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Are Scrum & Scaled Agile Damaging Morale At Your Firm?

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In 2008 I was scheduled to give a talk to the Bay Area APLN meetup group. The meeting was being held at the offices of The Gap in downtown San Francisco. The organizers arranged to meet up for a reception in a bar prior to the meeting. As the guest of honor some of the attendees naturally wanted to talk with me. Waiting patiently and quietly for her turn was Janice Linden-Reed. Janice’s story has become a familiar one. She was a project manager at a company where they had adopted Scrum a couple of years earlier along with the Rally tool for work tracking. They’d received training and coaching from Rally but for the last 6 to 9 months Scrum was proving very painful for them and morale was suffering. Meanwhile, the Rally consultants only had one song to sing, “you aren’t doing it right! If only you followed all the practices of Scrum then everything would be fine.” That company was Posit Science, a company pioneering the commercialization of brain plasticity science, and its staff were a combination of PhD neuroscientists and game developers. They were smart, highly motivated people, who believed they were bringing some good to society with their technology and yet Scrum was making them miserable. They simply refused to buy the argument that the problem was with them.

Over this recent holiday period, Grant Ammons lit up social media with his blog post, “Ditching Scrum for Kanban – the best decision we’ve made as a team.”

What makes Grant’s story interesting is that his is just the latest in a long line of similar stories – a thread that can be traced over at least 8 years since I first met Janice Linden-Reed and first heard about Posit Science and their challenges with Scrum.

Since 2009, the Lean Kanban conference in the United States, has been sponsored by Ultimate Software. Ultimate sponsor our conferences as a thank you and in recognition of what Kanban has done to maintain their corporate culture and enable them to thrive since they made a decision to ditch Scrum. In 2008, Steve Reid and Rafael Santos from Ultimate attended Agile 2008 in Toronto looking for a solution to the misery that Scrum was bringing to their workforce. Their story was similar to Janice’s and similar to Grant’s, Scrum had helped them for a while, it had worked for a while, but after a period of 9 to 18 months, it was clear that it was having an irreconcilable negative impact on staff morale. Ultimate prided themselves on their status in the best 100 places to work list. In the most recent survey they are ranked 21st best large employer to work for in the United States. In 2008, their status on this list was in jeopardy and Scrum was a key source of the dissatisfaction that was bubbling in the workforce.

Every story is a little different but there are clear themes. Perhaps half of our clients and half of the attendees at Lean Kanban training around the world are people looking for answers to challenged, painful or failed Scrum implementations. The first thing to realize is that these are real stories and the facts are what they are: people felt the way they did and they acted according to their situation. Wishful thinking or post hoc analysis that they could have done things differently doesn’t change the facts. So what are the common themes in these and so many other stories of challenged Scrum adoption?…

  1. Scrum worked and helped initially

With Posit Science and Pipeline Deals they were startups with smallish engineering teams and they simply needed some initial rigor, some process to follow and Scrum gave them that. With Ultimate, who were already larger, and several hundred engineers, Scrum helped them to focus on short term goals and to deliver more frequently. All of these were good things. So the initial reaction is nearly always positive. While I am only using 3 examples here there are many more such stories where people report, “Scrum helped us initially.” Here is another one by Charles Suscheck. You don’t have to look hard to find more like this on the Web.

  1. Morale starts to drop after 9 to 18 months of using Scrum

All of these stories report that following Scrum started to damage morale after a period of time. There are usually several stated reasons for this: missed commitments / trouble planning and estimating; estimation and planning are taking too long and seem random, error prone, or just plain nonsensical; urgent work arrives more quickly than our sprint cadence and there is pressure to reduce the sprint length but we don’t know how to do that given the current overheads and the existing problems planning and estimating; there is pressure to break the sprint boundaries and add urgent work; product owners show favoritism to one stakeholder over others; product owners have trouble balancing demands from multiple stakeholders; stories are being split over multiple sprints and actual customer service is very poor with long lead times and a lack of predictability and transparency; product owners are suffering anxiety because they are making up numbers to facilitate prioritization and planning activities.

Scrum as a process is engineered to use peer pressure to produce results. This is true at the daily Scrum meeting where individuals make commitments on what they will work on and complete today and have to report the following day on whether they made their daily Scrum commitment, while entire teams makes sprint commitments for the collective work they will complete in a single time period such as two weeks. The problem with this peer pressure, commitment-based approach is that it uses very deterministic mechanisms for estimation and planning, in what is actually a non-deterministic domain. Meanwhile, the social engineering in Scrum also uses peer pressure to drive conformance. It is well understood in sociology that pressure to be part of a group can be strong and can often override individual judgment or logic. So when things aren’t working, individuals are pressured into believing the fault is with them, when in fact the fault is the use of deterministic methods in a domain that has a non-deterministic natural philosophy. When the system is to blame, Scrum teaches its practitioners to blame the people and not the system. This is at the core of the stress and dissatisfaction practitioners feel with Scrum.

I am now seeing similar reports from the field with Scaled Agile Framework which has largely adopted scaled up versions of many Scrum practices. It uses similar deterministic approaches to planning, estimation and prioritization over longer time periods. This practice is known as quarterly release train planning. Some of the same complaints – anxiety that the numbers were guessed in order to follow the process, and that attempts to resolve dependencies in advance are error prone and just guess work, while everyone is being held accountable for their commitments. Once, again, the same problem is being repeated – a deterministic approach is being used to plan 3 month windows of work when the underlying domain is non-deterministic. The practitioners are being set up for failure and made to carry the burden of this failure as their own incompetence.

  1. When things go wrong the consultants always blame the people

In every one of these stories, when the people and organizations complain about the stress that Scrum is bringing to them individually and organizationally, they are universally told that the fault lies with them. Scrum works! Scrum is without flaws! The problem lies with them, if only they were doing it right everything would be wonderful.

As Ken Schwaber has said, “Scrum works! Scrum is designed to work in a context. Your job is to change your context so that Scrum will work for you.” And I truly believe that this is a genuinely correct statement. It, however, disguises the truly difficult bit, “your job is to change your context.” If we look at Grant Ammons story, or Janice Linden-Reed’s story (we use it in our training classes), or the Ultimate story (captured for a future book), or others on our web site such as Nemetschek Scia what we see is a pattern that these were all firms where the business they were in simply made it impossible for them to control their environment and to create a context in which Scrum would work. It wasn’t that they were doing it wrong, rather, in order for Scrum to work, they would have to have changed their business and their business model. Ultimately, canonical Scrum was poor choice for them. If it helped them initially, it should never have been intended as a final solution, instead it should be a first step on a journey of process change and improvement.

Earlier this week, Larry Maccherone shared this story and cumulative flow diagram via his Facebook page. If you read the comment thread you will see that Mike Beedle, one of the founders of Scrum posts his thoughts. Rather than look at the data and analyze it, he quickly jumps to the conclusion that neither Scrum nor Kanban could help these poor souls because they are evidently very poor at technical practices and need to shape up. Compare Mike’s response to mine, as someone seasoned in analyzing cumulative flow data and with a deep understanding of flow efficiency and lead time. This post and the comment thread deeply underscores the differences between Scrum and Kanban communities. With Scrum the practitioners are almost always belittled and blamed, with Kanban we seek to understand the underlying natural philosophy of the domain, understand how the system is operating within it, and seek to find the systemic problems. With Kanban the system is always the number one suspect, not the people working within that system.

Interesting phenomenon that I have seen many times in the past. I have to say though that all but one such example in my…

Posted by Larry Maccherone on Saturday, January 2, 2016

  1. Scrum failure stories often involve leaders in the community and professional certified trainers and coaches

There are many stories of failed Kanban in the market: sometimes the failure comes from inappropriate alignment with culture such as resistance to transparency that comes with adopting Kanban boards; sometimes the failure comes from a failure to install and this would generally be avoidable if the protagonists had taken Kanban System Design training; sometimes a proto-Kanban implementation would have been easier initially than a full Kanban and a trained coach would have been able to help the organization scale the depth of their Kanban to the current level of organizational maturity and leadership tolerance. In general, where we see failed Kanban in the market, the failures come in organizations where they had no training, and did not invest in qualified trainers or consultants with credentials from Lean Kanban University.

However, with Scrum the failure stories are often very different. Often large numbers of the work force have been given certified training from Scrum Alliance certified trainers. Often leading consulting firms are involved and all of their consultants had certifications and professional credentials from the Scrum Alliance or other similar bodies. Despite the available expertise, Scrum remains challenged or fails and the story follows the pattern described in 1 through 3 above.

At Posit Science all their Scrum training and coaching was conducted by Rally, the largest Agile consulting firm in the World. At Ultimate the Scrum training had been conducted by Jeff Sutherland and later by Mike Cohn. Despite having two of the leading 3 Scrum experts in the World, Ultimate were unable to make it work.

The conclusion I’ve come to during the last 15 years of Agile is that Scrum has been widely oversold. There is no doubt that it can and does work but the circumstances under which it can be effective are rarely considered. There has in this respect been a considerable amount of professional misconduct in the overselling and the failure to make any reasonable consideration of context when choosing to implement it. The standard practice of blaming the people in the organizations having Scrum forced upon them inappropriately is a practice that is both morally and ethically bankrupt.

The importance of context and appropriate application of methods

Kanban is not an Agile software development method or process. Kanban was deliberately designed as a mechanism that acts on existing underlying processes. There needs to be an existing context into which we apply Kanban. So fundamentally Kanban eliminates a whole class of potential mis-selling of Agile methods. Kanban is the “start with what you do now” method and evolve from there. Every Kanban implementation will have its own unique workflow and policies. As a consequence, Kanban is adaptable to your context and culture.

However, this is not to say that we haven’t learned a lot about applying Kanban in specific situations. We now have the Kanban Appropriateness Appraisal Framework and the Depth of Kanban Assessment Framework. Both of these coaching tools are part of the standard curriculum for Kanban Coaching Professional training. The appropriateness appraisal looks at both the appropriateness of use of pull systems and the cultural fit for an evolutionary approach to change and incremental improvement. Not every organization has a suitable culture or the appropriate level of organizational maturity or leadership tolerance for Kanban to work. We now know that specific styles of Kanban implementation, implementations at different depths, correlate with different levels of organizational maturity, and as a consequence of this we now train Kanban coaches to be aware of this and to initially apply Kanban practices at an appropriate level of depth. The Appropriateness Appraisal and the Depth of Kanban Assessment Framework go hand-in-hand to insure a much greater level of success with Kanban implementations. It is the use of tools such as these and the knowledge and experience that went into creating them that mean you truly get value when employing a qualified Kanban Coaching Professional (KCP).

And meanwhile, it is never the people who take the blame for challenges with Kanban implementations with the exception of instances where the protagonists quite clearly never received any Kanban training or coaching, and did not make any attempt to actually understand what it is or how it works before they attempted to use it. At some level there is no accounting for stupidity. When people stick a board on the wall and declare they are doing Kanban, if it fails to produce the gains they were hoping for then the fault is quite clearly with them. Meanwhile, our community has an extensive capability for learning, including formal events such as Kanban Leadership Retreats which have led to the development of specific consulting tools such as the Depth of Kanban Assessment Framework and the Kanban Appropriateness Appraisal.

If you are feeling the stress and anxiety or a challenged Scrum or Scaled Agile implementation and you are sick of being told that the fault is with you, then there is an alternative path to agility – consider Kanban in 2016 and see how far it can take you!

Kanban Does Not Share Your Agile Team Agenda

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In November 2013 the Kanban coaching community agreed that we recognized 3 specific agendas that come with Kanban implementations: sustainability; service-orientation; and survivability. The first of these three is shared with Agile software development methodologies. The other two are distinctly unique to Kanban and its focus on improved service delivery and evolutionary change. However, Agile software development methodologies come with a distinct cross-functional team agenda. Kanban does not share this, nor does it need to in order to produce exceptional process improvement results. The Kanban approach is to visualize, improve transparency and understanding, reduce coordination costs through the use of boards. Visualize, Don’t Reorganize!

Agile consultants like to talk about teams a lot. My Kanban book talked about teams a lot too. And that was a mistake. I was using team to mean “a group of people who come together to achieve a common goal.” However, in Agile vernacular a team is actually an organizational unit, albeit, one that has been constructed to have a common goal or purpose, such as delivering working software. Agile Consultants generally set about reorganizing you into “teams” and when the work has variation and variety in it that require multiple specialist skills then these teams are referred to as cross-functional teams – teams containing multiple functions. The goal is to eventually cross-skill people on the team so that they are generalists who can perform all and any function, or T-shape people, who have a broad skillset at a shallow level of competence while maintaining a specialization in a single narrow skill with a deep level of competence.

The Agile bargain is that the pain of the reorganization will pay off in the performance of the new cross-functional teams, that they will achieve high levels of efficiency by eliminating delay in hand-offs between functions and eliminate coordination overhead between different functional groups. If you contain everything you need in a single organizational unit then you don’t have to worry about external dependencies. If these organizational units can be small, say 6 people, then coordination overhead should be minimal to non-existent.

And let’s just say that it works. Let’s not even challenge that theory with any performance data or anecdotal evidence that Agile organizations actually spend a lot of time and coordination overhead resolving dependencies and negotiating for scarce skills and availability of shared resources. Let’s ignore that often there aren’t enough scarce skilled people to go around and that bickering, in-fighting and land-grabbing behavior becomes common during Agile planning. Let’s ignore all of that and assume it works.

What I would like you to consider in this post is this, how expensive in time, money, stress and anxiety is the reorganization into these cross-functional teams? I’d like to posit that a large amount of the pain of Agile transitions and the large amount of the coaching needed for new Agile teams is caused by the stress of reorganizing into cross-functional teams. In other words, one of the reasons Agile is costing so much, is because of the cross-functional team agenda.

servicedeliveryworkflowspansfunctions

Kanban does not share Agile’s cross-functional team agenda. Instead Kanban solves this problem a different way. The diagram explains how. The upper half shows a simplified functional organizational hierarchy divided into 8 functions labeled A through H. Each of these functions is a functional team – a group of specialists in some skill or professional service.

The customer makes a request which involves provision of 7 of these services. The Agile solution to this would be to reorganize into teams with all 7 of these skills represented. Kanban takes a different approach. Kanban is the, “start with what you do now method” and that means you start with the organizational structure you have now. Instead Kanban asks us to model the workflow for the customer service request. We would do this using the STATIK (Systems Thinking Approach to Implementing Kanban) method taught in the 2-day Kanban Systems Design classes from Lean Kanban University. This would give us the Kanban Board displayed in the lower half of the diagram. The Kanban Board is said to be “service-oriented” because it models the required service from the customer’s perspective. The board enables members from all 7 teams to collaborate to deliver the service requests to the customer.

This diagram is simplified for pedagogical purposes. In reality the board design may not have a 1-1 mapping from functional team to column or state in the workflow. Some functions may happen in parallel or in an undefined sequence. We may choose to model activities to be performed using checkboxes on the tickets rather than columns on the board. There is a lot of subtlety and most of these nuances are covered in the training. A qualified Kanban Coaching Professional would be expected to provide guidance on when to model an activity on the board and when to model it on the ticket.

Kanban delivers on the definition of team, I envisaged when writing the Kanban book, “a group of people who come together to achieve a common goal.” The common goal is satisfying the customer request. It is a service-oriented goal. The board and the ticket design provide visualization and insight on the goal. We have plenty of case study evidence to show that this approach works. Many Kanban adopters report increased levels of collaboration at their firms and that this was achieved without painful reorganization, or allocating anyone a new role, responsibility or job title. Kanban improves collaboration through customer focused visualization and creating shared goals for dynamically formed teams of people drawn from different functional groups. With the right board design, it works for shared resources, shared services, functional silos, and of course, it will always work for existing cross-functional teams.

The results from Kanban have been impressive since the beginning. In 2005, the first kanban system spanned across three functional groups and resulted in 230% greater productivity, 90%+ reduction in lead times, and 0% to 98% improvement in predictability and on-time delivery performance. Since then these numbers have been shown to be somewhat mundane. 400% is often reported. 800% has been reported. 50%-90% drops in lead times are common. All of this is achieved without the pain of reorganizing into cross-functional teams; without the pain of Agile transition initiatives; without the cost of Agile transitions and the overhead of Agile coaching.

So even if the cross-functional team does deliver greatly reduced coordination overhead, and even if this does make them “awesome” and “hyper-productive”, and frankly that is a debate that really needs to be had, and if there was any reasonable data, it needs to be studied carefully, but let’s imagine it is all true, given that would it still be a lot faster, easier, cheaper and better to land 200-800% productivity gains, and 50-90% reduction in delivery times from starting with what you do now, and Kanbanizing it? Visualize, don’t reorganize!

Is Agile Costing You Too Much?

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For a decade now, Kanban has offered an alternative path to agility. At the time of writing my first book, Agile Management for Software Engineering in 2002, I believed that an alternative path was required because too many people were resisting adoption of Agile methods. After publication in 2003, I set about pursuing an alternative and Kanban is what emerged from that journey. So Kanban was for people and organizations who found Agile wasn’t a good fit for them, wasn’t suited to their culture or the nature of their business.

At the start of 2016, I’d like to take a closer look at why we need an alternative path to agility and identify the problems that are evident in the market with Agile methods and their adoption. The first in this series asks the question, “Is Agile costing you too much?”

In 2011, we collaborated on a conference in Finland called LESS. During a panel session which I facilitated, one question from the floor was “It seems to me, listening to the sessions at this conference that Kanban obviates the need for the Product Owner role in Scrum. I’d like to ask the panel, what would you do if you’d recently hired 400 product owners?”

Me, “I’m sorry, can I clarify that I heard you correctly, I thought I heard you say ‘400 product owners?'” “Yes, that is correct!”

“How many developers do you have?” “2,400. Our Agile consultants told us we needed one product owner for every six developers. So what should we do with these 400 new people we have hired?”

Last month, my colleague, Alexei Zheglov, was speaking with an Agile coach whose contract hadn’t been renewed. It is never nice to be laid off at Christmas. What had happened? Well, this coach responsible for coaching just six developers wasn’t renewed because there weren’t sufficient tangible benefits to justify the overhead. His contract was costing $150,000 every six months.

On December 24th, I met the CTO of a bank in China. This fairly mature IT organization was running a side-by-side comparison of Kanban against Scrum. The consultants and trainers for both methods were being supplied by the same firm in Shenzhen under a single purchase order. The Scrum coaching was requiring one fulltime Scrum coach for every twelve employees.

Late in 2014, I did some consulting for a large telecommunications equipment manufacturer here in the US. Specifically, I was advising a business unit based in sub-urban Boston. The general manager had brought me in because in his own words, “We’ve been doing Scrum for 6 years but we haven’t seen any improvements for at least the last 2 of those years.” The business unit had a Scrummaster for every 6 developers. I attended several retrospectives, usually facilitated by one Scrummaster and then each of the others in turn had an opportunity to speak up and report the Sprint for their teams. Later in the engagement I was discussing the need for someone to play the role of Service Delivery Manager for a kanban system. The GM asked me who should play that role. He suggested no one in his business unit had the skillset. So I innocently asked, “What do your Scrummasters do?” He replied that “they coach the practices of Scrum.” Since then I’ve come across many companies who describe their Scrummasters as Agile coaches and the ratio of coach to value-adding workers is in the range of 1:6 to 1:12.

The role of Product Owner is interestingly ambiguous in its definition. In some organizations, Product Owners are basically business analysts who write requirements. While in others, Product Owners have a role that is very specific to prioritization and they are the decision makers with respect to the sequencing of the work. Ken Schwaber described the Product Owner role as “the single throat to choke” and he clearly had decision making, responsibility and accountability in mind when he used that term. For many the Product Owner is an interface between multiple competing business stakeholders and the delivery organization (or Agile team.) The Product Owner is a curious addition for Agile. At the founding of the movement, Agile was in part about removing middle-men, eliminating signal attenuation and having direct contact with customers – conversations rather than documentation. It is strange, therefore, that to facilitate such a process we need a new form of middle-man, the Product Owner, to prioritize the order of the conversations. Regardless, of exactly what the Product Owner actually does in your organization, it does seem that often these product owners are new hires to the organization and again the ratio of 1:6 seems to be common. One of our own clients in 2015 made a decision to hire about 20 such Product Owners. While it goes against standard Kanban coaching guidance, the client had their own reasons and justification for the decision.

There is a question whether the product owner is a value-adding role or not? In many organizations it appears that it is not: The product owner is a middle-man with authority over prioritization. While sequencing and scheduling when done well will generate value, the act of sequencing one item over another, does not add value to the items themselves and from a Lean value stream mapping perspective it’s a non-value-adding role. Even more curious then that Agile requires you to create non-value-adding positions.

So in some extreme cases, Agile methods appear to have added 2 new people in non-value-adding positions for every 6 in value-adding positions. Put another way, after the Agile transition, 25% of the workforce is additional “Agile” overhead for operating the Agile method. While this is at the higher end of the range, I believe that it is typical for operating expense budgets for IT / product delivery teams to be increased by around 14% to cover the overhead of non-value-adding Agile facilitation positions.

What about Agile training? There are many 2-day, and in the case of scaled Agile solutions, 3 and 4-day training classes available. Many of these come with short examinations at the end and certifications for passing. However, what appears to be the case is that these training classes do not prepare the workers to behave in an Agile fashion or to deliver the promised benefits of Agile methods. The classes often contain abstract or metaphorical content and are filled with games which while fun to play do not teach specific actionable behavioral change in the workplace. All of this is okay, because the Agile transition purchase order includes coaching as well as training and the coaching is essential because the training did not contain anything actionable. The workforce, however, are now “certified”. Strangely this certification does not mean they know how to behave differently or how to produce better outcomes. It appears to mean that they are now certified to receive coaching.

Let’s imagine for a moment that Agile was producing twice as much value than what preceded it. If this were true would you spend 14% more on operating expense in order to generate that additional value? Rationally, you would say yes. It is an obvious and simple executive decision. The ROI is clear. And therein lies the rub with Agile. How many supposedly Agile organizations can show such benefits? The best and most popular Scaled Agile Framework appears to scale by offering quarterly release planning and using 3 month time boxes. The so called “release train planning” involves getting everyone in a room together in order to resolve dependencies between work and to devise a suitable schedule of six incremental 2-week sprints.

One company I know of in Central Europe, transports up to 500 people by plane, train or private cars, to a location near Frankfurt every quarter in order to conduct the scaled Agile release train planning. What is this costing? If we conservatively budget 800 Euros per person for transport, lodging, and catering, and assuming the company has a meeting facility large enough and isn’t renting a banquet hall from a nearby hotel, then we might have a budget of 320,000 – 400,000 euros per quarter.

Meanwhile, releases are only coming every quarter. How often were releases happening prior to the adoption of Scaled Agile? And how much functionality was getting released? Is there any tangible evidence that Agile is delivering the additional value it claims?

I hear other claims that Scaled Agile is leading to inefficiencies synchronizing teams with some teams having to take down time while others catch up. So the efficiency of Scaled Agile is being called into question by some of its practitioners. I haven’t seen this explicitly with any of our own clients, so it is hearsay, until I have some solid evidence.

Around 10 years ago I worked with a group of Agile coaches from Sabre Holdings, a firm which included properties such as Travelocity and Last Minute. They were under pressure to show an ROI for the Agile coaching team. The Agile coaching department was costing around $2,000,000 per year and the senior leadership wanted, quite reasonably, to know what they were getting for that money. After some period of time, the group was unable to show real tangible ROI and it was closed down. Some of those coaches found employment with other Agile firms such as Rally. After a period of time, Sabre was once again dabbling with Agile and the costs for consultants and staff augmentation were mounting up. A decision was made to create a new in-house team again. This time the justification was merely deferred cost against consultants and temporary staffing. It was no longer necessary to show an  ROI on value created, just enough to show that the internal cost was less than using outside help.

So there have been 15 years of Agile and yet we still don’t have very many case studies showing tangible business benefits and real ROI. Meanwhile, Agile consulting firms thrive on supplying the large numbers of coaches required to “go Agile.” Perhaps, it is time to ask, “Is there an alternative approach to agility that costs a lot less?”

Back to the CTO of the Chinese bank that I met on 24th December. He told me that in 5 months, he’d managed to scale Kanban to 2000 people across 5 locations in China. That the adoption had institutionalized and he’d been able to make a tour of the various locations and inspect many of the Kanban implementations for himself. He told me that Kanban was producing greater productivity and efficiency than Scrum. He, however, didn’t elaborate much, and isn’t ready to share his data. He wants more evidence before he is prepared to go public. What he was willing to share is that the Kanban implementation had been achieved with a total of 200 days of training and consulting. This is a ratio of 1 day for every 10 employees. Meanwhile, Scrum coaching is costing 180 days for every 12 employees, in the same half year time period. He also confirmed that Scrum is failing to institutionalize and is requiring constant coaching.

To put this in perspective, in terms of per employee adoption cost, Kanban is costing this bank 1/150th of the cost of Scrum, and producing better results. How might this huge cost saving be possible? Well, for starters Kanban doesn’t require you to add people to your organization as coaches or product owners, instead it provides existing workers with a means to frame and make better quality decisions. Kanban is empowering and enabling. Workers become more effective at doing their existing jobs in the existing process and workflow – no need for coaching in a new role as part of a new process. It’s simply more effective to stick with what you do now and get better at it, than it is to make grand changes.

We are inviting executives from this Chinese bank to speak at our Spring conferences in London and San Diego. We hope to have both cost and value/productivity data to report by that time.

A week earlier I was in India where I saw a case study presented by a young consultant who was acting for a large Agile consulting firm, advising a large Indian outsource firm, to a large financial institution based in New York. Because of the nature of the contracts between these firms, the actual details are covered by a non-disclosure agreement, so we can’t name names, or any specifics. The client had adopted Scrum largely enterprise-wide and had adjusted all their processes to facilitate a 2-week Sprint cadence. Despite this highly Agile sounding arrangement, actual customer lead times for changes to credit card processing systems were taking 130 days on average. With some courage, the consultant took it open herself to push through a single kanban system implementation. With no other changes, within 6 weeks, lead times had shrunk to just 12.5 days and the client was so happy they are pushing the consulting firm to implement more Kanban. This particular consulting firm is well known to be anti-Kanban and their sales people around the world actively dissuade clients from adopting it. So it took a courageous act from a single professional keeping the client’s best interests at heart to create a huge improvement in value delivery.

That same week in India I saw another presentation where the kanban system had produced a 30% increase in revenue by enabling the firm to process more service requests faster. This is real ROI. Now would you spend 14% on OpEx to get 30% more revenue? Probably not! Revenue isn’t margin or profit. If you only got 30% more revenue but Agile was costing you 14% more OpEx you’d be losing money. The thing is, how many Agile implementations could claim 30% more revenue? Meanwhile, this Kanban implementation cost a handful of coaching days over 6 months. This story was a strange déjà vu with a case study presented at Lean Kanban Benelux by Tina Dudenhoeffer, a consultant, and Marianne Lanting of Winkle. Again, they had increased revenue by 30% in only 5 months by servicing requests for market research surveys faster and more predictably using Kanban. The cost of this implementation was less than 20 consulting days from Tina plus training from Maarten Hoppen of our partner VX Company. Marianne is a manager at Winkle and there was no additional cost for her.

In general these results while extreme sounding isn’t surprising. We already know from surveys and reports post Kanban training that our training is more effective than typical Agile training. Lean Kanban training is specifically experiential and uses games, simulations and exercises that simulate or model the actual working environment. Students leave our classes with specifically actionable ideas and designs for changes many of which can be implemented immediately at no or very low cost. They don’t need any or much coaching. They come out of the class understanding what to do and why they want to do it.

For 5 years now, we’ve been selling Kanban coaching engagements that typically look like 2-4 days per month for organizations up to a product unit (or 150 people) in size. Kanban coaching is typically centered around coaching managers on metrics, reporting, and holding the various Kanban Cadences meetings such as Service Delivery Review, Risk Review or Operations Review. We have often found ourselves bidding against Agile consulting firms recommending coaches are on-site for 4 or 5 days per week and often at the ratios we’ve discussed here 1:6 -> 1:12 people. Bizarrely clients have often opted for the latter, usually for 2 reasons. We don’t quote hourly rates for our consultants, only daily rates, and if you do try to calculate an hourly rate, it will be higher than that for a typical Agile coach. We aren’t ashamed of this. We believe our coaching is far more effective because it focuses on high leverage activities that deliver more value, rather than on Agile practice adoption and behavior. Meanwhile, the quantity of consulting days and the number of consultants is dramatically less. Often clients are skeptical of this. Everyone else is advising them they need a lot of Agile coaches and a lot of coaching. They believe it is too risky to go with our model when we appear to be bucking the trend. It seems easier to follow the herd. It is common for us to be quoting less than 1/10th the cost of rival Agile consulting firms, typically, $30,000 – $50,000 against $300,000 – $500,000 and then to be told we didn’t win the business because, and to quote a VP from a travel technology firm, “You are too expensive!” This analysis was based on an hourly rate and not on a total contract cost. Sigh!

So, while we have a bank in China that is rolling out Kanban at large scale at less than one hundredth of the cost of Scrum, we have been and continue to be confident that Kanban, as your alternative path to agility, can be rolled out at only one tenth the cost of competing Agile and Scaled Agile methods. We are prepared to put our money and reputation where our mouth is on this, because we are more than confident with years of experience and real data that we can make it work. So, this month we are launching “The Kanban Challenge” – give us 10% of your Agile budget and we’ll promise to outperform the other 90% producing more and better results over a 6 to 18 month time period. Some conditions apply to this offer so do approach our sales team directly for full details if you are interested.

After 15 years of Agile, it is time that developing true business agility stopped costing you as much as 14% of your OpEx budget. So discover “the alternative path to agility” and take The Kanban Challenge in 2016. Let us show you how much is possible at just a fraction of the cost and impact of Agile methods. Watch out for the launch of The Kanban Challenge later this month. Until then please feel free to contact our sales team with any questions.

Kanban – The Alternative Path to Agility

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The Kanban Method was conceived as an alternative path to agility – as a means to improve responsiveness and adaptability without any significant revolution or reorganization in your way or working or political structure of your business. Lean Kanban University has recently introduced a series of training classes developed and evolved from older, tried and tested curriculum to ease adoption of Kanban and communicate the full scope and scale of what is possible when you fully embrace Kanban as a way to manage your modern professional services business.

This table shows The Kanban Method and the alternative path to agility is a single graphic. From left to right you progress from basic introductory shallow kanban boards to full enterprise scale, Enterprise Services Planning.

kanbaninatable

In September our new training facility, the Anderson School of Management opens in Seattle conveniently located near Seattle Center at 200 First Avenue West. We will be offering the full suite of Kanban and Enterprise Services Planning classes every month. Browse our schedule via our training listings. Email our sales team for summer offers and promotions if you register before August 10th, 2015.

Team Kanban Practitioner

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Lean Kanban University is introducing a new entry level Kanban class for Team Kanban together with a certification and professional credential, TKP, Team Kanban Practitioner. This new class becomes the entry level on the “alternative path to agility” and reflects the market reality that most Kanban starts shallow and at the team level.

Team Kanban Practitioner (TKP) classes are just 1 day and can be taken at our new training facility in Seattle, The Anderson School of Management, located at 200 First Avenue West, Seattle WA 98119 close to Seattle Center, Key Arena and the Space Needle. Check our listings for available classes Training

Team Kanban Practitioner class participants will receive a certificate and the professional credential TKP. This is the first step on the “alternative path to agility.” Completing two 2-day classes on Kanban Systems Design and the Kanban Method implemented through the Kanban Candences, earns participants the higher level Kanban Management Professional, KMP, credential.

The Kanban Coaching Professional and Accredited Kanban Trainer credentials are unaffected by this announcement.

Class Agenda

1st session (90 minutes)

Introduction and survey of existing Kanban experience

3 Agendas (focus on Sustainability)

Principles & Practices

Meanings of kanban

Basic kanban concepts

     – visual board

     – local cycle time metric

     – WIP

     – delivery rate & Little’s Law

Discussion of Cartoon

Feedback loops – standup & replenishment

Morning Break

2nd session (90 minutes)

Game – getKanban in Quickplay mode or Klaus Leopolds’ boats game depending on trainer preference

Game debrief

Lunch Break

3rd session (90 minutes)

Board designs (including personal kanban)

WIP limits

Risks (e.g. Tactical|operational|strategic|sustaining, cost of delay Expedite|Fixed Date|Standard|Intangible)

Design-a-board exercise

Afternoon Break

4th session (90 minutes)

What next…

Explanation of service delivery workflow kanban

Revisit 3 Agendas – next focus on Service-orientation

Proto-kanban versus full kanban system

Benefits of extending kanban up/down workflow – improved service delivery – overview of STATIK and outside-in customer focus – upsell to 2-day class

Closing exercise – reflect on what have you learned and what next, what will you do differently next tomorrow?

Who should attend?

Any team member in a professional services organization where the team or its members suffer from over-burdening and would benefit from better visibility into their work and relief from over-burdening through the use of work-in-progress limits. Anyone who has seen others benefiting from the use of Kanban Boards and would like to learn how to do it for their team.

Learning Outcomes

Attendees will learn about various styles of team kanban board and how to choose the correct style for their current way of working. They will learn how to behave and collaborate when practicing Kanban at the team level. They will be able to go back to their office and implement a Team Kanban Board (some form of proto-kanban) and get started. They will also have a fuller appreciation of service delivery workflow kanban pull systems and why advancing to the next stage of Kanban Management Professional is an important and valuable step on their journey along the “alternative path to agility.”

Kanban Cadences

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Recently, I’ve taken a new approach to teaching The Kanban Method. The new Lean Kanban “Practicing the Kanban Method” class is built around the 7 Kanban Cadences – the cyclical meetings that drive evolutionary change and “fit for purpose” service delivery. Two of these meetings are relatively new additions to the method: Risk Review added in 2014 as a response to Klaus Leopold formalizing Blocker Clustering in 2013; and Strategy Review as an emergent response to the concept of “fit for purpose” and the need to sense the external environment, in order to be able to respond appropriately. The other 5 were existing elements of the method, though the first edition of my Kanban book ommitted Service Delivery Review. In truth our training has not until now emphasized these meetings and particularly replenishment/commitment and delivery planning have not been explicitly taught. Little wonder then that these very basic functions of Kanban have not been well implemented in the field.

kanbancadences

When implementing the 7 cadences we don’t expect people to add seven new meetings to their organizational overhead. Instead we expect to find existing meetings that change be adapted and tuned up. Also at smaller scale we expect the meetings to be combined. We’ve also got one client who combined SDR with Replenishment/Commitment because the audience was the same. However, the SDR is on a bi-weekly cadence while Replenishment is weekly. To facilitate the combination they simply increase the meeting time by 30 minutes every other week. Delivery Planning is covered in the Kanban book but is for the first time being emphasized separately in training. Showing that Replenishment and Delivery Planning are separate meetings emphasizes the deferred delivery commitment taught in the class and really helps to underscore differences with methods such as Scrum where the two are combined and coupled together. By decoupling commitment to service a request from commitment to a specific delivery date, you can increase customer satisfaction by better managing their expectations and making promises you know you can keep. It’s been an important element of Kanban since 2006 and finally we are making it more  explicit in our training.

There are 10 feedback loops on this diagram showing information flow and change request flows between the different meetings. Information flow is intended to facilitate decision making for example, output from a replenishment meeting would appear as information at a standup meeting. Change requests imply that something is not working well enough, that there is perception that some current policy is leading to an outcome that isn’t “fit for purpose,” for example, both SDR and Ops Review will provide capability information to a Strategy Review together with a requets for a change of strategy due to a lack of operational capability to deliver on current strategy.