraisal that gives you more salary if you performed more lines of code will impede your mindset to change. So we recommend involving these departments and the manager is essential in helping out here.
Van Solingen: Indeed governance is crucial in making Agile transformations. Such governance changes go gradually as well and can often not be taken overnight. That is why we spend a large portion of our masterclass on such transformations exactly on the topic of governance and change.
InfoQ: Can you elaborate on the importance of coordination between product owners when Scrum is scaled? How can you do this?
Van Solingen: You could scale up the Scrum framework to have a virtual Team of Product Owners with a one person being the “Product Owner of the Product Owners”, which we often call a Chief Product Owner. Most of the time this is the CEO of the company and/or a Chief of Product Marketing.
Van Lanen: We also recommend to descale your organization. A move towards more mini-companies with their own Profit & Loss really helps in removing the waste of the organization. For more advice on Scaling, please refer to the Nexus™ Framework of scrum.org.
InfoQ: Do you have any final advice for managers when their organization adopts agile and wants to deploy Scrum?
Van Lanen: Drink your own champagne. Which basically means you show the behavior that you would like to see in your department. So, for a transition to Scrum, really help teams in removing impediments in the organization. Get trained. Visit Sprint Reviews. Do Scrum in your management team. Know the Agile Manifesto by heart. Act on it.
Van Solingen: And register for our FREE eCourse for managers! There you also find a link to purchase the book.
About the Book Authors
Rini van Solingen (Prof. Dr.) is a part-time full professor in Global Software Engineering at the Delft University of Technology, where he heads the research and education regarding worldwide-distributed software teams. Rini is also CTO at Prowareness (www.scrum.nl), where he helps, together with his colleagues in the Netherlands, Germany, India, and the United States, to quickly deliver working and valuable results for and with customers. He also advises management teams on this subject. He is always happy to give lectures or lead training courses or workshops, so feel free to invite him.
Rob van Lanen is an Entrepreneur and member of the leadership team at Prowareness. Additionally, he is a Professional Scrum Trainer for scrum.org. As a Management Consultant, Rob enthusiastically works towards improving the organization of the Prowareness customers. Nowadays he is more frequently presenting in boardrooms because from there it is possible to realize support for organizational change. He contributes his passion and experience with Prowareness to jointly take the next step in the mission to spread agility across the world.