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Spotify is well known for creating the streaming music service that disrupted the music streaming industry. But how that platform was built and continues to be enhanced is just as famous in many business circles. The "Spotify Model" - is the scaling system where constant improvement, innovation, and frequent releases aren’t the exception, they are the rule.
In this quick video, Henrik Neiburg, a Spotify Agile Coach, explains this renowned model and how some of the key patterns informed Dr. Jeff Sutherland and were codified in the development of his Scrum@Scale framework.
Learn the shared history of Spotify and Scrum@Scale
Right now you are probably wondering “What does this have to do with Scrum or the right Agile mindest?”
A lot, actually. Because perspective matters.
I have worked with a number of companies in many different cultures and one thing always stands out to me - the reaction to the word “No”.
Boomers and GenXers like me have been in the corporate world now for 20+ years. We were taught that in order to succeed you need to follow orders, ask permission, always get clearance before you act. And that red tape is annoying, but inevitable, and must be endured.
We have become numb to the word “No” in that we just accept it, we don’t challenge it.
Millennials have had a different upbringing. And a very different and more agile perspective.
When I go into an organization to lead an Agile Transformation, the Millennials have a couple of things going for them:
They want to learn.
They’re willing to challenge impediments.
And, perhaps most importantly, they have a different reaction to the word “No”.
If they have a problem, they don’t wait for someone else to solve it or send an email about it, they “Google it” or “YouTube it” and solve it without the concern of someone telling them they aren’t “allowed” to do something.
This is not a grand generalization. It’s a pattern I see again and again in all kinds of clients. It’s why the new intern-packed Scrum Teams can, and often do, outperform other new teams loaded with experience. I have had teams of interns or those straight out of college that kicked butt.
Very few things trump experience unless that experience tells you to put your head down and just take orders. To get the most out of Scrum and Agile you must be willing to challenge the status quo. Be willing to push back against no. You need a bias for action, not a reliance on instructions.
In short, it really does help to think like a Millenial.
BLOG NOTE: Dave Slaten is a Principal Consultant at Scrum Inc. Tom Bullock is our Chief Storyteller. Every now and then they talk shop in an effort to share the latest learnings and ideas from the field.
“Tom, this is Dave. I’m trying an experiment, my friend."
That is how the recording began. Dave Slaten is spending much of his time working with a client in London. So he decided to start an audio diary to document some of the learnings he captured on site. The first entry came with this key question:
“What’s the difference between an impediment and an interrupt?”
Think about that for a second. The answer may seem obvious to those of us well versed in Scrum. But is it?
Perhaps more importantly, how would you describe it to those new to Scrum in a way they could quickly grasp?
Scrum has its own vocabulary. The list is not long, but it exists. This vocabulary, if used correctly, can increase both communication speed and efficiency. But Scrum specific words can also hinder communication between Scrum Teams and non-Scrum teams and become a barrier for those just learning the framework. Or as Dave put it, “We have a lot of vocabulary misses with this team.”
That’s where his audio diary picks up.
Dave has been launching teams for our client in London. “I have three operations teams that are up and running,” he explains, “and we’re trying to get a fourth team to figure out how and if Scrum will work for them.”
That team works in customer service for a global financial services firm. “They are the folks that get called on the telephone or sent an email whenever something isn't right for the client.” They are dedicated to maintaining a good relationship with each of the more than 1,000 clients in their individual portfolios. “I tried to get them started with a Daily Scrum. Let’s just see what it feels like to connect as a group for 10 or 15 minutes each day, sync up and find places that maybe we can help each other.”
Upfront, Dave noted the highly reactive nature of this team. So at their first Daily Scrum, he asked the Team Members for their your impediments. “What I'm after,” he explained, “is anything preventing you from accomplishing what you need to accomplish today? And let's make that visible so that other people on the team can help out or we can get it raised through the escalation channels.”
But the team wasn’t making any impediments visible.
So Dave “went on a mission to try and craft a better question for this team in the Daily Scrum.”
Dave hypothesized that the problem centered around the perceived meaning of three words; Interrupt, Impediment, and Escalate.
Words that many Scrum practitioners easily understand, but new Team Members may not. As Dave sees it, “An interrupt is something that we couldn't plan for and it's genuinely not associated with the Sprint Goal.” Things like the production line are down or an emergency has occurred and we’re the only ones that can deal with it.
Whereas an Impediment is “something blocking me from going down the path that I need to go down in order to achieve my Sprint Goal.” Escalation is used when an impediment can’t be fixed by the team and so it needs to be made visible to those who can fix it.
But all of these words meant something different to the Scrum Team Members Dave was coaching. “They saw their Sprint Goal as clearing all the issues raised by their clients.” Something you want a customer service team to think for sure. But this view changed their understanding of the words impediment and interrupt.
If, for example, the phone rang with an important new request from someone other than a client. The Team saw this as “preventing me from removing the problems of the client that I was working on. Therefore that phone call is an impediment rather than an interrupt.”
As for the idea of escalation, Dave says “they saw this as something they did all day long. Raising questions or other issues up this flagpole and that. It was part of their regular process.” Fair use of the word, but not one which fits with the general focus of escalation in Scrum.
Learning this, Dave changed the focus of the Daily Scrum questions to this: “Aside from your daily work list, Is there anything that you might need to escalate soon?”
“Well, the good news,” Dave states, “is we got the Daily Scrum down to 15 minutes and we added the caveat when we ask the question that the answer 'no' is perfectly acceptable.”
But that’s not the only gain from his experiment.
Context matters in just about everything. Scrum was designed to be an adaptable framework. Coaches and Trainers have to be as adaptable. As Dave puts it, “We have to be careful of working the correct vocabulary and phrasing into space where it achieves our objective without making them relearn words that are already ingrained in their culture. Where they have other meanings.”
When you find a gap in understanding, don’t be afraid to change up the vocabulary. To refactor questions. To even use the terms and names already in use. Labels don’t matter in Scrum, outcomes do. Don’t get hung up on a word.
The reason for this is that more communication doesn’t scale while just enough communication is essential to high performance of a team and particular teams of teams. More meetings and more reports cause higher decision latency, the primary cause of project failure. If average time to make a decision is greater than 5 hours, the success rate is 18%. If decision times averages less than one hour, project success rates rise to 58% (50,000 project sets of 8-25 projects each in the Standish Group database). A properly implemented Scrum radically reduces the need for communication while assuring the right communication happens.
The roots of Scrum lie in fighter pilot training and that training was based on the work of John Boyd, the world’s greatest fighter pilot. His strategic thinking is taught in all the war colleges and is the core strategy of the U.S. Marines. Professor Ikojiru Nonanka, the grandfather of Scrum (coining the term in the HBR paper “The New New Product Development Game” which was read and adopted by the first Scrum team) is currently writing a book on the Marines and says “John Boyd’s OODA loop is more important that Toyota’s PDCA cycle!”
Fundamental to systems theory is the concept of “policy resistance” which says that anytime you try to implement a policy, procedure, strategy, or operation, side effects immediately arise to thwart the change (see Sterman 2000 Business Dynamics. McGraw Hill). This is dramatically obvious in aerial combat and John Boyd developed a strategy to allow him to win 100% of his aerial encounters usually within 40 seconds. He says first you have to Observe (situational awareness), then Orient (reinterpret your thinking about what is going on), then Decide (to do something different), then Act (in a way that disarms your opponent by striking is a different and unexpected place. Before the opponent can realign their opposing forces you execute the OODA loop again (get inside the opponents OODA loop) and this will confuse and disorient the opposition making you certain to win.
This works in business as well as in the air combat and in Scrum, the Product Owner is the most important person to be constantly executing the OODA loop to win in the market and disarm both external and internal opposition to success.
These core concepts are illustrated in Boyd’s standard briefing called Patterns of Conflict. He starts by addressing how successful military operations are based on Schwerpunkt, the German work for Mission Intent.
“German operational philosophy is based upon common outlook and freedom of action … and emphasized implicit over explicit communication.
“The secret … lies in what’s unstated or not communicated to one another—in order to exploit lower-level initiative yet realize higher-level intent, thereby diminish friction and reduce time, hence gain both quickness and security.
“This allowed the Germans to repeatedly operate inside their adversaries OODA loops.” (Boyd 1986, Patterns of Conflict, slide 79)
This approach is called Auftragstaktik (mission command), or more accurately Führen mit Auftrag ("leading by mission"):
A contract between superior and subordinate (Daniel Ford 2011. A Vision So Noble. Amazon)
The subordinate agrees to make his actions serve his superior’s intent in terms of what is to be accomplished, while the superior agrees to give his subordinates wide freedom to exercise his imagination and intuition in terms of how intent is to be realized.
“I always prized most highly those commanders that needed to be given the least orders, those you could discuss the matter with for 5 minutes and then not worrying about them for the next 8 days.” Hermann Balck crossing the river Meusse in 1940
In Scrum we have leveled the playing field as the Product Owner is not the superior. However, the Product Owner is responsible for clearly articulating the how and the mission intent and if the team can quickly understand and execute with minimal discussion and delay they will move into a hyper-productive state. In the initial phase, extensive discussion is required to form a team (a group working toward a common goal) and a backlog that is clear and executable with shared goals. Until this happens, teams cannot perform, but once it happens, this can move very fast. The right communication is essential and it will be tedious until the organization is aligned but with alignment the right communication is minimal. Without minimal communication you cannot achieve high performance and the scalability required to turn inside your competitors OODA loop.
Scrum is structured to allow small self-organizing teams to work together in small groups of teams, the Scrum of Scrums. This implements information hiding, an object-oriented technology concept, the allows communication through a higher level interface that eliminates over 90% of communication pathways for a large group of people.
Exploding communication pathways caused production per individual to slow down on large teams. This is the root of Brooks Law in “The Mythical Man Month”. “Adding more people to a late project makes it later.” A properly implemented Scrum@Scale is scale-free in the sense that communication requirements do not explode as you as more teams. This allows linear scalability in the sense that doubling the number of teams can double production, a feature that is not possible in traditional project management.
So less communication is a feature of self-organizing, self-managing teams and allows more rapid decision making that avoids decision latency, the primary cause of project failure.
While the communication of mission intent is critical, less communication in execution is better. Elon Musk refuses to go to meetings with more than five people and Jeff Bezos refuses meetings in any group that cannot be fed with two pizzas. Systematic, a large CMMI Level 5 consultantcy has eliminated all meetings except the Scrum five events and has abolished all other meetings and reports, particularly for senior management. A properly implemented Scrum will always reduce meeting time and reduce communication overhead.
Born from a conversation between myself and my counterpart at KDDI Keisuke Wada, this partnership has been two years in the making, but the history is a bit more interesting. IT started in 2011, when Dr. Jeff Sutherland traveled to Japan at the invitation of Kenji Hiranabe (ESM’s CEO) and Yasunobu Kawaguchi to deliver a keynote, teach a class, and meet Professor Ikujiro Nonaka. Professor Nonaka is one of the co-authors of, The New New Product Development Game, an HBR article that helped to spark some of the ideas behind Scrum and gave it its name. A few years later, Kenji would sponsor our President of Scrum in Hardware, Joe Justice, to deliver a keynote at Agile Japan and the Automotive Frontier Conference.
In the hope that we might build something bigger together, Kenji introduced us to Akihito Fujii of KDDI, who, coming from Google Japan, had introduced Scrum into KDDI. His goal was for Scrum to enable them to increase innovation and productivity. In February of 2017, I made my first visit to Japan with Dr. Sutherland and taught our first round of classes sponsored by KDDI and Kenji. We’ve been back every quarter since then. And now with our partnership Scrum Inc Japan, we’re back for good.
The press conference began with a presentation, from the new CEO of Scrum Inc. Japan., Minoru Aramoto, Akihito Fujii, Kenji Hiranabe, and myself. We covered everything from the history of Scrum, its Japanese roots, and how it can help companies increase their revenue by putting the customer first. There was a really good presentation by Hiroshi Mushigami of Toyota’s Research Institute – Advanced Division (TRI-AD), which is now one of our finest Japanese case studies.
Reporters asked us: “By what KPI’s will you judge your success? What is your expected revenue?” Minoru answered that we don’t have a revenue target, instead, his goal was to engage with twice the number of companies as in our previous years combined. That would make the goal forty. I felt the need to speak up here about the mission, so I added: “As a board member, my KPI is going to be how many lives we change, how many places of work end up for the better.”
That evening we hosted a small event to celebrate the formation of the partnership and to launch the first in a series of events for gathering with our former Scrum students and anyone interested in Scrum. We called it “Scrum Ba at Night”. At first, when I suggested this title of Scrum Ba, the Japanese weren’t so sure. They really wanted to accentuate the American ingredient of the JV as they thought it would make it more popular and speak better to young Japanese engineers. I countered with the idea that the Ba is a central idea of Scrum – and it comes from a different work by Nonaka. In his article, “The Concept of ‘Ba’: Building a Foundation for Knowledge Creation”, he explains that a Ba is a shared space for emerging relationships as a platform for knowledge creation. This resonated with the team as it was really the objective for getting together.
We started with a panel of speakers, including Minoru, Kenji, and Joe Justice. This was followed by a great presentation by Katsuya Suda, the Scrum of Scrum Master for au Denke, KDDI’s electricity usage app. It is one of our best examples of a Scrum@Scale implementation, with all the teams, Product Owners, and even some stakeholders collocated in one room! The panel ended by taking questions from the audience. My favorite question, answered by Joe, was about how major corporations undertake Scrum transformations. He shared that what they needed to do was to model themselves after some mega companies, like Bosch. Start at the Board level, changing top incentives, and view Scrum as a way to restructure the company. This is what a Ba is all about – the sharing of knowledge and creating great relationships.
At the end of the night, we invited questions and comments from the audience. Chloë O’Neil, a Scrum Inc. coach took the mic and vowed, in honor of International Women’s Day, to help use Scrum to make a better working existence for women in Japan. I definitely want to see that happening!
I had been ruminating about the question about KPI since the morning, I wanted to remind this group that it’s not all about us, but Japan as a whole. So when it was my turn, I spoke about what I thought the mission of Scrum Inc. Japan should be: We should help Japan end its decades of deflation and return to the 2nd largest economy in the world. I joked that if they wanted to be number one, well, that would be a different discussion.
Scrum Inc. announced it is partnering with KDDI Corporation and ESM, Inc. to form Scrum Inc. Japan. This unique partnership will help boost innovation, productivity and optimize agile project development in the world’s third-largest economy.
The joint venture will offer Scrum Licensing Seminars to train corporations on how to apply and practice Scrum, Scrum Coaching to deliver context-specific solutions, and Consulting that will provide holistic direction for digital transformation.
In recent years, Scrum has been in high demand among Japanese companies, which use it as a path for digital transformation to incorporate state-of-the-art technologies like 5G, IoT and AI into their business operations.
“Scrum Inc. helps companies worldwide to radically change their business practices to be relevant in a rapidly changing world. Scrum Inc. Japan is the first time we have established a new entity to focus exclusively on one country.” Said CEO JJ Sutherland.
The dominance of online retailers like Amazon, Jet and, Zappos, has disrupted tradition brick and mortar retail companies far and wide. Payless, Gymboree and Victoria's Secret are just some of the well-known companies closing stores in 2019. This trend is accelerating.
So how do retail companies survive? How can they possibly out Amazon, Amazon?
Scrum Inc.’s Joe Justice believes they have to turn to Agile Retail, and Scrum, to digitize their offerings, turnaround their fortunes or work to widen a competitive advantage. Recently Joe noticed a number of retail executives, or their consultants, attending Scrum classes. One of them reached out to Joe for some additional advice:
I recently received an email from a graduate of Scrum Inc.'s Certified Scrum Master Class. In fact, this person took the course twice in one month. Their client, a top retail giant that continues to grow in physical stores and online sales, is improving flow across a flagship physical store.
This person wrote of their client:
They have 300 employees in the store. They need a turnaround. Have a very motivated store manager… Each Area Manager has 5 Assistant Managers, with 50-60 people reporting to them.
I am going to ask the Area Managers to apply the 3-5-3 with each of their Assistant Managers, to zero in on Kaizen Blitz Teams (of 4 to 5 people) to do the Backlog Refinement, Sprint Review, Sprint Planning, Retrospective, and Daily Scrum.
Good, this means they're moving towards Agile retail with Scrum as the strategy - all 3-5-3 of it, from the store manager to the 300 store employees. They execute a coordinated backlog of kaizen (continuous improvement).
Then the graduate added:
Is there anything in a fast moving retail environment that I should pay attention to in rolling out Scrum in their daily operations?
Some of you may find value in my reply.
2) I am looking forward to these folks enjoying success- higher customer flow, employee and customer satisfaction, and profit.
3) From what I think I’ve learned; to win, out-Amazon Amazon. Focus on your teams getting the flow of information to make decisions with all available evidence in less than an hour. So the teams can make meaningful pivots in flow- product placement, freight docking strategy, forklift operator and janitorial operator training, marketing (end cap, banner, circular, website) decisions in less than an hour. Which means flow data and efficacy data of those operations current state is already “on the wall” (or app) where everyone in the chain of decision sees it in at least once an hour.
Amazon does that once a second. But start with once an hour- that will expose the bottlenecks on information gathering, posting, decision making, and execution. And that will expose the organization’s willingness to kaizen, actually continuously improve across the entire relevant value stream.”
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Over the years, I have heard from many teams the need for a tool that helps accelerate the learning and the application of Scrum. Scrum Essential Cards, capture the key ideas behind Scrum, providing a quick and easy handy reference guide.
I worked with Ivar Jacobson International to leverage the Essence Industry standard to capture the essential elements. These essential elements are then presented as a set of cards: Scrum Essential Cards. Each card includes just a few sentences of the most important information from the Scrum Guide. This helps to keep the conversation on track and ensure important principles are not forgotten.
I use the cards in many of my Scrum training courses today and they prove to be very popular, with both students and training partners. The cards add exercises and interactive games to enhance the learning experience.
Teams often represent their actual work items with the cards or sticky notes. These are placed on their team boards to visualize, prioritize, track and make decisions about the work. Using the cards as a means of representing key parts of Scrum gives the team the facility to work better together as a team.
If you want to accelerate your Scrum adoption and understanding, you can get your own Essential Scrum Cards here and bring the Scrum Guide to life. You can also read more about the kinds of games you can play, or come and experience them yourself at one of my training courses.
As an interesting aside, Trifork bought the Ericsson 4 racing boat that won the Volvo Ocean Race in 2008-2009, retrofitted it with some new technology, renamed it the L4 and won the Ocean Race in 2018. Their innovative CEO, Joern Larsen has always been about speed and now with a growing global company has some fun as well.
Of particular interest were two well-attended meetups where I presented a Scrum@Scale overview on how this non-prescriptive framework targets business agility, using Scrum across an entire organization to increase company valuation and stock price. We have been using this model at Open View Venture Partners since 2006 to double venture capital returns compared to competitive approaches. The first meeting was at the NETS Agile Meetup and the second GOTO Copenhagen. Both were held near the Copenhagen airport. Download slides below.